Mr. Speaker, I welcome this opportunity to clarify the actions being taken by our Conservative government on multiple fronts to combat international tax evasion and aggressive tax avoidance. It is a track record of which we are very proud.
I would also like to debunk the unfounded assumptions and misconceptions on which Motion No. 485 is based. This is a very complex issue.
I would like to explain exactly why I am against the motion.
This problem is universal. It is certainly not confined to our borders.
The globalization of trade, the free international movement of people and funds and the rapid growth of online business have made international tax evasion and aggressive tax avoidance a priority for tax administrations worldwide.
We are not sitting on our hands, and we are not letting tax cheats get away with it. From complex corporate schemes to individuals using sketchy foreign administrations, tax havens or tax shelter strategies to avoid or evade taxes, we will do what needs to be done to protect the integrity and fairness of Canada's tax system.
Anyone looking at the facts can conclude that our government has been very steadfast in its efforts to identify those who attempt to hide their money offshore, people who think it is okay to cheat their neighbours and have them pay their way.
This is fundamentally unfair to the vast majority of honest, hard-working Canadians, who pay their fair share of taxes. They understand that this is how government pays for the important programs all Canadians depend on for our children, for our seniors, and for our health care.
It is illegal not to declare income from Canadian and foreign sources. Failing to declare can result in taxes, penalties and hefty interest charges. Tax evasion can also be punished by fines and prison sentences.
Our government takes tax evasion and deliberate tax avoidance very seriously. Over the past few years, we have instituted significant measures to protect the integrity of the Canadian tax system to ensure that cheats get the message.
For evidence, we need look no further than Canada's economic action plan 2013, which introduced new tools and legislative measures that are strengthening CRA's ability to combat international tax evasion and aggressive tax avoidance.
Economic action plan 2013 also established requirements for banks and other financial intermediaries to report electronic transfers.
Commencing in January 2015, they must report international electronic fund transfers of $10,000 or more to the CRA, as they currently must do to the Financial Transactions and Reports Analysis Centre of Canada.
Another measure our government introduced was extending the normal reassessment period with respect to foreign income and property.
We can go back an additional three years for taxpayers who have failed to report income from a specified foreign property on their annual income tax return and failed to properly file their foreign income tax verification statement, form T1135.
That is not all. The CRA is revising form T1135 to require taxpayers to report more detailed information. They now have to indicate the name of the foreign institutions and countries that are holding their assets and the income they earned on those assets.
Another measure that is just as essential to our work is that we are streamlining the legal process whereby the CRA obtains information concerning unnamed persons from third parties, such as banks.
Economic action plan 2013 set aside $30 million in additional funding to equip the CRA with the tools it needs to put these new measures to work. Half of this amount, $15 million, is earmarked to develop and implement the electronic systems the CRA will require to receive reports from banks and other financial intermediaries on international fund transfers. The remaining $15 million is being allocated over the next five years to establish dedicated audit and compliance resources to address offshore non-compliance.
These resources are intended to enhance the CRA's existing internationally focused programs, such as those for international audit, aggressive international tax planning, and offshore tax evasion.
Thanks to these resources, the CRA was able to establish the Offshore Compliance Division. This will guarantee a targeted approach when action plan 2013 measures are implemented to combat international tax evasion and aggressive tax avoidance.
The division will require strategic information to detect, select and coordinate high-risk offshore non-compliance cases for auditing. Audits are among the main methods the CRA uses to detect and deter non-compliance.
The division will also implement a framework.
It is actually putting in place a robust accountability framework to report on the progress in identifying and addressing offshore non-compliance.
Although the division is still relatively new, I can assure the House that the CRA continues to make significant inroads in its measures against taxpayers who try to hide their money offshore.
Since 2006, the CRA has audited over 7,700 cases of offshore aggressive tax planning, worth some $4.6 billion in unpaid taxes.
The CRA has also completed compliance actions on roughly 340 audits of high-net-worth groups using sophisticated business structures and offshore arrangements to avoid taxes. This resulted in the identification of more than $195 million in unpaid federal taxes.
What is especially encouraging is that this tough approach has made converts of many people who previously failed to declare their income. Canadians are now taking it upon themselves to come forward, reporting previously undeclared income and paying up what they owe. In fact, the number of voluntary disclosures has increased more than threefold in the past number of years.
Those are the facts, and the facts speak for themselves. Clearly, our efforts are paying off, and we anticipate even better results in the years to come once the Offshore Compliance Division is fully operational.
Just as clearly, we do not need this opposition motion. I urge all the parties in the House to reject it and focus on more urgent matters. I am against the motion.