Finance Committee on Nov. 19th, 2025

[Silas Xuereb]

It is a problem when we have large corporations and wealthy individuals who are able to use these very complex tax planning structures to minimize their taxes. Of course, the government is still going to pay its bills one way or another. It's just increasing the proportion of taxes coming from middle-class and lower-income earners who aren't able to use those same structures. It's definitely shifting the burden—

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

If I may, would it also increase the debt load?

[Silas Xuereb]

Yes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Okay.

I'll give the last 20 seconds or 40 seconds or so to Mr. Caldera. Do you want to address the question?

[Sasha Caldera]

I fully agree with Silas.

What we're seeing is an accumulation of assets by the top 1% and 0.5% of folks who are categorized by net worth in Canada and globally. That means those individuals have greater purchasing power. They are able to purchase assets from the government and pass those costs down to the middle class and the working class, and then costs go up. That's why we're seeing so much commentary about the cost of living, food costs, veterinary costs and all of the other things that are—

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Caldera. We're going to have to end it there.

Thank you, Mr. Kelly.

We're going to move now to Mr. Leitão for six minutes, please.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you very much.

Gentlemen, thank you for coming to our committee to talk about this very important issue.

Mr. Caldera, I'll start with you. You mentioned the beneficial ownership process and the fact that some of the bigger provinces have already implemented that. You talked about the necessity to come up with a pan-Canadian agreement.

Could you perhaps elaborate a bit on that? We have the three large provinces—B.C., Quebec and I think Ontario—already on board. How do you envision the federal government leading the process to make sure that we have a pan-Canadian system in place?

[Sasha Caldera]

Yes, after many years of work, three of the biggest provinces have come on board. Ontario just announced that it is committing to a beneficial ownership registry system that is going to be aligned with the federal government system. There's a planned implementation date of 2027.

In terms of a pan-Canadian agreement, in practice all it really boils down to is provincial and federal finance ministers agreeing to implement beneficial ownership registries in their own provinces. The design of these registry systems is aligned with the federal government's system, which is otherwise known as the individuals with significant control register. The information is then shared between the provincial registry systems and the federal system so that there's a single lookup function.

A similar agreement was already struck in 2017 with then federal finance minister Bill Morneau. He met with his provincial and territorial counterparts and required federal and provincial companies to document or hold beneficial ownership information internally, and this pan-Canadian collective agreement would be the logical next step.

This is what can pave the way not only for greater transparency but also for deterrence in money laundering and deterrence in tax evasion. It would end up making requirements under the automatic exchange of information a lot easier, and it's in line with public country-by-country reporting initiatives.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

You mentioned the 2017 agreement. I was there, in another parliament at the time.

In 2019, in fact, the Quebec legislature did pass a beneficial ownership law. It wasn't easy. There was a lot of push-back, but it was done. I understand why other provinces might feel a little reluctant to go that way, but I think that for this system to work we absolutely need to have all the provinces on board. Yes, I would certainly pass that on to the current finance minister that in the next federal-provincial finance ministers' agreement I think that issue should be on the agenda.

I think my time is going by, but you made some references to organized crime and to the fact that Canada is perceived by some international organizations as an easy target. In budget 2025, we do have provisions to fight financial crimes. Have you had a chance to take a look at that section of the budget? If so, what do you think of it?

[Sasha Caldera]

Yes. Thank you for the work you did on beneficial ownership during your time in Quebec. Quebec actually has one of the stronger beneficial ownership registries in the country.

As far as budget 2025 is concerned, there are some really positive developments in fighting financial crime, such as the financial crimes agency. I think it's a very good start. One modification is that it should go beyond just combatting fraud and should include broader corruption threats as part of its mandate. That's an area for improvement.

Some of the funding for the Canada Border Services Agency and the RCMP is very welcome and is badly needed right now, because enforcement is one of the weak links when it comes to money laundering and disrupting organized crime across the country.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

I just have a quick question, if we have time.

It's a little bit out of left field: What do you think about cryptocurrency?

I view that as the ideal way of laundering money. What do you think of it?

[The Chair, Liberal, Karina Gould]

Could we have a 10-second response, please?

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Is crypto bad?

[Sasha Caldera]

Crypto is bad, but conventional financial flows are where you still want to focus your attention.

[The Chair, Liberal, Karina Gould]

Great. Thank you very much.

Mr. Garon, you have the floor for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

I would like to ask you a question, Mr. Xuereb. Earlier this week, a researcher told us that in Canada, there was a certain lack of transparency regarding access to data, whereas several countries, such as France, Australia and the United States, have access to tax payments and more granular tax data. It seems that Canada is somewhat behind the times when it comes to data transparency.

Do you think this hinders researchers’ ability to assess the extent of tax evasion and avoidance in Canada?

[Silas Xuereb]

Definitely, I think the lack of data makes it a lot harder to estimate exactly the scale of tax avoidance.

As Jason mentioned in the panel beforehand, the Australian example of public country-by-country reporting legislation is really exemplary. The data has not started coming out yet, but it's going to come out in the next few months. That will be a treasure trove for figuring out what exactly the scale of the problem is here, which particular companies are doing it and which countries are the links between that are the most important and that we need to be looking at.

Some data has already come out from Luxembourg from public country-by-country reports. Quebec's research institute, IRIS, has done some great work documenting all the Canadian companies that were found in their data, showing profit shifting that companies like.... Off the top of my head, Cenovus Energy is one company in that data that they found had shifted a lot of profits to Luxembourg subsidiaries. They were able to document over $100 billion, I think, of profit shifting to Luxembourg just from that one country's public country-by-country report.

If we had all the public country-by-country reports coming from Canada, we would have a lot more data to see exactly which companies are shifting their profits and what loopholes they're using, so we could put a stop to it.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you.

Madam Chair, with all due respect and deference to the witnesses, I would like to put forward for debate the motion I gave notice of on Monday, November 17. It reads as follows:

That, given that, according to the Parliamentary Budget Officer’s report, the projected deficit has more than doubled since the 2024 Fall Economic Statement, that the new spending measures transform what would have been a surplus operating balance into a deficit, that he considers that the overly broad definition of capital investments used by the government creates a major discrepancy with his estimates, that the lack of an objective definition of these investments directly influences budgetary decisions, and that the Parliamentary Budget Officer’s stress tests indicate that it is unlikely that the government will meet its budgetary anchor of reducing the deficit-to-GDP ratio, the committee invite the Parliamentary Budget Officer as soon as possible, for a period of two hours, to examine the current budgetary situation, the methodology surrounding capital investments, and the government’s ability to meet its financial commitments; and that the testimony of the Parliamentary Budget Officer must necessarily take place before the study of the budget implementation bill begins.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

Do any members of the committee wish to discuss this?

You have the floor, Mr. Garon.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I would like to explain.

The budget has been tabled and passed. We must now study the budget implementation bill.

We must avoid overly partisan discussions about the budget. We are meeting here in committee, and we will have to study the bill clause by clause, so we need to start off on the right foot. Welcoming an independent officer of Parliament is the best way to get off on the right foot. The Interim Parliamentary Budget Officer is a credible officer of Parliament who was appointed by the government; he does not report to the government, but to Parliament. We have all worked with Parliamentary Budget Officers for several years, so we know how remarkably competent and independent they are. They are at our service; we are their clients.

When the Parliamentary Budget Officer raises criticisms and questions, or voices budgetary concerns, there are two possible reactions. The first is the Trump-style reaction, which is to disrespect the institution. It is a bit like attacking judges, commissioners or independent officers of Parliament. This must be avoided.

If we do not want to behave like some of our neighbours to the south, who show gross disrespect for institutions, we can adopt the second response and invite the Parliamentary Budget Officer, because we will have questions about methodology for him.

We are not opposed to innovation and redefining categories. We have had discussions with Mr. Turnbull and the Conservatives on this subject. We are innovating in the presentation of budget data, but it is important to understand the ins and outs of this innovation, especially since, as I understand it, the definition used by the government is not consistent with what is done in either the United Kingdom or Singapore. In any case, it is stated in the budget that it does not comply with generally accepted accounting principles. This means that if a private company decided to use the government’s definition in its financial statements, no accountant with the title of chartered professional accountant would agree to sign those financial statements without risking serious professional misconduct and possible disbarment from their professional order. We sense this unease among professionals and government officials, and we also sensed it during some in camera meetings. We would therefore like to have explanations so that we can then study the budget on solid grounds. I therefore believe that this is the first step that must be taken and it should precede any work by the committee on the implementation of the budget.

That is the essence of this non-partisan motion, especially since the text is essentially a summary of the Parliamentary Budget Officer’s independent report.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

Mr. Turnbull, go ahead.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks to my colleague for his remarks.

Last time the interim PBO—he hasn't taken up the permanent appointment, and so he's the interim PBO—was here, the members of this committee didn't allow him to answer the questions that I had.

I did not personally attack him. I asked him good faith questions on some of his comments that he made.

What I have trouble accepting is that Jean-Denis is putting forward this motion. If members on this side of the table are not allowed to get good faith responses from witnesses, then it seems like there's a skewed sense of transparency. You're looking for transparency. You're looking for debate. You're looking for a critical lens. You want to hear from the interim PBO, but it seems as though....

Monsieur Garon, I don't know whether you were in the seat when the interim PBO was here last. I can't remember whether it was you or not. I don't think it was. One of your colleagues was here, but they certainly, both the Conservatives and the Bloc members who were here, made sure that I didn't get an answer to my questions from the interim PBO. I'll play the tape back for you if you need it, but it was very clear that they didn't want the interim PBO to answer my good faith questions.

I have a really hard time, given the fact that the interim PBO has just been here, that you want to call him again. It seems to me that there's an imbalance and an unfairness, I would say, in how that interim PBO would be treated and allowed to answer questions from members on this side.

I also would say that the interim PBO has made quite a few contradictory statements and remarks like the latest one. He actually said that our budget was sustainable. I have a quote here from him. He says, “Budget 2025 would be deemed sustainable over the long term”, which was in his most recent report. Prior to the budget, he had made some broad statements about the budget in public that were inconsistent with his assessment now. Now, that's not me undermining him. In a sense, his own statements sort of contradict themselves, and it's for this reason that I think we need to have a very balanced approach. I think we should have the ability to have another parliamentary budget officer attend as well.

When Mr. Jacques was here, he said that he very much admired the former PBO, Kevin Page. What we know is that there are differences of opinion even among budget watchdogs, right? They have a difference of perspectives. I think, if we're going to have a lively debate about capital budgeting framework, which I appreciate you may have a difference of opinion on, we should have a fulsome debate on that topic if we want to have a fulsome debate. Perhaps we should consider having someone like Kevin Page come as well, who has said, for example—

[Andrew Lawton]

Then propose an amendment.

[Ryan Turnbull, Liberal, Whitby, ON]

I will. I'm getting to that. Thank you very much, Mr. Lawton. You don't have the floor, but when you do, I'm sure you can urge us to do all kinds of things.

Kevin Page has said, “ the separation of operating and capital spending is a reporting change, not an accounting change, and it increases transparency on capital investment”, which is exactly what the government had proposed to do. This is exactly why we made the announcement prior to the budget and exactly why we've been clear about what that capital budgeting framework includes and what definitions of capital investment are included. I think, to me, this would more than balance out the conversation.

Chair, I feel bad for the witnesses here. We should maybe let them go because we're devolving into a debate on a motion. It's clear that the Bloc members don't really care about the current study on tax havens but, if that is their choice, I understand. Perhaps we should let the witnesses go so that we can continue this debate.

[Jasraj Singh Hallan, Conservative, Calgary East, AB]

Are you saying we don't have to and we can just go to a vote?