Debates of April 3rd, 2019

The House resumed consideration of the motion that this House approve in general the budgetary policy of the government.

Financial Statement of the Minister of Finance

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I had just finished telling the House that the Prime Minister admitted today that in fact the former attorney general did raise concerns about political interference in the SNC-Lavalin affair to his face in September, which contradicted his claim in February that she had never once raised any such concern.

Now I will move on to another instance in which she also rang the alarm bell about the government's political interference in her role as Attorney General in the SNC-Lavalin criminal prosecution. In her testimony, she said, “Still on September 19, I spoke to [the Minister of Finance] on this matter when we were in the House...and I told him that engagements from his office to mine on SNC had to stop, that they were inappropriate.”

The Prime Minister and the government might try to deny that this conversation occurred. However, unfortunately for them, the former attorney general has now released text messages from the finance minister's chief of staff in which he confirms that the minister told him about the former attorney general's concerns. He relayed news of that conversation to Jessica Prince, the chief of staff to the former attorney general.

In other words, we know for a fact, based on the admission of the finance minister's chief of staff, that the former attorney general did raise concerns about inappropriate engagements from his office to hers on SNC, and that those engagements “had to stop”. That further contradicts the Prime Minister's claim from February, when he said, “It was her responsibility to come forward, it was their responsibility to come forward, and no one did”.

Then, on October 26, there was a conversation between Jessica Prince, who was the former attorney general's chief of staff, and Mathieu Bouchard, senior adviser to the Prime Minister. The former attorney general noted in her testimony:

However, on October 26, 2018, when my chief of staff spoke to Mathieu Bouchard, [the Prime Minister's senior adviser], and communicated to him that, given that SNC had now filed in Federal Court seeking to review the DPP's decision, surely we had moved past the idea of the Attorney General intervening or getting an opinion on the same question, Mathieu replied that he was still interested in an external legal opinion idea. Could she not get an external legal opinion on whether the DPP had exercised their discretion properly, and then on the application itself, the Attorney General could intervene and seek to stay the proceedings, given that she was awaiting a legal opinion?

The former attorney general then noted, “My chief of staff said that this would obviously be perceived as interference and her boss questioning the DPP's decision.”

This is another incident in which the chief of staff to the former attorney general told senior staff members in the Prime Minister's Office that what they were asking for would constitute, or at least be perceived as, interference. That further contradicts the Prime Minister's claim that “It was her responsibility to come forward, it was their responsibility to come forward, and no one did.”

Then, of course, we have the meeting on November 22 between the former attorney general and two senior staff members from the Prime Minister's Office, about which the former attorney general testified:

In mid-November, the PMO requested that I meet with Mathieu Bouchard and Elder Marques to discuss the matter, which I did on November 22. This meeting was quite long; I would say about an hour and a half. I was irritated by having to have this meeting, as I had already told the Prime Minister, etc., that a DPA on SNC was not going to happen, that I was not going to issue a directive. Mathieu, in this meeting, did most of the talking. He was trying to tell me that there were options and that I needed to find a solution. I took them through the DPP Act, section 15 and section 10, and talked about the prosecutorial independence as a constitutional principle, and that they were interfering. I talked about the section 13 note, which they said they had never received, but I reminded them that we sent it to them in September.

She went on:

Mathieu and Elder continued to plead their case, talking about if I'm not sure in my decision, that we could hire an eminent person to advise me. They were kicking the tires. I said no. My mind had been made up and they needed to stop. This was enough.

Yet again she had warned the Prime Minister's staff that their involvement in the criminal prosecution of SNC-Lavalin needed to stop, that this was enough.

This is another piece of evidence, I believe backed up by journal entries and perhaps even text messages that followed, that demonstrates that the former attorney general did warn the Prime Minister and his team that they were acting inappropriately, in contradiction to the Prime Minister's public statement later on, wherein he stated, “it was her responsibility to come forward, it was their responsibility to come forward, and no one did.” Of course she did.

Then, on December 5, the former attorney general came forward yet again, in a meeting between herself and Gerald Butts, the Prime Minister's most senior adviser. This is from her testimony. She stated:

On December 5, 2018, I met with Gerry Butts. We had both sought out this meeting. I wanted to speak about a number of things, including bringing up SNC and the barrage of people hounding me and my staff. Towards the end of our meeting, which was in the Château Laurier, I raised how I needed everybody to stop talking to me about SNC, as I had made up my mind and the engagements were inappropriate.

Again we have the former attorney general specifically and clearly complaining about inappropriate engagements and that “everybody”, meaning the Prime Minister's team, needed to “stop talking to me about SNC”. However, knowing this, the Prime Minister went in front of 37 million Canadians at a press conference and claimed the former attorney general had never come forward with any of her complaints about his and his team's conduct in the SNC-Lavalin corruption prosecution.

Then again on December 18, in a meeting between the former attorney general's chief of staff and the Prime Minister's two top assistants, Gerry Butts and Katie Telford, she stated:

On December 18, 2018, my chief of staff was urgently summoned to a meeting with Gerry Butts and Katie Telford to discuss SNC.

She recounts the text messages she received from her chief of staff about that meeting—text messages, I might add, that she has now released to the public and to Parliament. One message said:

Basically, they want a solution. Nothing new. They want external counsel retained to give you an opinion on whether you can review the DPP's decision here and whether you should in this case.... I told them that would be interference. Gerry said, 'Jess, there is no solution here that does not involve some interference.'

Once again, a senior staff member in the former attorney general's office said to the top staff in the Prime Minister's office that what they were doing would constitute “interference”, yet the Prime Minister—and I know I am repeating myself on this particular quote—despite this fact, went on national television and looked 37 million Canadians in the eye and claimed that if the former attorney general had any complaints or concerns about his involvement in the SNC-Lavalin prosecution, “it was her responsibility to come forward, it was their responsibility to come forward, and non one did.”

Then, on December 19, she did come forward again. She did this in her telephone call with Michael Wernick, the Prime Minister's top public servant. I am going to read a few excerpts.

She said this of the Prime Minister's conduct and the conduct of people around him, “It is entirely inappropriate and it is political interference.”

She said as well:

So we are treading on dangerous ground here—and I am going to issue my stern warning, because I cannot act in a manner and the prosecution cannot act in a manner that is not objective, that isn’t independent. I cannot act in a partisan way. I cannot be politically motivated. All of this screams of that.”

She said, ”This is going to look like nothing but political interference by the Prime Minister, by you, by everybody else that has been involved in this politically pressuring me to do this.”

She said, “ Does [the Prime Minister] understand the gravity of what this potentially could mean? This is not about saving jobs. This is about interfering with one of our fundamental institutions. This is about breaching the constitutional principle of prosecutorial independence.”

This is what she said of having to report back to the Prime Minister: “I hope that you do, because I do not think anybody respects this. This conversation that Gerry and Katie had with my chief of staff and I have it, like she wrote down what was said. Saying that they do not want to hear any more about the legalities but want to talk about jobs is entirely inappropriate.”

In fact, in that now infamous telephone conversation that has been recorded and made available for all ears to hear, the former attorney general said the term “interference” no less than nine times. The Clerk of the Privy Council responded by saying, “All right. Well, I'm going to have to report back before [the Prime Minister] leaves.”

In other words, the Clerk of the Privy Council said that he was going to report back to the Prime Minister on the contents of his conversation with the former attorney general, a conversation that the Prime Minister has used weasel words to avoid admitting he ever knew about it.

It is funny that after this audio recording came out, the Prime Minister swiftly said that he had not been briefed on the full contents of the conversation until the recording came out. Well, nobody is asking if he was briefed on the full contents of the conversation. People are never briefed on the full contents of any conversation. The question was whether he knew about the call before, during, or after it.

Today the Leader of the Opposition asked the Prime Minister precisely that question over and over again, and not once did the Prime Minister answer it.

This is important, because it once again speaks to the credibility of the Prime Minister's claim in February at that famous press conference, where he denied that the former attorney general had ever raised any concerns about his political interference in the SNC-Lavalin criminal prosecution. We now know that the former attorney general again and again raised these concerns.

We know she did so because text messages, journal entries and audio recordings prove it. They include documents, recordings, text messages from September 16, September 17, September 19, October 26, November 22, December 5, December 18, December 19.

Would the Prime Minister have us believe that he did not know about any of the warnings that she and her staff made to his top personnel and ultimately to him on these more than half a dozen occasions? It is entirely unbelievable that he did know that she had spoken out when he went before the Canadian people and claimed that she had not spoken out.

Let me reiterate what I have just gone through here. It is the number of times the former attorney general did come forward.

I will explain why I am going to give this list. It is because the Prime Minister said that if anyone thought he had done something wrong on SNC, “it was their responsibility to come forward, and no one did.”

Well, she did on all of these occasions: September 16, 2018, in a phone conversation with the PMO staff in which she raised the problem; September 17, 2018, in a meeting with the Prime Minister and the clerk; September 19, in a phone conversation between the PMO top staff and the former attorney general's top staff; September 19, again, in conversations between the former attorney general and the finance minister; October 26, in conversations between the chief of staff to the former attorney general, Jessica Prince, and the senior adviser to the Prime Minister; November 22, in a meeting between the former attorney general and two top advisers to the Prime Minister; December 5, in meetings between the former attorney general and Gerald Butts at the Chateau Laurier; December 18, in meetings between Jessica Prince, Gerald Butts and the Prime Minister's chief of staff; and, of course, December 19 in that famous and recorded phone call.

In all of those cases, she came forward and spoke up about the Prime Minister's personal and political interference in the SNC-Lavalin corruption trial. Despite all of those times when she sounded the alarm bell, the Prime Minister stood before all Canadians and said she had never once raised a concern about this matter while she was attorney general. It was a patent falsehood. He looked Canadians straight in the eye and told them something he knew or ought to have known was completely false. He did so in an attempt to discredit his former attorney general because she, of course, had demonstrated that he had personally and politically interfered in a manner inappropriate with the criminal prosecution of a Liberal-linked corporation accused of fraud and bribery.

This raises a number of important questions. Can we trust anything the Prime Minister says when he stands before Canadians and says anything at all?

The answer comes from the fact that he contradicts his own words on matters of national importance. These are not minor mistakes. He made the false statements that I have just discredited, at a press conference on a massive national controversy where he knew everybody would be watching him. We have to wonder the degree of mendacity that must consume this man that he would be capable of doing that, and the degree of incompetence that must reside in him given that the former attorney general made clear that she had documentary evidence backing up her claims. The Prime Minister ought to have known at the time he stood forward and made that comment to Canadians that the former attorney general would want to step forward and validate her claims using the text messages and other personal notes that she had kept throughout the four-month campaign when he and his team were pressuring her.

I have just spent 25 minutes thoroughly disproving the Prime Minister's February 15 press conference statement and showing that he made statements that he knew were false in respect of the former attorney general's earlier complaints about his role in the SNC affair. Let me move on to another falsehood that has been exposed.

In February when the Prime Minister was first accused of politically pressuring his former attorney general, in a Globe and Mail article by Bob Fife and Steve Chase, he immediately came out and said the story was false and there was nothing more to it. We now know through 41 pages of evidence, some of which I have relayed in the House of Commons, that his denial was false. In fact, the pressure existed and it was real. Now members on the front bench of the Liberal government no longer even deny that the former attorney general was pressured. They have now moved the goalposts and just claim that the pressure was not illegal, but that in itself is a very big change in their position.

The PMO issued statements in the 48 hours following the Fife-Chase story, in which it flatly denied pressuring the former attorney general. It denied it altogether. Now Liberals tacitly admit that they did so and do not even contest the former attorney general's validated claims that they contacted her at least 20 times, directly or through her staff, in order to get her to change her position on the prosecution of SNC-Lavalin in its fraud and bribery case. That is a second contradiction.

Let me move now to a third contradiction. In that famous September 17 meeting the Prime Minister had with the former attorney general, he twice told her that she had to immediately act to signal a willingness to negotiate a deferred prosecution agreement with SNC-Lavalin or the company would announce within weeks that its headquarters would leave Montreal. He and the Clerk of the Privy Council, along with others in the top levels of the Prime Minister's inner circle, made it clear that she had mere days to do this or the headquarters move would be announced. They even said that it would be announced before the Quebec election. That election was only days away.

We know a number of things about that claim. One is that the company has not since announced it will move its headquarters absent a deferred prosecution agreement. In fact, the headquarters remains in Montreal and no public announcement to the contrary has been made. Two is that the company cannot move its headquarters out of Montreal because it has a $1.5-billion loan agreement with the Quebec pension plan requiring that it remain in that city until the year 2024.

Three is that it just signed a 20-year lease on its building in Montreal and announced a multi-million dollar renovation to the headquarters to accommodate its thousands of Montreal-area employees. A company does not do purpose renovations for its employees and then get up and move. It is a waste of money.

Four is that moving the SNC-Lavalin headquarters out of Montreal would not in any way limit the company's criminal liability in the charges of fraud and bribery. Those charges would go ahead no matter whether the headquarters of SNC-Lavalin were located in London; Washington; Sydney, Australia; or Kalamazoo. At the end of the day, the trial would happen no less. It is not like an individual bank-robbing fugitive, who skips the country and vanishes into the Bermuda Triangle, never to be prosecuted. The company is facing prosecution no matter where its headquarters is. Therefore, the Prime Minister's claim that it would move was never sensible at all.

Five is that the CEO of SNC-Lavalin has said, in an interview on the Business News Network, that he never threatened that the headquarters of the company would leave if the prosecution proceeded. Finally, we know that any damage to the company's reputation as a result of a conviction would be similarly severe if the company signed on to a deferred prosecution agreement, because signing said agreement would require SNC to admit to egregious criminal acts of fraud and bribery. Doing so through a criminal conviction or doing so through an admission in such an agreement would have an equally large impact on the company's reputation. Therefore, signing an agreement would not in any way, shape or form protect the company's headquarters in Montreal, as the Prime Minister falsely claimed.

It is interesting that when I asked the Prime Minister in the House of Commons whether he had told the former attorney general that the headquarters would move, he denied having said so. The problem with that denial, and here we have yet another falsehood, is that he had repeated the false claim that SNC would move out of Montreal and Canada altogether at his famous February 15 press conference. In other words, he is making this false claim not just to her face but to all Canadians and, therefore, cannot deny having made it at all. That is yet another false statement that the Prime Minister and his office have made in this entire affair.

I just listed three falsehoods that the Prime Minister has uttered in respect of his involvement in trying to halt the charges against SNC-Lavalin for fraud and corruption. That does not even take into consideration the falsehoods his staff members have stated. Gerald Butts came before the justice committee and said that if they were doing anything wrong why were they not having this conversation in September, October, November and December. However, all of the documentary evidence shows they were having exactly that conversation in September, October, November and December. Text messages show that they were having that conversation in September, October, November and December. By his own admission, he had that conversation with the former attorney general at the Château Laurier lounge in December.

The Prime Minister has admitted that he attended meetings with the former attorney general where she raised her objections, in September. We have text messages showing that the conversation was happening in the two middle months of October and November. In other words, Gerald Butts' statement that they were not having that conversation in those four months was just patently false, and proven false now by evidence. It is not hearsay, but evidence such as text messages, journal entries and of course we now have heard the audio of the conversation in December with the Clerk of the Privy Council.

The fact that Gerald Butts felt no compunction about going before a parliamentary committee and stating such a patent falsehood just speaks to how liberally the government and its most senior members are prepared to dispense with the truth in order to defend themselves in this corruption scandal.

If a prime minister and members of his inner sanctum are prepared to contradict themselves and state easily disprovable falsehoods over and over again, is that really the behaviour of someone who has nothing to hide?

If it is, if they in fact have nothing to hide, then why will they not let us conduct a full investigation? Why do we not take all the names of the people who appear in those text messages, which are now in the possession of the House of Commons, and bring them before a parliamentary committee to question them on their alleged interference in the SNC-Lavalin corruption trial?

If the Prime Minister is so confident that he and his team did nothing wrong or illegal, why would he not let the sunshine in? After all, during the campaign, he said that sunshine was the best disinfectant, or as he called it, plagiarizing Laurier, “Sunny ways, my friends. Sunny ways.”

Let us open up the curtains in the ethics committee and let the sunshine and the warm glow pour in, and let us see what we find when all the dark corners are lit up. So far, the Prime Minister has refused to allow the sunshine in. He shut down the justice committee and he shut down the ethics committee, so we have a justice committee with no justice and an ethics committee with no ethics.

That being said, I have some hope that this investigation may well resume, and I base that on the comments of two Liberal MPs who are members of the ethics committee. Two members have stated that the reason they were initially against having an ethics committee investigation into the SNC-Lavalin affair was that it would be premature. We needed to see all the documentary evidence. At that time, it had not been tabled with the House of Commons.

Well, now it has. The documents came to all of us on Friday evening. We have now had an opportunity to read through the plethora of text messages, journal entries and written accounts, and of course we have all listened to the famous audio tape. Now that we have seen all the evidence that is available so far, those two Liberal MPs who claimed that the investigation was premature can put their minds at ease and allow that investigation to go ahead.

What more could we find if we did such an investigation? One, we could find out why the Prime Minister stated falsely that the former attorney general had never raised any concerns about his interference in the SNC-Lavalin affair. Two, we could find out if someone lied to the former attorney general in order to try to get her to shelve the criminal prosecution, itself potentially a crime under section 139 of the Criminal Code. Three, we could find out if the shuffle of the former attorney general out of her position was specifically designed to allow for SNC-Lavalin to get a deferred prosecution agreement. I will pause on this point for a moment.

Let us examine the state of play in SNC-Lavalin's quest to have its corruption charges shelved. Under the former attorney general, its quest had failed. She had considered whether or not it would be appropriate to overturn the top prosecutor and instruct that a deal with SNC-Lavalin go ahead to shelve the trial, and she had decided that it was not appropriate.

Her mind was made up, something we see in the conversations that were recorded, the text messages that were sent and the other written evidence that has since been provided. In other words, under the former attorney general, SNC-Lavalin's request to have the charges shelved was denied.

The current Attorney General, the person who replaced the outgoing justice minister, has now said he is open to the idea of granting a deferred prosecution agreement.

The cabinet shuffle caused a material change in the state of play. With respect to SNC's desire to have a deal shelving charges, we have gone from a “no” under the former attorney general to a “maybe” under the current Attorney General.

Whether or not the Prime Minister wants to deny that was his intention, it is the result of the shuffle. There is absolutely no doubt that the status of a possible deferred prosecution agreement for SNC-Lavalin has changed as a result of the cabinet shuffle. The door was slammed shut under the former attorney general. The door is now open under the current Attorney General.

We need to know if the current Attorney General received any instructions on this matter before he got the appointment. Did the Prime Minister, or more likely a member of his staff or inner circle, communicate to the incoming Attorney General or those around him that his role as the top law officer of the Crown would involve extending a settlement to SNC-Lavalin?

If the answer is yes, then we would know that the purpose of the shuffle was precisely to get a special deal for this powerful Liberal-linked corporation. That was the theory that the outgoing attorney general had in her mind. She has since written in her letter to the justice committee that she was planning to resign as veterans affairs minister if the incoming attorney general decided to impose a settlement to shelve the charges against SNC-Lavalin. She believed, as she said numerous times to the Prime Minister's inner circle at the time of the shuffle, that she knew why she was being moved. The reason was that she believed the Prime Minister was determined to see this Liberal-linked company get out of a trial, and she was not prepared to do it.

If she is right, then the corollary of that fact is likely that the incoming Attorney General was willing to grant a settlement to the company. Canadians need to know that.

Here is the real and serious risk to the rule of law going forward. Even if we forget about the abuses that might have happened in the past, it is highly possible and maybe even probable that the Prime Minister plans to use his new and more malleable Attorney General to issue a settlement, shelving the SNC-Lavalin fraud and bribery charges right after the next election.

If the Prime Minister plans once again to interfere politically and have his Attorney General issue a written directive to the top prosecutor, instructing her to shelve the charges and sign a deal with this company, then Canadians should know about it before they go to the polls.

I am prepared to make an announcement, if I can be so bold, about the approach Conservatives would take in this matter. I can state confidently that if the current Conservative leader is made prime minister in October, he will not direct his attorney general, whomever he or she may be, to interfere and shelve the criminal charges that SNC-Lavalin faces. Canadians can know that. He has stated very clearly that he will not politically and personally interfere to extend a deal to SNC-Lavalin.

They do not know that about the current Prime Minister. He and his current Attorney General are leaving open the possibility, amazingly so, that they may still politically interfere in this trial. That is the astonishing thing. Let us just behold that for a moment.

After the two months that the Prime Minister has had, one would think the approach he would take to putting this to rest would be to say definitively to Canadians that he is out of this, that he is not going to get involved ever again in a criminal prosecution. To the contrary, he is saying exactly the opposite. He is saying that his current Attorney General may still interfere in the trial, that he may write a letter to the top prosecutor requiring that the prosecutor extend a settlement to the company. That would be a gross miscarriage of justice. Let us think about that.

If a homeless person is charged with stealing a loaf of bread, that person does not have the ability to knock on the door of the Prime Minister's Office and ask, “Can you make the judge go light on me? Could you ask the Crown prosecutor to drop the charges and sign a deal where I just apologize and give back the stolen bread?” If it does not work that way for a homeless man, why should it work that way for a powerful, multi-billion dollar, Liberal-linked corporation?

If we live in a country where corporations have the ability to buy justice with wads of cash paid to lobbyists, those lobbyists can swarm all over Parliament Hill like flies on honey and influence the Prime Minister to step in and let the corporation off. If that is really the way the Prime Minister wants to administer the justice system in this country, we should know about it before the election, so that Canadians can consider it in their vote.

In other words, this is not just about holding the government accountable for what it has already done. This is about giving Canadians all of the information about what the government might yet do.

If the Prime Minister thinks he can defend the possibility of having his Attorney General get this company off trial, then he should go on the campaign trail and say so. He should go from one end of the country to the other and tell people that. He should go to Montreal and talk to the people who have been robbed by this company and its executives in the bribery affair at the Jacques Cartier Bridge, or at the McGill University Health Centre, another instance of bribery.

More than that, the next time he is in Africa, he should go to Libya and go into the streets of the ghettos where the people live in squalor. He should tell the people there that he has no problem granting special deals to the company that is alleged to have stolen $130 million of their money, because that is the allegation before us here. Some have tried to trivialize it by saying that it was just Gadhafi getting yachts and prostitutes from this Canadian corporation. They say it was just a victimless crime, and therefore it is better to settle the matter and avoid a messy trial. That is the argument we hear from proponents of a so-called deferred prosecution agreement for SNC-Lavalin. However, it was not a victimless crime. It was wretched, parasitical corruption that robbed the people of Libya of $130 million. These are among the poorest people in the world. They do not have $130 million to spare. If that kind of wretched corruption is not deserving of prosecution in a criminal court, then I do not know what is.

Furthermore, this is not a case of a few bad apples making a small mistake and the company finding out and reporting that mistake. Rather, the company had to be caught. It was only when Swiss authorities found out about some of the corruption and prosecuted one of SNC's perpetrators that the RCMP got wind of the matter and began its own investigation, which resulted in the charges roughly four years ago.

It was not that the company was so honest and so pure in trying to expel from its midst these bad apples that it came forward and fessed up and tried to make it right. No, it had to be caught, just like it had to be caught in the bribery case of Jacques Cartier Bridge, the bribery case of Montreal, and criminal allegations that have surfaced with respect to the company in Mexico, in Panama, in Switzerland, in Libya, and God knows where else. This is a company with a track record of systemic corruption at the highest levels. The former CEO has pleaded guilty to bribery. We are not just talking about a few small bad apples who played junior roles in faraway lands. It is a problem of systemic corruption, top to bottom, through and through.

This is going to be on the ballot in the next election. Canadians will have to decide whether they think it is appropriate for a prime minister to personally and politically interfere to shelve criminal charges of fraud and bribery against a powerful party-linked company like this one. That is one of the reasons we need the ethics committee to get all the facts now, before Canadians vote. If the Prime Minister's intention is to let the company off after the election, when he no longer needs voters, he should say so now. He should look people in the eye and say that he believes that the Attorney General in his cabinet would be completely justified in writing a directive to the prosecutor saying, “Settle this matter, make it go away, sweep it under the rug, let them pay a fine, say sorry and move on.”

I can tell members that this will not be the position of the Conservative Party. The Conservative position will be very simple and very clear: The prosecutor and the prosecutor alone should decide how to proceed with these criminal charges.

So far, the prosecutor, the DPP, has shown that she understands the law, and she has acted in a manner that is correct in this case. We expect that she should be allowed to continue to do so. A Conservative government will make sure that she or anyone who replaces her, with time, has that independent role.

That is exactly what the Director of Public Prosecutions Act foresaw when it became law in 2006 with the passage of the Federal Accountability Act. It foresaw an independent prosecutor, completely free of politics, someone who had so much leeway that she could not even be fired by the Prime Minister or any member of the government unless all of the House of Commons voted to validate such a firing. The purpose of that was to keep the prosecutorial function of our legal system out of the reach of politicians, yet the Prime Minister extended his reach as far as he could to try to interfere with that in this case.

What is perhaps even more insulting is that the Prime Minister thought he could distract Canadians from the resulting scandal by spraying $41 billion of cash at them in his recent cover-up budget. He thought Canadians would completely forget that his former attorney general had accused him of interfering in a criminal prosecution if he pulled out a fire hose filled with dollar signs and sprayed it all over the country. Frankly, what has happened is not that the budget has distracted from his scandal; his scandal has distracted from his budget. It does not seem to matter how much money he sprays around. Canadians are determined to protect the independence of our prosecution and our rule of law in this country.

Here is the bad consequence that comes from that kind of pre-election political spending. It comes with a cost. I call it the Liberal three steps: massive scandal before the election, massive deficit spending to distract from it, and then of course, massive tax increases to pay for it all after the election is over.

Money is not free. The government does not actually have any money. All it spends comes from the people who earned it in the first place. It cannot give people anything without first taking it away, and the Prime Minister likes to take it away. He has already raised taxes on the average Canadian family by $800. He took away tax credits for kids' sports, children's art, students' textbooks and some of their tuition fees. He took away the transit tax credit from passengers on buses. He took away numerous other tax breaks, like income splitting, which helped bring fairness to families where one spouse earns more than another. He brought in new tax penalties for small business, including those who share their work and earnings with family members or who save within their company for retirement, maternity leave or a rainy day. He has increased CPP payroll taxes for both small businesses and workers. That does not even include the carbon tax, which kicked in on Monday, punishing commuters and seniors on fixed incomes who are trying to heat their homes.

That is the Prime Minister's record of tax increases so far, but the worst is yet to come. We know that, because he has tried to raise taxes even more. He attempted to tax health and dental benefits provided by companies to their employees. He backed off after those companies and those employees rose up against him. He tried to impose a 73% tax on the passive income of small businesses. He tried to double the tax paid by farmers and small business owners when they pass their companies down to the next generation within their families. He even tried to take away the disability tax credit from diabetics.

Finally, the tax increase that was perhaps the most disgusting, and from which he was forced to back down, was when he tried to tax employee discounts, like when a waitress gets a free chicken salad sandwich at two in the morning when she is on her 15-minute break. The Prime Minister wanted the restaurant owner to add the value of that sandwich to the waitress's T4 slip so that she could pay tax on that at the end of the year. It was just petty. His desire to extract more money from the pockets of the people who earn it so he can spend it for them is insatiable, and it is just getting started. He put all those tax increases on hold, but they will all be back after the next election when he no longer needs voters but still needs their money.

Then there is the truth about the carbon tax. The Prime Minister claims that an Ontario family will pay only about $600 in higher gas, heat, groceries and other inflation costs. However, we are asked to take his word for it. I filed access to information requests to get all the supporting documents that led to that calculation, and guess what I received? I received a big pile of documents with black ink all over the numbers. In other words, they gave me the costing, they just did not let me see the numbers. Why? If the tax costs what the government claims, would it not want to produce all the numbers so that Canadians could confirm that fact? The government did not, because this tax will cost much more than the government admits.

The cost is hard to calculate, unlike income taxes, which we can calculate at the end of the year when tax returns are filed or by simply looking at the payroll deductions, and unlike sales taxes, which we can add up simply by looking at the receipts for things we buy.

Carbon taxes are insidious. They are embedded in every single good and service we buy. Sometimes they are embedded and compounded multiple times in the same product. For example, when one buys a piece of farm equipment, one will pay for the transportation of the farm equipment to the local John Deere outlet but also pay a tax on the energy used in the manufacturing outlet that assembled it. There is lots of steel in John Deere tractors, so one will pay for the carbon tax that was embedded in the cost of shaping and moulding that steel at the steel mill.

Did I mention that the government is charging HST on the carbon tax? It is a tax on a tax. The Prime Minister's estimate of the cost of the carbon tax does not include the compounding effect of the HST on the carbon tax.

If despite everything I have just told members they still believe that the Prime Minister's carbon tax will only cost what he says, that does not account for his plan to increase the rate after the next election. According to government documents from both environment and finance, after 2022, just three years from now, the tax will have to increase in “severity”. That means the rate will actually go up, but by how much?

According to an Environment Canada document, the rate would have to go up to between $100 and $300 a tonne of carbon. Right now, the rate is only $20. If it did go up to $300, it would be 15 times higher than it is right now. Based on the government's own numbers, that would equal $5,000 for a family of 2.5 people in Saskatchewan, or $3,000 for a similar family in Ontario.

If someone has a big family fortune, an extra $5,000 in higher gas, heat and grocery costs would not be such a big deal. However, unlike the Prime Minister, most Canadians do not inherit tax-preferred trust funds, and therefore, they cannot absorb the cost of a $3,000 or $5,000 carbon tax, as may be the case if he is re-elected.

The Prime Minister has no empathy whatsoever for people who are struggling with the cost of living. In fact, he was in Vancouver and was asked about the $1.60 a litre people were paying for gas not long ago in that city. He said that is exactly what we want. He wants high gas prices, because he thinks they will make people behave better. I am not exactly sure what behaviour he is referring to. Does the Prime Minister believe that people should stop driving to work or stop heating their homes? Are those bad behaviours, according to the Prime Minister?

We know he has no concern whatsoever about increasing the cost of living by imposing higher taxes. He has done it already. All the evidence, from the carbon tax cover-up to his attempted tax increases elsewhere, suggest that he will do much more after the election, when he no longer needs voters but still needs their money.

That was the Kathleen Wynne-Dalton McGuinty technique for 14 years. Who was the architect of that agenda? It was Gerald Butts, the outgoing PMO puppet master, who recently resigned in disgrace because of the SNC-Lavalin scandal. We know that he is still the Prime Minister's intellectual architect, the man who is calling all the shots and will be running the Liberal campaign. His modus operandi is to rack up massive spending and pay for it by piling taxes on the working class. That is why Ontario had the highest poverty rates and the lowest middle-class income growth of any province in Canada during the McGuinty-Wynne reign. We do not need to see that disaster exacted on Canadians.

The next reason we know the current Prime Minister will raise taxes is that he is running out of money. His deficits are growing. They are $20 billion this year, the year in which he promised a balanced budget. Remember his famous words, “the budget will balance itself”? That sure has not happened in the appointed time schedule he claimed it would during the last election. That debt will always metastasize into higher taxes, because somebody has to pay those rich bondholders. They do not lend us money out of the goodness of their hearts. They expect to get more back from Canadians than they lend, and they will if the Prime Minister keeps adding debt at unsustainable rates.

That is the record so far. There is good news and bad news. The good news is that we are not broke yet. The bad news is that we will be if the current Prime Minister is re-elected.

Families who are running out of money but are not yet broke sit down at the kitchen table and discuss what to do about the situation. The responsible decision is to right the course, get back on track and start to balance the family budget before the repo man comes knocking on the door five or six years down the road. They do not go on a vacation to some fancy island in a faraway place, blow even more money and say they will worry about the repo man when he arrives at their home and they will cross that bridge when they get to it. No, they make responsible decisions in the present and modest adjustments to get on track so that they can be financially sustainable into the future.

That is exactly what Canadian households expect of their politicians. They expect that we, like them, live within our means, spend only what we have and leave more in the pockets of Canadians. They know, because they have had to make household payments, that the basic rules of life are that we cannot borrow our way out of debt, budgets do not balance themselves and we cannot make other people pay for our mistakes.

These are lessons the Prime Minister would do well to learn. I suspect he will not, but that is okay. In October Canadians will have another choice, the son of a working-class family who understands the basic rules of life that we have to live within our means, leave more in people's pockets and let them get ahead.

[The Deputy Speaker, Conservative, Bruce Stanton]

Order. The hon. member for Carleton will have an opportunity to continue his comments when the House resumes debate on this motion.

The House resumed from April 1 consideration of the motion that Bill C-420, An Act to amend the Canada Labour Code, the Official Languages Act and the Canada Business Corporations Act, be read the second time and referred to a committee.

Canada Labour Code

[The Deputy Speaker, Conservative, Bruce Stanton]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-420 under private members' business.

Call in the members.

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

Vote #1279

[The Speaker, Liberal, Geoff Regan]

I declare the motion lost.

It being 6:11 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Fairness for All Canadian Taxpayers Act

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

moved that Bill S-243, An Act to amend the Canada Revenue Agency Act (reporting on unpaid income tax), be read the second time and referred to a committee.

Mr. Speaker, right now, Canadians are busy collecting tax slips and preparing to file their annual income tax returns. Despite the fact that no Canadian loves to pay income tax or particularly enjoys the act of complying with an increasingly onerous tax system, we can take comfort and pride in knowing that we live in a country where most taxpayers honestly report their income.

Respect for the rule of law is a foundational Canadian value. However, the biggest threat to a culture of compliance is the notion that other people or businesses do not comply, so tax evasion threatens the legitimacy of the entire tax collection system. If Canadians see that some Canadians succeed in evading taxes, other Canadians will resent that they are paying and complying, because they know they will have to pay even more as a result.

This past fall, the Auditor General tabled a report that pointed out the challenges that the Canada Revenue Agency has faced with collecting taxes from those who have offshore transactions. The Auditor General found that people or businesses with offshore transactions were given months or even years to comply with requests for information from the Canada Revenue Agency, and sometimes had their cases dropped with zero taxes collected or assessed. This is while regular Canadians are automatically reassessed and penalized after 90 days if they fail to respond.

The report from the Auditor General confirmed what many Canadians have suspected, and that is that there is a serious problem with offshore tax compliance and that some wealthy people have advantages that normal Canadians do not when it comes to avoiding taxes.

While compliance is the norm in Canada, some will under-report their income and others will not file returns at all. The underground economy of unreported cash transactions and the use of overseas tax havens are assumed to create a multi-billion dollar gap between what the law requires Canadians to pay and the amount that the Canada Revenue Agency actually collects. I say “assumed” because there is no real estimate of this gap. Bill S-243 seeks to measure, report on and hold the CRA accountable for its efforts to eliminate this tax gap.

As the opposition shadow minister for national revenue, I am pleased to join a multi-party effort to address the tax gap by sponsoring Bill S-243 in the House of Commons. The bill was introduced in the other place by Senator Percy Downe of Prince Edward Island, was amended at the Standing Senate Committee on National Finance and was passed with all-party support. I hope colleagues from all parties will support and swiftly pass the bill in the House of Commons as well.

In my remarks today, I am going to address what the bill would do, what it would not do and why it would be important for Canadians.

Bill S-243 would do three things. It would require the Canada Revenue Agency to publish distinct lists for convictions for both domestic and overseas tax evasion; to calculate and report on the income tax gap; and to give the Parliamentary Budget Officer information needed to calculate the tax gap for an independent assessment.

The bill starts by instructing the Canada Revenue Agency to publish distinct and detailed lists of convictions for tax evasion within Canada and overseas. As the Panama and paradise papers demonstrated, overseas tax evasion is a significant problem for Canada.

Canadians might be shocked to know that years after the revelations contained in those date leaks, no charges have been laid. They might also be shocked to know that according to the Canada Revenue Agency's own information, there have been less than a dozen successful prosecutions for tax fraud and evasion in the past year, and that is in a country with some 30 million annual tax filings.

Law-abiding taxpayers deserve to know what the government is doing to enforce the law equally and to crack down on Canadians who illegally hide money overseas as well as those who refuse to report their income at home.

Presently, it is difficult to find such information and details are not provided. Publishing two separate lists would help Canadians understand the extent of overseas tax evasion and would spur efforts by the Canada Revenue Agency to bring cases to trial in a timely manner. Canadians should never feel that the wealthy and well-connected can evade income tax without consequences.

Bill S-243 would also require the Minister of National Revenue to calculate and report on the income tax gap every three years. This would allow the CRA three years in which to gather all applicable data, analyze it and release a reasonable estimate of the difference between taxes owing under the Income Tax Act and those that it actually collects.

Analyzing and calculating the tax gap is an involved process which will take time. Therefore, a three-year reporting cycle would ensure that measurement and reporting would not consume a disproportionate amount of the CRA's resources. The three-year cycle would also allow time for increased efforts to combat tax evasion to take effect and for a long-term trend line to be plotted.

Finally, the bill would instruct the minister to collect, compile, analyze and abstract statistics on the income tax gap and provide that data to the Parliamentary Budget Officer. As such, he could verify the CRA's work and offer an independent opinion on the tax gap. Combined with CRA's reporting, this should allow a reasonably accurate estimate of the tax gap to be charted.

Bill S-243 would mandate that the minister consider certain factors in calculating the gap, such as the value of reassessments as a result of audits on individual, corporate and trust returns and the rate of incorrect returns that were not detected until being audited. However, it would not limit consideration to only these factors. It explicitly states that the calculation of the tax gap would be based on such factors, but with flexibility to consider other things as well.

The bill does not address tax avoidance schemes that are legal under the Income Tax Act or instruct the CRA to calculate potential revenue from amendments to the Income Tax Act. This bill would not mandate particular tax compliance efforts or targeting of any classes of taxpayer for greater scrutiny. It only aims to gather the evidence on which to base tax collection decisions, and it would leave those decisions to the government of the day.

The bill would not infringe on the privacy of Canadians. Likewise, material that the CRA must share with the Parliamentary Budget Officer would be subject to privacy protections that would prevent identification of individual taxpayers. This bill would not create new taxes, modify existing taxes nor change tax treatment. The bill is an effort to identify the extent of tax evasion to ensure that existing laws are being equally enforced.

I would like to address some of the observations raised by witnesses at the Standing Senate Committee on National Finance and by stakeholders with whom I have consulted.

Witnesses pointed out that Bill S-243 could make Canada a world leader in legislating measurement and reporting on the tax gap. Other countries are experimenting with measurement methodology, but none have written the reporting requirements into law. Canada has an opportunity to be a world leader in understanding the scope of its tax evasion problem and be better equipped to address it.

This is a problem that faces countries throughout the world. It is not unique to Canada, but Canada can and should take a leading role in addressing this problem.

Despite the fact that such reporting is new, I am confident that Canada's public servants are up to the challenge of developing a practical methodology over the next three years.

A further suggestion made at committee involved giving the Parliamentary Budget Officer access to anonymized underlying tax data instead of just the CRA's own analysis of tax data. This would allow the PBO to generate a more precise independent opinion, but it would require amending the Income Tax Act to address privacy protections. While I agree that greater precision from the PBO is desirable, such an amendment is beyond the scope of the bill.

Some witnesses thought Bill S-243 did not go far enough. They thought it should be expanded to include measuring tax avoidance in general rather than just tax evasion and that it should address evasion of other taxes like the goods and services tax and excise on liquor and tobacco. The bill targets only the gap between income taxes legally owed under the Income Tax Act as written and income tax revenue collected. Measuring tax avoidance would be more complex than the measures contained in this bill and would have to be left to other legislation in the future.

Witnesses also told the committee that participants in the underground economy often evaded multiple taxes at once. A business that neither collects nor remits GST, for example, almost certainly fails to report the income it receives.

I agree that other forms of evasion involving GST or excise duties such as contraband tobacco should be measured and reported as well for an accurate picture of the overall general tax gap. However, income tax is a reasonable place to start to measure the tax gap. Right now none of this is measured at all, so at least this bill we can begin to measure the tax gap by starting with income tax.

Personal and corporate income taxes account for two-thirds of the total tax revenue, so this is a good place for us to start. There is certainly nothing in the bill stopping a future Parliament or a future government from expanding the measurement and reporting system to include other taxes and duties at a later date.

Some stakeholders raised concerns that moves to measure and report on the tax gap would spur efforts by the agency to target law-abiding taxpayers, particularly small businesses, with sterner enforcement measures. I understand this concern and in general I share it, but I think that it is misplaced in the case of the bill.

The issue of overzealous tax collection measures is a separate issue and it is one that this Parliament could have dealt with by establishing a legislated duty of care between the agency and taxpayers. However, the House chose not to do so when Motion No. 43 was voted on in September 2016.

The bill seeks to improve Canada's ability to measure how effective our revenue collection and law enforcement systems are. It seeks to promote better governance through better information. The issue of the CRA's treatment of law-abiding taxpayers is a separate unrelated issue.

The proposed bill does not mandate any particular enforcement actions. It does not single out any class of taxpayers for further attention. It does not amend income tax policy to close perceived loopholes or to raise anyone's tax burden. It is simply a measure to uphold the rule of law. It aims to gather the information needed to ensure that all Canadians comply with the law, that no one can evade it due to wealth or overseas connections and so increase the burden on those who comply.

By requiring the CRA to post distinct lists of both foreign and domestic tax evasion convictions, it will likely focus greater compliance attention on overseas tax haven use. That is good news for honest Canadian businesses.

Bill S-243 would improve Canadian governance through better information. It would allow Canadians to see how effective tax collection and law enforcement efforts are and to demand better. It would provide successive governments the information they need to address domestic and overseas tax evasion more effectively and to provide the impetus to give offshore tax havens the enforcement attention they need. It would provide the evidence for evidence-based policy making. It would demonstrate Parliament's commitment to the rule of law and to treating Canadians equally and permitting none to cheat, thus increasing Canadians' overall confidence in our institutions. It would increase accountability from the Canada Revenue Agency through independent reviews by the Parliamentary Budget Officer.

This is important for small businesses, which often feel like they are the lowest hanging fruit for tax compliance scrutiny. They have watched as the Auditor General has pointed out how those with overseas transactions are sometimes given months or years to comply and maybe have the case thrown out, while a small business person with only domestic business has only 90 days. It is important for law-abiding taxpayers of more modest means to see that the wealthy and well-connected using tax havens are brought to justice. This is important for large companies and wealthy individuals to know that Canada upholds the rule of law.

No one likes paying taxes, but Canadians like cheaters even less. The bill would show Canadians that parliamentarians of all parties take such cheating seriously. It would show them that Parliament takes steps to understand the scope of the problem to better address it.

Therefore, I encourage colleagues from all parties to support the bill, grant it swift passage through the House and ensure that we maintain our culture of compliance and a culture where people believe in their institutions, have confidence in their institutions and are willing to comply with the tax laws that currently exist.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for his initiative and for the speech he gave at the beginning of the debate on this Senate bill, which has three very worthwhile objectives. I am pleased that my Conservative colleague has joined the movement to call for more transparency within the Canada Revenue Agency, to calculate the tax gap and to share information with the Parliamentary Budget Officer.

However, since my colleague is a Conservative, I would like him to shed some light on what happened between the time when the Conservatives were in power and today. The Parliamentary Budget Officer fought long and hard to get this data and finally managed to get a positive response from the current government. However, he had to threaten to take the government to court to get it, particularly because Mr. Harper's Conservative government absolutely did not want to provide him with that information.

Can my colleague tell me what happened since the time when Mr. Harper's Conservative government was in power? Why are today's Conservatives proposing this initiative?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I am not going to comment on what happened in the previous Parliament. I was not a member of the previous Parliament. However, I will say that there remains a reluctance at the agency, even now, to provide information. I am pleased that things seem to be moving in the right direction.

To begin with, I hope that members on the government side will support this bill. I hope that the information will get to the PBO and that the PBO will receive the information necessary to independently verify its accuracy or to provide a separate opinion from the CRA. We will see, first of all, if the bill is indeed supported by the government and the government party members. I just hope we continue to move in the right direction on this and are able to measure accurately the tax gaps so that Canadians can have confidence in our institutions and in the fairness of our institutions.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, it is interesting that the member did not really want to comment on the former administration. What we have seen with this government is a very aggressive approach in terms of looking at ways we can recover taxes. We have literally seen close to a billion dollars. That is hundreds of millions of dollars over two consecutive budgets. We are trying to recover millions and millions that people have been avoiding paying in taxes. The Conservatives actually voted against that. Now we have this bill, which actually originated in the Senate.

When the Conservatives talk about publication, can he give us some specifics? What do they want CRA to actually publish?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I am going to start with his preamble and then answer his question. In his preamble, he congratulated his own party for what he is characterizing as the great work it has done in collection, which the Liberals measure only by the amount of money they spend. That is how they measure action, I guess, on that side.

I wonder if the member actually read the Auditor General's report tabled this fall, wherein the Auditor General said that there is no evidence that any of the additional money spent had any successful or tangible result. The report remarked on how the agency treats those who have offshore transactions differently than domestic taxpayers.

The government is in the fourth year of its mandate. It has its own track record now. The Auditor General has revealed just how poorly the government has done, despite the money it has spent on overseas tax avoidance and evasion. There have been 11 convictions and sentencing events in the last 12 months, out of 30 million taxes filed.

I want to answer his question, though. He asked what information should be provided. Right now, we do not know who has been convicted. We do not know whether they are foreign or domestic. The current minister has mixed those two in her answers and replies in this House. We want specificity with the reporting of convictions, whether they are domestic or foreign.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Mr. Speaker, I rise today to speak to the Senate public bill, Bill S-243.

Before I begin, I would like to thank Senator Downe for his work in both highlighting the importance of better understanding Canada's tax gap and the fight against tax evasion and aggressive tax avoidance. Rest assured, the government shares the senator's concerns and understands the importance of both issues.

Early in her mandate in April 2016, the Minister of National Revenue publicly committed to releasing a series of reports that would provide detailed information about Canada's tax gap for the first time ever. In fact, from an overall tax gap perspective, few countries produce and publish tax gaps for all of their major tax categories. The OECD has stated that, as of 2015, only eight countries measured and published the major components of their tax gaps. Canada was proud to join this group of eight starting in 2016. With this information, the government is able to report on the difference between the taxes that would be paid if all obligations were met and taxes that are actually paid and collected. It is important for Canadians to have an awareness of Canada's tax gap and an appreciation of how evading taxes cheats us all.

Canada is now one of the leaders in the tax gap estimation among OECD countries. For example, the CRA was the first tax administration to use underground economy statistics to estimate the personal income tax gap and the first to publish an estimate of the OECD concept of tax assured. As the minister indicated, this tax gap information serves as an important tool that helps build the confidence of Canadians about the fairness of the tax system.

Having an understanding of the tax gap helps CRA identify areas of higher risk for non-compliance. In turn, the CRA can allocate resources where the risks are highest. Generally speaking, tax gap information can provide tax administrations with insights into the overall health of the tax system and indicate the levels of non-compliance with tax laws.

The agency has adopted a progressive approach to estimating Canada's tax gap. Its approach involves taking the time to develop appropriate, well-founded research methods that work in the Canadian context. The method varies depending on the type of tax. Sometimes, a single tax may require the use of more than one assessment method, as I am sure members understand.

I am pleased to announce that the agency's work has resulted in the release of four reports on tax gaps in Canada. A fifth report on the incorporated business tax gap will be published later this year.

The CRA released the first report in June 2016. It was a conceptual study that defined the tax gap. The study presented the challenges involved in estimating the tax gap and it provided details about how tax gap estimates can be used in administering taxes. The study also described tax gap estimations in other countries.

A second report, published in June 2016, provided an estimate for the goods and services tax and harmonized sales tax gap. With support from the Department of Finance, this report estimated the tax gap to be $4.9 billion in 2014, with the federal component accounting for $2.9 billion.

The third report, published in June 2017, estimated the domestic personal income tax gap to be about $8.7 billion in 2014. This amount included both the tax gap related to the underground economy, $6.5 billion, and payment of taxes, $2.2 billion.

Most recently, the fourth report, which was released in June 2018, focused on the international tax gap and compliance results for the federal personal income tax system. It estimated the international personal income tax gap to be between $800 million and $3 billion in 2014.

I will take a moment to highlight in greater detail some of the information that was brought to light as a result of the release of the fourth report on the international personal income tax gap.

In the fourth report, the CRA worked to define how it measures the international tax gap. Essentially, the report sets out to help Canadians understand our international tax obligations. The report explains Canada's reporting obligations and voluntary compliance, as well as reports on audit activities related to international non-compliance. It also estimates the tax gap related to offshore investment income, in addition to describing the end results of the CRA's compliance tools, activities and results.

Defining the issue was crucial to helping Canadians understand the international tax gap. Without a doubt, this is a complex issue, and it can be extremely difficult to measure non-compliance internationally given the sophisticated methods some individuals use to hide their income and assets.

It is also important to note that Canada was recognized as the first of the G7 countries to publish its study of the international tax gap using a new method. The method was developed using a collaborative approach that included offshore financial and banking data to estimate tax loss due to unreported investments hidden offshore.

Moreover, the CRA works closely with experts and international partners from the United Kingdom, United States, Denmark and Australia to develop robust methodologies to assess the different components of the tax gap. As I mentioned, international tax schemes are more sophisticated and more complex than ever. I cannot overemphasize the importance of strong international relations and partnerships to tackle tax evasion and aggressive tax avoidance on a global scale.

Canada is well regarded for our contributions internationally. We take the opportunity to share expertise and learn from the experience of other countries to understand the global intricacies of tax evasion and aggressive tax avoidance. In fact, Canada is one of more than 65 nations that send out and receive country-by-country reports. Shared automatically, these reports provide countries with access to information about multinational corporations' activities in every country in which they operate. Once analyzed, this information provides great insight into the operations of large companies.

The common reporting standard is another tool used to gain access to information on Canadians' overseas bank accounts. With this system, Canada and close to 100 other countries exchange financial account information. This information helps identify instances where Canadians hide money in offshore accounts to avoid paying taxes, which is a key concern shared by Senator Downe, the government and indeed all Canadians.

I want Senator Downe and all parliamentarians to know that the government is working hard to study and release information on Canada's tax gap. This is a key part of the CRA's commitment to a fair tax system that meets the needs of all Canadians.

Information collected to assess Canada's tax gap allows the CRA to skilfully target our compliance activities and ultimately improve the integrity of the tax system.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to join this debate.

First off, I want to thank the senator who tabled this bill in the other place for getting it to the House of Commons. I commend him for his hard work and his initiative. I really respect everything he has done over the past few years to fight tax evasion. Measuring the tax gap, the issue at the heart of this bill, is also one of his primary concerns.

As I mentioned earlier in my question, the bill would require data to be provided to the Parliamentary Budget Officer so that he can independently analyze and calculate the tax gap. The tax gap is a measure of the government's annual tax losses relative to the Canadian economy and the global economy. Tax gap estimation is quite complex. The tax gap provides a gauge of how much money the Government of Canada is losing because of its unfair tax system.

Canada's unfair tax system also makes it possible for some taxpayers, especially rich taxpayers, to avoid paying taxes in Canada. These people can afford to hire tax lawyers who charge $500 an hour and who know how to work the system so their clients do not have to contribute to public services and infrastructure in our society. Calculating the tax gap is extremely important, because it tells us whether our efforts are paying off. This government is not calculating the tax gap because it does not mind missing out on several billion dollars every year.

We in the NDP understand the immeasurable losses caused by national and international tax evasion and aggressive tax avoidance. Aggressive tax avoidance also seeks to circumvent our laws, which is another part of the problem. Each transaction in isolation is legal, but when put together, the transactions amount to immoral acts. Tax lawyers are not always the most ethical individuals.

The ultimate goal of calculating the tax gap is to check whether our efforts are paying off. If we were to calculate the tax gap for 2019, for example, and if the government had a plan to address tax evasion, we should be able to see whether any progress has been made in five or ten years.

The biggest problem for the Liberal government is that they do not have any results to show Canadians when it comes to fighting tax evasion. For three years the Minister of National Revenue has been saying over and over again that the Liberal government invested $1 billion in the Canada Revenue Agency to fight tax evasion and that it hired 1,300 auditors.

When people hear that they say that the government is committing a lot of financial and human resources to fighting tax evasion. They also say that such considerable efforts should lead to results, but that is not the case. The government has nothing to show Canadians.

Just this week the Minister of National Revenue announced that searches were conducted in Vancouver last week. That seemed to be the best thing she could announce to Canadians on the tax evasion file. There were three tax scandals in recent years, the Panama papers, the paradise papers, and the Bahamas leaks, but the minister was very proud to announce those searches. She seemed pleased to see that progress was being made on this file even though we are far from seeing charges and even farther from securing convictions.

The government's four-year mandate is coming to an end, and it is still at the search warrant stage, when we should be seeing results. The government may have invested $1 billion and hired 1,300 auditors, but it still has nothing to show Canadians.

To make matters worse, the Liberals will try to make people believe that they have obtained results, as the Minister of National Revenue has already done on several occasions. When we asked her what the results were, she talked on various occasions about 78 convictions. The number varied. Sometimes it was higher and sometimes lower.

When we pressed further and asked her about the convictions in question, we realized that they all had to do with domestic tax evasion. However, there is a rather big difference between domestic and international tax evasion.

When my NDP colleagues and I asked questions about international tax evasion, we were told that there had been convictions. Saying that amounts to misleading Canadians. In fact, the minister was forced to acknowledge that. Her officials had to acknowledge that in committee. When we asked them how many convictions there had been for international tax evasion, they had to admit that there had not been any. There have been no convictions for international tax evasion. That is the Liberal government's track record. That is the reality.

The Liberals may say that they are working on it and moving mountains to tighten the net, but the net is still wide open. The basic problem here is that the tax laws are still too lax, too flexible, too elastic. Taxpayers who can afford to hire tax lawyers are able to avoid paying their fair share and to get off scott-free when they are caught. When CRA investigators are faced with that situation, they can only say to themselves that the tax laws are so lax that they can do nothing about it. That is the crux of the problem. The government does not want to acknowledge it. That is the reason for the lack of results.

If they do not address the root of the problem, hiring 1,300 people and investing $1 billion will not make a difference, because the laws are too lax. They do not want to acknowledge that either. They do not want to deal with tax flexibility, which is the root of the problem.

This is why Bill S-243 is so important. If we can measure the tax gap and monitor any progress, we may finally have some way to see whether the government is making progress on combatting tax evasion. This would also give us a clear picture of international and domestic convictions for tax evasion in a report that would be presented by the agency. The two types could be separated in the agency's public reports. The real problem here is that the minister does not distinguish between the two. That may be because she does not know the difference. We would have to ask her.

The Liberal government is showing a serious lack of transparency, which is why the senator introduced this bill and shepherded it this far. He can see it, as can all of us on this side of the House. Even the Conservatives have woken up, even though they were the ones who fought the former parliamentary budget officer to avoid giving him information. They have woken up and joined us in demanding results and demanding meaningful action on tax evasion.

I will be happy to support this initiative. I hope that my colleagues will join me so that we can shed some light on the Canada Revenue Agency and finally see results over time. This will help us understand whether our efforts are working and change course if we find that our efforts are inadequate. So far, the government's efforts have not been working.

I hope that the government will support this initiative, which would be in line with its claims of wanting transparency and openness. It now has an opportunity to demonstrate transparency and openness at the Canada Revenue Agency.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am glad to be joining this debate in this late evening on a Wednesday. At the outset, I am going to share a few observations about the debate so far on this Senate proposal as well as some observations about things that were said in the House.

First of all, this is a tax matter. We all remember that it was Motion No. 43, a duty of care motion, that was also put forward by the seconder of the bill in the House, the member for Calgary Rocky Ridge. At the time I spoke to it, the Canada Revenue Agency's customer service and the way it treats Canadians who are filing taxes continued to be deplorable, in my opinion. I thank the member for Calgary Rocky Ridge for having sponsored another move toward getting fair treatment for Canadians. I think this is part of it. Understanding the tax gap between what is expected to be collected and what is actually being collected is a very important matter.

Second, it was Senator Percy Downe, from Prince Edward Island, who moved this proposal in the other place. Let it be said that when Conservatives find honest Liberals, we will work with them. We will support their ideas. In fact, it is a Conservative member of Parliament who has brought this Senate proposal to the floor of this House for, I expect and I hope, swift passage.

It is interesting that it is a Senate Liberal, also someone who was kicked out of the Liberal caucus, who is pushing for greater tax fairness and more tax knowledge for fellow Canadians. Perhaps it is something to do with people who speak the truth and are interested in the truth being kicked out of that caucus.

Bill S-243 is about reporting on unpaid income taxes. The bill is quite short, but it provides an opportunity to define the tax gap. I note that at least on one other occasion, members were wondering what we are asking the CRA to do. We are asking it to disclose more information about taxes that remain unpaid. Every single year there is a discrepancy between what the government expects to collect and is able to collect and taxes that remain outstanding. That discrepancy between the two accumulates over time. I know that many Canadians are interested in knowing more about why it is accumulating and who these people are who are not paying these taxes.

I especially like the definition of the tax gap being put forward in proposed subsection 88.1(1), which is an amendment to the Canada Revenue Agency Act, because it is a simple amendment. It is very clear what type of information will be provided to the Parliamentary Budget Officer.

I have been a big believer in legislating more rules for civil servants, the bureaucracy, on how they do their work and report their work, both to Parliament and to the public. We spend far too much time in this House legislating what Canadians can do on an everyday basis, whether it is their hobbies or air travel. In general, we create a lot of rules that businesses, corporations and everyday people have to live up to. There is an expectation that they need to know what the rules are. We spend too little time legislating what the civil service does and the type of work it does on behalf of Canadians.

There is a Yiddish proverb that says, “Prayers go up and blessings come down”. It has been a prayer and a hope of mine that we will see more such private members' bills and more government bills, in fact, that would look after legislating what the civil service does and how it does its work, both in the collection of information and in the disclosure of information.

We see in this particular proposal the following:

The Minister shall provide the Parliamentary Budget Officer with the data on the tax gap collected and compiled under subsection (2) and any additional data that the Parliamentary Budget Officer considers relevant to conducting a further analysis of the tax gap.

That has been an issue in the past for the PBO. Finance Canada and other departments have been unwilling to disclose information to the PBO. I am going to allow the work they do, because often I will send emails to them, sometimes late at night, asking specific questions about budget line items. We saw that when the member for Edmonton West added up different sections of the budget tables, they did not, in fact, add up.

It is thanks to the PBO that parliamentarians such as us are able to do that work. If we have a question and we want to double-check whether our math is correct or whether we understand a concept being advocated by or pushed forward by the government, we can check with the PBO whether it is true. If it is not true, they can then double-check with the departmental officials they have connections with.

When department officials refuse to disclose information being requested from the PBO, it is a great matter of concern to parliamentarians. We rely on the PBO in a lot of ways to provide us technical information and to ensure our calculations are in fact correct. Perhaps if Finance Canada had taken advantage of the PBO's expertise, it would not have had to table a new set of fiscal tables, updating a great deal of them in the past budget document.

However, this is about the tax gap. This would provide Canadians with an ability to understand what it is over time. It is of great interest. The member for Sherbrooke mentioned in his speech that three times there had been major scandals and there had been great interest from everyday Canadians and members of the public. Different transparency and anti-corruption organizations have mentioned that such information would be of value for the public to have.

There is already a lot of information that the government makes public. This particular one, though, is something I have not seen made available on an easy-to-understand basis. The way it is being laid out in the definition of the tax gap, proposed subsection 88.1(1), offers that opportunity for Canadians both to understand what is being calculated and how it is being calculated. From then on, it would be up to parliamentarians to decide what to do with that information. More information from the civil service is always a good thing. At the end of the day, we are all hoping for greater transparency from the CRA, both on what it expects to collect and what it is actually able to collect.

That brings me back to the finance committee, the committee of the House on which I sit. It is looking at Bill S-6, a Madagascar tax treaty. I asked a question of the officials there whether they had any ability in calculating and telling us which corporations in Canada would be affected by that tax treaty and whether an analysis had been done. It was not clear to me from the answers at the time whether it was done.

Prior to Bill S-6 being proposed, a tax gap would have existed, at least in my mind it would have existed, between potential tax planning by certain corporations and individuals who would do business in Madagascar and what would happen after the ratification of Bill S-6. I was told that this information may be collected at some point by the CRA or it may not. That, again, is the tax gap between what may happen if a tax treaty is introduced or not. Aggressive tax planning does happen. It is illegal to do so in jurisdictions that do business with Canada.

Canadians will benefit greatly from the tax gap. It is perfectly reasonable to ask the Canada Revenue Agency to make the calculation. Part of the benefit will be that if it gets into the practice of collecting information and providing it to both parliamentarians and members of the public, it will also force it to start actually collecting that information after the fact. That is of great interest and great benefit. It would allow Canadians and parliamentarians to make access to information requests, to better understand the methods it is using to calculate it and to see the email transmissions among different government officials on the tax gap. It would also help us understand the conviction rate, who is being chased, whether a systemic abuse of the system is going on and whether particular tax treaties with Canada are being abused, which we should perhaps look at again.

All of this publicly available information that we do not have right now should be available right now. I am a parliamentarian who makes a lot of access to information requests and has a lot of Order Paper questions. Therefore, the disclosure of information is important, the calculation in the first place. Too often in this place, the government comes back with a response saying that it does not collect information in that particular way and therefore it cannot answer the question. This Senate proposal, from a Liberal senator, Senator Percy Downe from Prince Edward Island, will do what I have been, like I said before in the Yiddish proverb, praying for, which is more rules on civil servants and bureaucrats, less rules on everyday Canadians and a greater disclosure of information to Canadians and parliamentarians. It is a blessing that is coming down to earth.

I ask all members to heartily support the bill. It is a great proposal and it would provide greater transparency of tax information.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, it is always a pleasure to rise to speak to private members' business, especially when it comes to taxation.

Virtually from day one, this government has taken the taxation issue very seriously. I found the Conservative Party's approach to taxes interesting, and I would like to provide some thoughts on that.

I would like to first acknowledge Senator Percy Downe in the other place who brought this legislation forward. I had the opportunity many years ago to meet Senator Downe at a parliamentary conference. I have deep respect for him and I appreciate many of the fine things he has done over the years.

Let there be no doubt that Canadians are concerned about tax avoidance and tax evasion. Who could blame them? After all, we expect tax fairness, which is why the Prime Minister and our government have made it a high priority.

I would like members to think of what we have been able to accomplish in just over three years. Our very first bill dealt with taxation. The member for Waterloo often talks about Canada's middle class and the importance of the legislation that cut taxes for Canada's middle class.

We talked about a sense of fairness, and that is what the sponsor of the bill brought forward in his comments. At the same time we recognized that the wealthiest 1% of Canadians should pay a bit more. We argued that paying a bit more was their fair share. Our government has put that into place as standard policy, while we look at ways to change our tax laws to ensure a higher sense of tax fairness.

The government's first action was to increase the tax on Canada's wealthiest 1% and at the same time provide a tax decrease for Canada's middle class. This literally put hundreds of millions of dollars into the pocket of Canada's middle class. It affected millions of Canadians in every region of our country.

I will fast forward to budgets. We introduced a budget last week. It shows that our government is continuing its commitment to fight those individuals who are not prepared to pay their fair share.

A couple of years ago, the minister responsible for CRA introduced, through a budget measure, about $450 million. That is a guesstimate. Last budget year, we again brought in well over $400 million. If we combine those two budget allotments, we are getting close to $1 billion, which is a great deal of money. The purpose of that was to ensure that CRA would have additional resources to go after individuals who were trying to avoid paying taxes.

Our government recognizes the importance of tax fairness and has taken specific action to address the issue.

I am pleased to say that it does not stop there. We hear about international taxes and about addressing that issue. In the last three years our government has taken an aggressive approach toward tax treaties.

By having tax treaties, whether it is with Madagascar or other countries, we are better able to address the types of issues that we are talking about tonight.

To me, that signals a very strong message to individuals, whether here in Canada or outside Canada, that there is an expectation that people will pay their fair share of taxes. I would like to think that people following this debate would recognize or at least be aware that this government is committed to ensuring that they will do that.

When we were talking about Bill S-243 and I had the opportunity to ask a question of the member, I made reference to a number of issues and put them on the table. The Conservative Party has voted against many of them. That is somewhat interesting. Conservatives are bringing forward legislation to say that Canadians need to pay their fair share, but when it came time to actually vote on initiatives affecting Canadians today, they voted no. I think that speaks volumes.

A question was posed when we were talking about this specific piece of legislation. It was not I who posed the question, but one of my colleagues from the New Democratic Party, and the question was related to Stephen Harper's tenure as Prime Minister for 10 years. It asked why he did not bring in the type of legislation the Conservative member is bringing in through the Senate today. Ultimately, the member indicated that the fault was not necessarily in him, but in a previous administration.

It is important to take a look at the Conservative Party's record. Canadians will see that the Conservative Party has been consistent. It has been consistent in not dealing with the whole issue of tax fairness. I saw that when I sat in opposition. I saw many initiatives coming from the Stephen Harper regime, but I did not get any sense that they were looking at ways to ensure more tax equity in government policy, nor did I ever see a government back then that was prepared to go after those who try to avoid paying their fair share.

When I posed the question, the Conservatives stood up and said that we have not had many prosecutions. We have had more prosecutions under the Liberal government than under the Conservatives, and it has only been the last couple of years that the government has invested the resources that are necessary. I would suggest that by doing that, the Liberal government is getting more and more people to pay their fair share, which could actually be a good thing. If a prosecution can be avoided when there is an agreement for monies to be paid and there is a fairer sense of taxation, that is ultimately a good thing.

Having said all of that, I think there is some merit for the legislation. I look forward to hearing more debate on this very important issue. I believe it is very important.

One of the things the Prime Minister often talks about is that he wants members of Parliament to listen to what their constituents are saying in their ridings, back home in their communities, and to bring those ideas and thoughts back to the chamber and to the respective caucuses.

This is an important issue to Canadians and, therefore, it is an important issue for this government. Maybe I will get an opportunity at a later time to be able to speak to this very important issue of tax evasion.

[The Deputy Speaker, Conservative, Bruce Stanton]

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from March 18 consideration of the motion, and of the amendment.

Justice and Human Rights

[The Deputy Speaker, Conservative, Bruce Stanton]

When the House last took up the question, the hon. parliamentary secretary to the government House leader was just about to start his 10-minute period for questions and comments, so we will start there.

Are there questions and comments directed to the parliamentary secretary to the government House leader?

Resuming debate, the hon. member for Calgary Shepard.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am so glad I was able to catch your eye this late in the evening to rise to speak about this concurrence report.

What I wanted to do in my initial comments was to mention that I co-seconded the amendment. I know members are probably tired from this later-evening sitting so I will not add too much to the debate. I know a lot has been said on our side already about the wisdom of returning this to committee in order to confirm the independence and autonomy of the director of public prosecutions, as well the appointment to that position of Kathleen Roussel, who made the right decision in the case of the criminal prosecution of SNC-Lavalin, which was confirmed at the time by the former attorney general.

I will mention as well that the law that created the position goes all the way back to 2006, which was Bill C-2. It was created by the Federal Accountability Act. There is a reason we know who lobbies who in this place. It is because the Lobbying Commissioner and the registry were created by that very act as well. The Ethics Commissioner was also created by that act.

Actually, a lot of the accountability mechanisms that now exist in this place, which parliamentarians take advantage of to better understand their responsibilities toward Parliament and the people of Canada, were created in Bill C-2, the Federal Accountability Act, which was passed at the time by a Conservative minority government. It was able to work across the way with the other side for the betterment of the people of Canada, who, after the sponsorship scandal, were demanding greater ethics and accountability from parliamentarians and elected officials.

At the time, that scandal led to the creation of an independent director of public prosecutions whose decisions were to be confirmed by the Attorney General. The Attorney General would not be able to overturn a criminal prosecution and take over a case without gazetting it. I remember being a staff member working for a backbench Conservative member of Parliament at the time. The thinking at the time was that nobody would go through the trouble of trying to overturn a decision by a prosecutor who had decided not to offer a certain deal to the defence and that this would now end all political and criminal interference in public prosecutions.

Little did we know that 12 years later it would in fact happen. It would cost the political futures of two now former cabinet ministers, now former members of the Liberal caucus, and other members who have since then quit sitting on that side. Who can really blame them with everything that has been going on?

I love Yiddish proverbs so I want to share one that applies here: “Before you utter a word you are the master; afterwards you are a fool.”

From statements that have been made publicly from September, October and November to then January and February, we can see the inconsistency of the story on the side of the Liberal government. At first, the Prime Minister said that he knew nothing. In a press conference, he said that what was being reported by The Globe and Mail was absolutely untrue. This was not any digging around that the Conservatives were doing. It was in fact journalists who heard the story, corroborated it and then reported it. At the time, the Prime Minister said that it was absolutely false and there was no truth to it. We know now that statement is completely inaccurate. There is absolutely no basis to have said any of it. We know this now because the independent caucus continues to grow quickly, with former Liberal caucus members now being punted to this side of the House because they are standing up for truth.

There is a deep betrayal of justice on that side of the House in basically shooting the messenger. They have broken trust with Canadians and this is what the amendment to the concurrence report is trying to re-establish by reconfirming the independence and autonomy of the director of public prosecutions. We, on this side of the House, have faith in her work. We know that she can do the job. She made the decision, which was then confirmed by the former attorney general 12 days later. A decision was confirmed and she stuck to her guns. She decided it was the right thing to do.

I hear so much chirping from the other side of the House because they are all looking at the same polls that we are. They are looking at the opinions of Canadians, who are telling pollsters and telling us on Twitter, Instagram and social media that they are tired of this.

Canadians were sold a bill of goods back in 2015. They were told there was going to be real change, a new way of governing the country. In fact, that is completely untrue. It has gone back to the good old days of 2002-2003 and the sponsorship scandal of the 1990s that led to one of the deepest crises in our democracy at that time, which led to the Federal Accountability Act being passed in this place, requiring greater accountability and ethics from our parliamentarians, something that is sorely lacking on that side of the House.

I am pleased to be rising to speak to this matter. I am pleased to be providing my support to this measure by co-seconding the amendment to send this back to committee and to ensure we stand with those parliamentarians who have been punished by their leadership for standing up for the truth and doing the right thing. It is better to put country before party. It is better to stand up for the truth, wherever that leads us.

I just want to remind members again of this Yiddish proverb: “Before you utter a word you are the master; afterwards you’re a fool.” I hope the government sees the light on this, tells the truth, comes clean with Canadians and sends this report back to committee so it can again confirm the independence and autonomy of the director of public prosecutions.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I agree we would assume that all members in this House would have great faith in the director of public prosecutions. To quote this member, he said in his speech that his side of the House has faith in the director of public prosecutions.

However, not that long ago we were forced to sit in this House for roughly 30 hours of voting. The opposition members had the opportunity to pick selectively which votes they were in favour of and opposed to. That member and all members on that side of the House voted to defund the director of public prosecutions.

I am curious if the member can comment. Since he has such great faith in the director, why he would vote in favour of defunding that particular agency?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, on that morning or evening—after 30-plus hours of voting, who can remember?—I remember the government losing a bunch of confidence votes and its members scurried in, trying to make up for the fact they were not in their seats to vote at the time.

Members will know this, because I am stickler for the rules. I like reminding Speakers sitting in the Chair about votes not being counted when members are not sitting and representing their constituents and are not sitting until the very end of the vote to ensure their votes are recorded accurately.

I will take no lessons from that member. Soon he will be sitting on this side of the House, with a far smaller caucus, as part of the opposition, and perhaps he will learn the rules as well.

[The Deputy Speaker, Conservative, Bruce Stanton]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, Conservative, Bruce Stanton]

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?