Mr. Speaker, I am delighted to stand today and speak to Motion No. 485, prepared by my colleague from Rivière-du-Nord, in the spirit of getting the government to take tax havens seriously. The specific motion is, however, narrower than that. It fundamentally asks that the government study and measure Canadian tax losses to international tax havens and tax evasion in order to determine what is called the tax gap, the amount of money we should be collecting but are not.
It is a very timely motion as we are in front of the tax clock. In the next short while Canadians must submit their tax returns, and I am concerned that my fellow Canadians pay their fair share. Unfortunately, that is not the case. Unfortunately, many Canadians—large corporations, trusts, and wealthy Canadians—are sending their money offshore to avoid the incidence of tax in our country.
The motion simply asks the Conservatives to do what our allies in other countries of the world already do; namely, put their hands around the size of the problem. Just what is the tax gap? It has often been said that, if we do not measure something, we will not be able to effectively manage it. That is what we are asking here.
The government will ask why it should bother, since it is not going to give exact information as to how many billions of dollars it is losing every year, but in fact Sweden, Australia, the United States, and the United Kingdom are all doing that and by now there are fairly good economic measures, fairly good techniques, to do exactly this, which is to measure the tax gap.
That is the first step of getting the government to take the tax havens problem seriously.
In my riding, I was talking someone who own a small coffee shop. He told me his effective tax rate is much higher than the big Starbucks down at the corner. Why is that? It is because Starbucks is able to arrange its affairs by use of international tax havens to really pay an effective very low rate of tax. Indeed it was caught on that in England, where demonstrations led it to make a voluntary tax payment in the tens of millions of pounds, because it recognized it needs a social licence to do business. That is great when they are caught, but what about the small coffee shop owner in my riding who cannot compete because his rate of tax is so much higher than that of a company that can use these tax havens?
We asked the minister to do just that, to measure the tax gap. I wrote to the former minister on March 8, 2013, asking that he please estimate the tax gap the way our allies have done. I got no response. However, apparently tens of trillions of dollars worldwide are being lost to tax havens. It is estimated that somewhere between $5 billion and $8 billion a year may be lost to tax havens in this country; and who knows, if the government will not measure it? Think of what we could do with that money if the government were to take this problem seriously. Think about what we could do with hospitals, infrastructure, and the like in our country.
That is why this is not a theoretical issue. It is an intensely practical and immediate issue and one that our allies are doing a lot better on than we are. I think of Mr. Cameron in the United Kingdom who at least appears to be taking action, and certainly in the United States there are new efforts under way as well.
The government is simply taking baby steps to address the issues we are talking about today; but the amount of money, as I said, is enormous. Also enormous is the amount of cuts that the government is making to the Canada Revenue Agency. I hear so many people say they cannot do their jobs because so many of them have been dismissed. The Conservatives have cut their budgets so dramatically and expect Canadians to take them at their word when they say they are getting tough on tax havens, tough on those who evade their taxes. It is simply not so. The number of people l have talked to from that agency, who shake their heads, bear witness to that.
The former parliamentary budget officer was asked to measure the tax gap. Essentially it went like this. Since the government will not do it, since the CRA refuses to do it, why does the parliamentary budget officer not do it? He said he would love to, no problem; all he would need is the data from the government to do the job. He asked and asked, but of course nothing happened.
He was not even given the data to do the work that our allies in other countries are beginning to do so effectively.
Therefore, the government's rhetoric on this issue is not matched by reality. It is not giving the CRA the resources to do the job. It is not hiring the experts required to go after the very sophisticated people who use these tax havens inappropriately. It will not even tell us the size of the problem, which is what this motion is all about.
It is shocking to report that in 2011, 24%—almost a quarter—of Canadian investment overseas went to tax havens, twelve tax havens, the top five of which are Barbados, Cayman Islands, Ireland, Luxembourg, and Bermuda; $130 billion, in one year alone. At the same time, the government cut the CRA so it cannot even do its job. We think Canadians deserve to know how much taxes are being evaded through the use of these tax havens. The government will not measure it. That is the point of this first step of taking this problem seriously.
The government has no trouble spending $550 million on advertising—often for programs that have not even been passed—but it has cut $250 million from the Canada Revenue Agency, obviously hindering the ability of that agency to do what is proposed. We think, instead of cutting employees from the compliance and enforcement divisions of the Canada Revenue Agency, that the Conservatives should begin investing additional resources to recover lost revenue. Maybe the way to get their attention is to use the word “invest”, because the rate of return if they did this would be enormous. We have seen that in many of the countries I have mentioned. I just wish the government would likewise wake up and smell the coffee.
The New Democratic Party made a number of recommendations in the finance committee, of which I am proud to be a member, when studying tax havens, the first of which was once again sadly not accepted by the government. This was in the supplementary report. It states:
That the federal government study and measure, to the greatest accuracy possible, Canadian tax losses to international tax havens and tax evasion, in order to the determine the Canadian federal “tax gap”.
That is exactly what this motion would do. It is once again asking that the government get its hands around this very serious problem.
We also asked, among other things, that the government go after those who enable tax evasion, including accountants, lawyers, and other professionals. We have seen egregious examples where people have come from tax havens—Switzerland comes to mind, where bank secrecy has been the rule—to the United States and Canada and demonstrated to people, advised them, how to avoid paying their fair share of taxes, how to cheat the Canadian and American tax systems. It happened in Denmark recently. It is happening in a number of countries.
It seems obvious to me that we should make it harder for those who enable that to occur. We should bring the full force of the law down on those who do not pay their fair share and on those who enable people to not pay their fair share. That is another part of the problem that definitely needs to be addressed.
We believe it is absolutely essential that this motion be passed. We hope the government will see fit to join other countries like, as I have said, the United Kingdom, France, Sweden, and Australia, all of which have taken this very first step, to get our hands around and measure the problem so we can begin to give it the resources and expertise needed to take this issue seriously.
As we fill out our taxes at this time of year, I hope all Canadians will urge their government to do the right thing and stop this tax haven abuse once and for all.