Mr. Speaker, I will be sharing my time with the member for Joliette.
It is a pleasure for me to rise today to speak to the House on behalf of my riding of Davenport on this opposition day motion on tax avoidance. Tax avoidance was one of the top issues that Davenport residents had written to me about a year ago. It was an issue that actually caused quite a bit of consternation in my riding after the stories of the Panama papers came out.
For those who might not remember the Panama papers, it was a huge leak of documents that basically lifted the lid on how many rich and powerful people in the world have used tax havens to hide their wealth and avoid paying taxes.
Davenport residents wrote to me and said they were okay with paying their taxes, but they were upset to hear that there are corporations and rich individuals hiding their wealth and not paying their fair share. I could go into a little more of what they said later, but I will continue by talking about what our government has been doing in tackling this issue, and we have been very aggressive.
The government knows that offshore tax evasion and aggressive tax avoidance come at a great cost to society and that all Canadians pay the price. Tax evasion deprives the government of money that could be spent on programs and services for Canadians. Public investments in everything from health and education to research and development are shortchanged every time someone breaks Canada's tax laws. That is why we are taking decisive action to crack down on offshore tax avoidance and tax evasion.
Last year alone, the Government of Canada invested $444 million in budget 2016 to empower the Canada Revenue Agency to aggressively pursue those who think they are above the law. I can assure my hon. colleagues in the House that the agency is putting this money to good use. It is focusing resources in areas of the highest risk. It is identifying tax cheats, and it is penalizing those caught contravening the law.
In Canada, CRA auditors conduct more than 120,000 audits every year. Last year alone, that resulted in a fiscal impact assessed at more than $12 billion in taxes, penalties, and interest. Close to $8 billion of that amount, about two-thirds, involves large multinational businesses and high-net-worth individuals, including those with offshore transactions.
With the new infusion of funds—the almost half a billion dollars I was talking about—the CRA has increased the number of auditors reviewing offshore tax schemes and the promoters of those schemes. For the 2015-2016 fiscal year, the CRA completed more than 13,000 audits related to aggressive tax planning. That led to an extra $2 billion in the public purse.
As another statistic to add, I know that the CRA will continue to increase the application of penalties to all cases of serious tax cheating. To date, the agency has levied over $218 million in third party penalties against promoters and tax preparers who advise their clients to participate in tax shelter donation schemes.
To be clear, many people move money back and forth between countries for entirely legitimate reasons. These are not the people whom the CRA is targeting. The CRA is targeting individuals and companies that promote nefarious tax schemes, or capitalize on them to avoid paying taxes.
I want to be equally clear that anyone engaging in these activities can face serious consequences if they are caught. Tax evasion can lead to criminal prosecution, fines, and jail time. It is the CRA's criminal investigations program that investigates suspected cases of tax evasion, fraud, and other serious violations of tax laws. If it finds grounds for action, it recommends cases to the Public Prosecution Service of Canada for criminal prosecution.
During the five-year period between April 1, 2011, and March 31, 2016, 42 Canadian taxpayers were convicted for tax evasion, with links to money and assets held offshore. In total, the $34 million in evaded taxes resulted in court fines of $12 million and 734 months of jail time.
Over the same period, total domestic- and offshore-related criminal convictions resulted in 508 convictions, involving approximately $120 million in evaded federal taxes. That led to $40 million in court fines and 2,930 months of jail time for tax cheaters. The CRA is currently conducting audits on more than 820 taxpayer offshore files, and criminally investigating more than 20 cases of tax evasion.
I have just mentioned a whole slew of numbers. However, I want to reiterate something that our Prime Minister said in the House of Commons today during question period, which is that, with respect to tax evasion, this government works on a very strong principle, and that principle is that we hold people to account when they are involved in tax evasion, when they are not paying their fair share of taxes, whether they are individuals or corporations.
With respect to recent media reports in relation to the KPMG offshore structures, the CRA continues to take action on a number of fronts, including actively pursuing the matter to its fullest extent in the courts. Going further, by analyzing additional information, the agency has uncovered a number of additional tax schemes set up in the Isle of Man, which many people may not know is an island right in the middle of the Irish Sea. The CRA is analyzing these additional structures to identify any similarities with the KPMG scheme, and will take all necessary compliance actions where appropriate.
However, these are not the only issues on which this government is focused. Whether they are complex corporate structures using offshore jurisdictions of concern or profit-shifting schemes to evade or avoid taxes, the CRA is committed to addressing any and all cases of non-compliance. For example, the CRA has more than 76 taxpayer audits under way related to the Panama papers. It has executed search warrants, and several criminal investigations are ongoing, involving both participants and facilitators. In short, the trap is closing, and those prepared to play fast and loose with the rules will be held to account.
The CRA also intends to review 100,000 files in 2017 involving electronic transfers of funds between Canada and four jurisdictions of concern. The agency is building the business intelligence and the data-mining capability to eventually review all electronic fund transfers in real time. Canadians can be assured that 100% of the transactions that do not make sense or are considered high risk will be reviewed, and appropriate compliance action will take place.
Aggressive, comprehensive audits are only part of the agency's strategy to go after tax evaders. The CRA is also enhancing its efforts on a number of fronts, including expanded systems for information sharing, legal expertise, and targeted compliance activities aimed at high-risk and high-wealth taxpayers.
Globally, the Government of Canada works with its international partners through the OECD forum on tax administration. Member countries promote international tax standards, reduce tax barriers, create better opportunities for Canadian businesses, and increase transparency around global issues. They also coordinate strategies to ensure individuals and multinationals are not hiding money and assets offshore.
The government continues to sign tax treaties with other jurisdictions. This provides further information that enables Canada, and our partners, to crack down on tax cheats worldwide.
In addition, the offshore compliance advisory committee, reporting to the Minister of National Revenue, provided its first report to the CRA in December 2016. The report included recommendations for tightening up the voluntary disclosure program. The CRA is carefully reviewing the program to ensure it continues to promote the right taxpayer behaviour.
Collectively, these measures are expected to have a fiscal impact of an additional $2.6 billion for the crown over the next five years.
We are committed to all of this, and we will build on all of these achievements. Last month, the government tabled its response to the report by the House of Commons finance committee entitled “The Canada Revenue Agency, Tax Avoidance and Tax Evasion: Recommended Actions”. That report made it clear that the Government of Canada supports the committee's recommendations and will continue to evolve its approach on offshore non-compliance to generate even better results.
It was a pleasure for me to speak on behalf of the residents of Davenport on this very important issue. I now welcome questions from my colleagues.
