House of Commons Hansard #149 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was money.

Topics

Fisheries and OceansOral Questions

3:05 p.m.

Liberal

Seamus O'Regan Liberal St. John's South—Mount Pearl, NL

Mr. Speaker, marine incidents can happen anywhere in the world and there is no one approach that works best in all cases. Today, the east coast of Canada has some of the busiest shipping routes in the country. Marine shipping has always been a part of Atlantic Canada's identity, which explains our region's strong history of, and commitment to, marine transportation safety.

Would the minister please inform Canadians of some of the measures he is taking in my province of Newfoundland and Labrador and in the Maritimes?

Fisheries and OceansOral Questions

3:05 p.m.

Beauséjour New Brunswick

Liberal

Dominic LeBlanc LiberalMinister of Fisheries

Mr. Speaker, as my colleague knows, the Canadian Coast Guard is the backbone for one of the safest marine systems in the world. As I indicated earlier, the Prime Minister announced a historic investment to improve marine safety on all of Canada's coasts. This will have a major impact in the great province of Newfoundland and Labrador. We will reopen the St. John's maritime rescue sub-centre which was closed by the previous government. This will boost emergency response capacity. We will refurbish the St. Anthony lifeboat station, and what is more, we are opening two new lifeboat stations in Newfoundland and Labrador.

Fisheries and OceansOral Questions

3:05 p.m.

Conservative

Joël Godin Conservative Portneuf—Jacques-Cartier, QC

Mr. Speaker, the arrival of the Asian carp poses a serious threat. Following the Great Lakes and catches in Toronto, it is now in the St. Lawrence River in Quebec.

The federal government needs to take action to eliminate this species that is endangering our fish species for the sport fishery and the very popular ice fishery, which are major economic activities for our regions.

Will the Minister of Fisheries, Oceans and the Canadian Coast Guard take action on this issue and quickly deploy an effective response plan?

Fisheries and OceansOral Questions

3:05 p.m.

Beauséjour New Brunswick

Liberal

Dominic LeBlanc LiberalMinister of Fisheries

Mr. Speaker, it appears that my colleagues missed what I have said in recent days.

I can tell my hon. colleague that the answer is yes. We are taking these threats seriously. That is why we are working with our partners, the Canadian provinces and the United States, to invest not only in the science needed to counter these threats, but also in the infrastructure to ensure that these invasive species are not in Canadian waters. We will continue to improve our efforts in this area throughout Canada.

Canada Revenue AgencyOral Questions

March 7th, 2017 / 3:05 p.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Mr. Speaker, more than five years since the Isle of Man fraud was discovered, the government has still not laid criminal charges against KPMG. Instead, they were awarded contracts totalling 92 million of our dollars.

In a similar case, in the United States, KPMG was threatened with being declared a criminal organization, it was fined half a million dollars, its tax department was closed and nine executives were criminally prosecuted, with two of them sent to prison.

Will this government stop awarding contracts to KPMG and will it prosecute this company, which shows the rich how to cheat on their taxes?

Canada Revenue AgencyOral Questions

3:05 p.m.

Gaspésie—Les-Îles-de-la-Madeleine Québec

Liberal

Diane Lebouthillier LiberalMinister of National Revenue

Mr. Speaker, I will repeat the information for my colleague in the back who does not seem to understand the words I am speaking.

It is thanks to the efforts of the Canada Revenue Agency that KPMG's schemes were discovered abroad. The case is currently underway. Although we cannot provide any information, I can assure the House that we are continuing the work we said we would do during the last campaign. We will continue to do what we promised to Canadians.

Canada Revenue AgencyOral Questions

3:05 p.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Speaker, I do not buy it.

Canada is so buddy-buddy with tax havens that it speaks on their behalf at the IMF. Canada is a spokescountry for tax havens. No kidding. Canada speaks on behalf of Barbados, the Bahamas, and a dozen other tax havens.

Is the government trying to pull the wool over our eyes with its claims about fighting tax fraud when we all know it is a spokescountry for tax havens?

Canada Revenue AgencyOral Questions

3:05 p.m.

Gaspésie—Les-Îles-de-la-Madeleine Québec

Liberal

Diane Lebouthillier LiberalMinister of National Revenue

Mr. Speaker, last year, in our first budget, we made a historic $444 million investment. Let me make this perfectly clear: I can assure the House that tax frauds can no longer hide. We are taking this matter very seriously, and those who choose to participate in such schemes will pay the price. Canadians expect nothing less from us.

Canada Revenue AgencyOral Questions

3:10 p.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Speaker, I seek unanimous consent to table the IMF documents. All of these documents show that Canada speaks on behalf of tax havens.

Canada Revenue AgencyOral Questions

3:10 p.m.

Some hon. members

No.

Presence in GalleryOral Questions

3:10 p.m.

Liberal

The Speaker Liberal Geoff Regan

I would like to draw to the attention of hon. members the presence in the gallery of the Hon. Bill Fraser, Minister of Transportation and Infrastructure and Minister responsible for the Northern and Miramichi Funds for the Province of New Brunswick.

Presence in GalleryOral Questions

3:10 p.m.

Some hon. members

Hear, hear!

The House resumed from February 23 consideration of the motion.

Opposition Motion—Impact of Carbon TaxesBusiness of SupplyGovernment Orders

3:10 p.m.

Liberal

The Speaker Liberal Geoff Regan

It being 3:10 p.m., pursuant to order made Thursday, February 23, the House will now proceed to the taking of the deferred recorded division on the motion of Mr. Poilièvre relating to the business of supply.

(The House divided on the motion, which was negatived on the following division:)

Vote #206

Business of SupplyGovernment Orders

3:20 p.m.

Liberal

The Speaker Liberal Geoff Regan

I declare the motion defeated.

I wish to inform the House that because of the deferred recorded divisions, government orders will be extended by eight and a half minutes.

The House resumed consideration of the motion.

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:20 p.m.

Liberal

The Speaker Liberal Geoff Regan

There are five minutes remaining for questions and comments following the speech by the hon. member for Longueuil—Saint-Hubert.

The hon. Parliamentary Secretary to the Leader of the Government in the House of Commons.

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:20 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I would like to give a bit of an overview as we get restarted on this debate.

The Liberal Party has taken the issue of tax fairness as one of those foundational pillars in terms of being an issue that we believe is good for Canada's middle class. When we think of tax fairness, we can talk about the middle-class tax break in the last budget. We can talk about the tax increase on Canada's wealthiest. We can talk about some of the other benefits, like the Canada child benefit, which lifts literally thousands of children out of poverty, or the seniors GIS 10% increase, which will, again, lift tens of thousands of seniors out of poverty.

We have seen a holisitic approach in dealing with the issue of tax fairness. That is something the government has heard loud and clear from Canadians, and we are acting on it.

One aspect of the budget was to allocate $444 million towards fighting tax evasion. I wonder if the member could provide some comment on whether he believes that this specific measure will be able to reap the rewards in terms of getting those who are trying to avoid paying taxes to pay their fair share, something we, as the government, want to see happen.

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:25 p.m.

NDP

Pierre Nantel NDP Longueuil—Saint-Hubert, QC

Mr. Speaker, I thank my colleague for his question as well as the overview he gave. I often find him to be a little long-winded but this time, it was very appropriate to reset the scene.

Investing $444 million to form a squad to go after those tax shelters and people who profit from them, who are clearly abusing the system, is great. Investing the money needed is great, but that said, we need to see some results. For instance, during question period today, it did not exactly reassure us to hear the Minister of Finance reply with the same old broken record.

The truth is, we would like to see the government show some international leadership on coordination efforts, or regarding companies that take advantage of tax shelters by hiding their profits in places that are clearly in on it. We want to see a government that wants to resolve the problem and take the lead on this. For months I have been asking the Minister of Canadian Heritage whether she got the message to the Minister of Finance and whether the government is finally going to collect GST and provincial taxes on international services that are provided over the Internet. We have not received an answer. That is the least the government could do. Canadians want to see companies pay their fair share.

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:25 p.m.

NDP

Gord Johns NDP Courtenay—Alberni, BC

Mr. Speaker, I want to thank the hon. member for his great speech breaking down the impact of tax havens and legal tax loopholes here in our country, which have cost Canadians, as he stated, more than $200 billion over the last couple of decades. When we put that together, that is as much as the whole national infrastructure deficit in our whole country. That means that every street and every pipe could be fixed right now had we closed those loopholes created by consecutive Liberal and Conservative governments.

We can break that down and look at tax havens alone. These are legal tax havens. I am not talking about those who are breaking the law. I appreciate the government taking action to go after tax cheats, but I am talking about legal loopholes that need to be closed, which are costing us at least $7 billion a year. When we break that down by 338 ridings across Canada, that is more than $200 million a year per riding.

What would the member do with $200 million in his riding? What does the member think we could do with $7 billion across Canada if we just did the right thing and ended these tax agreements?

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:25 p.m.

NDP

Pierre Nantel NDP Longueuil—Saint-Hubert, QC

Mr. Speaker, I thank my colleague for the question. I also appreciate his knowledge on this topic. He provided some clarifications to my response to the member opposite.

It is quite clear that over the years a tax evasion policy, a tax haven policy, has taken hold. Companies, especially multinationals, have been able to choose where to deposit their profits. It is wrong. It makes no sense. Any normal person can see that this is not right. This would be a non-issue if we lived in a society where everyone's needs were met, but when we have a hard time bathing our seniors, this money could evidently be put to good use.

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:25 p.m.

Liberal

Julie Dzerowicz Liberal Davenport, ON

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.

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:35 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Madam Speaker, the member talked about a couple of points. First, she may want to correct the record about the government investing this amount of money in CRA this year. It is over a five-year period. It is important for Canadians to understand the investment the Liberals are making into the CRA after the Conservatives cut 3,000 positions.

The member said this is a top issue for the folks she represents in Davenport, and then went on to say, over and over again, how much confidence she had in the CRA and its ability to hound and get after these tax cheats. However, we know about the case of KPMG, the scam that she talked about. It was running for more than a decade, by the way, before the great CRA even found out about it. Once it did find out about it, that all of these wealthiest of Canadians were avoiding paying their fair share, the CRA then offered, in secret, a deal to those Canadians to not pay any penalties whatsoever.

Here is the lesson or the message that the Canada Revenue Agency is sending out to wealthy Canadians: if they do cheat, if they use these scams like KPMG set up, CRA will probably never find it, but if it does find it, it will take a decade, so they are good. Even if CRA does find it, all they will have to do is pay some, maybe, of the taxes that are owed but there will not be a penalty.

The Liberals are somehow suggesting that, in paying back what is owed to the Canadian people, the government had the audacity to ask these wealthy, well-heeled Canadians to, oh my gosh, pay the interest on the money that they owed rather than the penalties. What about all those middle-class Canadians Liberals constantly talk about yet do not defend?

Is my friend from Davenport happy with the deal that the CRA, in which she has so much confidence, offered in a sweetheart package to wealthy Canadians who cheated the system and who then had to pay no penalties whatsoever?

Opposition Motion—Tax FairnessBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

Julie Dzerowicz Liberal Davenport, ON

Madam Speaker, there were a number of questions to our Minister of National Revenue in the House over the last couple weeks around this issue.

She was abundantly clear, and I am actually going to quote her response. She said:

Let me be clear: tax evaders can no longer hide. We take this issue very seriously, and those who choose to participate in tax schemes will face consequences for their actions. Canadians expect no less.

It was the CRA that discovered the tax avoidance scheme that was set up by KPMG. It is now a case that is before the courts. We have already made a very strong statement through our Minister of National Revenue to say that tax evaders can no longer hide. We are going to be very aggressive. We have put a significant amount of money into our budget to tackle this.

I know that our minister and this government will not stop until every single tax evader is caught.