Finance committee  We prepared a background document for this hearing that sets out where the 96 countries that participated in the global forum stand in terms of agreements. What we've seen since April 2009 is that the vast majority of these 96 countries are now in the category in which they actually have more than 12 agreements.

Finance committee  Measuring the tax gap is prone to conceptual and practical difficulties. A starting point is that even if you could measure it, you would not want to collect every single dollar of outstanding taxes. You would end up with a lot of your constituents complaining to you that Canada Revenue Agency was being too aggressive.

Finance committee  May I just come in for one moment?

Finance committee  One of the questions asked whether you can actually force taxpayers to put on their tax returns whether or not they have offshore accounts. The answer is yes. Many countries do, and they back that up with penalties.

Finance committee  I don't think you can put an exact figure on it, but I think you can confidently say that it is big, that it is growing, and that we need to deal with it.

Finance committee  I do, yes. You can see that the language that was put into the G-20 communiqué was strong language. It emphasized that we want to see progress, and it also said that if we don't see progress, then sanctions will be put in place.

Finance committee  Yes. I think it was the importance of making the linkage in the fight against money laundering, bribery, corruption, terrorist financing, and tax evasion. At the end, all of these illicit activities thrive when you don't have cooperation and don't have much transparency. One of the things governments need to do is to ask themselves whether we can get better cooperation between the tax authorities on the one side and other law enforcement agencies on the other.

Finance committee  It's quite difficult to study the Tax Justice Network, because every month it seems to increase by $50 billion. It started at $50 billion, then it was $250 billion, and the nearest figure I've seen is up around $600 billion. It's a number that is continually moving. We have consciously chosen not to put out such a number, because frankly, I don't think you have the methodology or the data that would enable you to reliably estimate how much we are losing to tax havens.

Finance committee  The OECD project started back in 1998. At that time, I think we had perhaps an oversimplistic approach to the issue of tax havens. It was very much a “name and shame”: you identified a tax haven using the definition I've just described, and then you put it on a list, and then you whacked in sanctions as defensive measures.

Finance committee  I can make a comment on that. As I said earlier, this is a good investment. Look at the United Kingdom. They've put £4 million into better offshore compliance, and they expect a yield of £7 billion. That's a pretty good return. I think the cost-benefit analysis of exchange agreements comes out very much in favour of having these agreements and implementing them.

Finance committee  I think if there's a delay in putting the agreements in place, that is a barrier. I think Canada is a good example. It's taking you too long from the time you sign an agreement to the time an agreement is ratified, and unless the agreement is ratified, you can't use it. There has to be a political will in countries to move from the signing towards the ratification.

Finance committee  Gentlemen, would you like me to answer the question?

Finance committee  Let me make a comment. Yes, there is still plenty of offshore non-compliance taking place, but the thing one has to recognize is that many of these agreements are very recent--in fact, in Canada's case the majority of the agreements that you've signed are still not ratified--so it is far too early to say how effective these particular exchange of information agreements will be.

Finance committee  I think there are in some countries. Here in France, France has encouraged its banks in uncooperative tax havens—havens, in fact, that are not playing the game—to exit from those jurisdictions. Other countries are putting in legislation for stronger control of foreign corporations, and there are also countries that are putting in voluntary compliance programs that take advantage of the new, more transparent environment to encourage people to come forward and declare any—

Finance committee  That's a good point. In fact, there are a number of countries that, like the United Kingdom, have put a burden on the advisers, so that you can prosecute not just the people who are evading taxes but also the people who have advised them to do that. Also, what some countries have done is that if you have a transaction with a tax haven, they will not let you deduct certain expenses--that's quite a powerful tool--or they will reverse the burden of proof.