Evidence of meeting #16 for Public Accounts in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A video is available from Parliament.
February 26th, 2014 / 4:20 p.m.
Conservative
Ted Falk Conservative Provencher, MB
Thank you, Mr. Chairman.
For years I've tried to figure out how CRA thinks and I'm not sure if I'm more confused today or clarified, but I see with your speaking notes I have to start at the back and go forward. I'm a little bit confused still.
My question is around the 2013 economic action plan, which contained measures for financial institutions to provide new information on international wire transfers of $10,000 or more. If I heard correctly, you're not analyzing that data yet?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
The legislation only comes into effect January 1, 2015. Right now we're in the process of building the system so that when January 1, 2015 comes along and financial institutions start sending us the information, we will have the systems in place to be able to analyze the information and act on it. As it stands now the legislation doesn't come into effect until 2015.
Conservative
Ted Falk Conservative Provencher, MB
I think financial institutions have been complying with FINTRAC for probably two or three years already in that regard.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Yes.
Conservative
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
I would say that at this point we already receive some information from FINTRAC. There's a whole bunch of rules that are in place to analyze certain transactions. So when FINTRAC suspects money laundering and tax evasion, they have the capacity now to provide us with some information. I would say for the most part we already get referrals from FINTRAC on the most egregious cases. What this new legislation will allow us to do is cast the net wider to look at all transactions and not just the most egregious cases.
Conservative
Ted Falk Conservative Provencher, MB
Thank you for that.
Your informant program, is that legislation also only being enacted in 2015?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
The informant legislation is not legislation; it's a program. The Minister of National Revenue launched the program in January of this year and since that time, as Ms. Jelmini mentioned a few minutes earlier, we have already started receiving phone calls from various informants.
Conservative
Ted Falk Conservative Provencher, MB
I see from your report that the fees people can expect from being an informant range between 5% and 15%. Is that based on how well they negotiate or is there a schedule?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
The 5% to 15% is based on the quality of the information we receive and a number of other factors. We're also relying on best practices of other countries because there are a few other countries out there that also have paid informants programs. We based our program on the best practices of the other countries.
Conservative
Ted Falk Conservative Provencher, MB
In the Liechtenstein cases were the taxpayers primarily individuals or corporations?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
There was a mixture of both. There were individuals. There were trusts. There was a mixture of entities.
Conservative
Ted Falk Conservative Provencher, MB
The auditor's report also states that the current audit guide for offshore banking is from 2001. Are the audit guidelines being updated with today's banking situation? Maybe they have been already.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Thank you for the question, Mr. Chair.
We have done a number of things. Ms. Jelmini talked about the wiki page, but we also sent instructions in January of this year to the people who are going to be working on the offshore front, talking about a number of measures: the time it takes to do an audit, the information you are supposed to look at, basically a road map of what they should do. That went out in January of this year.
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Yes.
Conservative
Ted Falk Conservative Provencher, MB
Great.
The audit also notes that you assess penalties on a case-by-case basis. Has that been effective?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Penalties are always a very good deterrent, and the reason we say it's always on a case-by-case basis is that no two situations are identical. So we've always had a practice at the agency that we do not levy penalties unless we look at the facts of the situation.
Conservative
Ted Falk Conservative Provencher, MB
On that 5% to 15% for informants, it says on taxes. Is that on taxes, interest, and penalties or just taxes?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
It's on taxes assessed and collected.
