Mr. Speaker, I am very pleased to revisit a question I asked the Minister of National Revenue on June 7.
The question was about the scheme devised by KPMG to help rich Canadian taxpayers avoid paying their fair share of taxes in Canada. That day we also learned that the accounting firm was recommending its tax avoidance scheme not only to avoid taxes, but also to avoid paying divorce settlements and alimony. This scheme allowed them to hide their assets and investment income. Thus, in the event of divorce, the client could use the scheme to be exempted from Canada's Divorce Act and from certain requirements that are settled as part of a divorce.
The June 7 question was about this major scheme that was reported by the CBC, but that was also studied by the Standing Committee on Finance. It was at this committee that we learned of these specific details, thanks to our requests for documents about the scheme.
My question for the parliamentary secretary, who will answer shortly, is specifically about these unscrupulous tax experts. In its testimony, KPMG declared that it would no longer use this scheme because its image is too important and it felt that this scheme, which was implemented in the 1990s and early 2000s, was no longer appropriate today, in 2016. KPMG told us that.
There are unscrupulous tax experts and accounting firms that have no problem proposing these kinds of schemes to their clients, for $100,000. That is what happened in the Isle of Man situation that I am talking about today. The firm placed its clients' money, sometimes millions of dollars, in an account on the Isle of Man. Without wanting to give anyone any ideas, their scheme involved giving a gift to a foreign company that miraculously or coincidentally was located on the Isle of Man. When it is a gift, there is no income tax attached to it. There is nothing attached. In the end, we learned that the money had been placed under the responsibility of a foreigner on the Isle of Man, who was in fact associated with the KPMG accounting firm. All the income generated by those investments was given back to those rich taxpayers in the form of gifts.
In other words, a gift given to a foreign entity comes back to the person who gave it. It is the concept of a gift that must be called into question. When you expect to get something back in return for a gift, that is no longer a gift. The foreign firm gave the taxpayer a gift, but the taxpayer did not have to pay taxes on it because gifts are tax-free. That was KPMG's strategy.
My question is straightforward, and I hope to get a straightforward answer. What does the government plan to do to combat unscrupulous tax experts and accounting firms like KPMG where tax experts do everything in their power to help rich taxpayers avoid paying their fair share of taxes? What will happen to KPMG? What will happen to the tax experts who developed this scheme and who took part in it?