Canada's Original Think Tank

National Revenue — Lichtenstein—Offshore Tax Havens—Tax Recovery

National Revenue — Lichtenstein—Offshore Tax Havens—Tax Recovery

National Revenue — Lichtenstein—Offshore Tax Havens—Tax Recovery

Hon. Percy E. Downe: 

Honourable senators, I would like to follow up with Senator Harder to see if he can get some answers from the Canada Revenue Agency about overseas tax evasion. I notice that the department continues with a line about how hard they are working. In 2009, the Minister of National Revenue said:

People realized that it’s a question of time before we get them. . . . I tell them, “We’ll get you, we’ll find you.”

Around that very same time, we had the first of many tax leaks, and that was from Liechtenstein, where 106 Canadians had accounts. There was over $100 million in those accounts, and the information was given to the Government of Canada by the Government of Germany. The Government of Canada took no initiative. The Government of Germany got the list of everyone who had accounts in that bank and shared it with countries all around the world.

We have now found out that, unlike other countries that immediately swung into action when they received information — such as people who were charged, convicted and paid fines — in Canada, not one person was charged or convicted. Nevertheless, the Canada Revenue Agency identified a large sum of money owing to the Canadian treasury. The assumption one could reasonably assume was some of those people were hiding their money overseas to avoid paying taxes.

I’m just wondering if you could tell us two things. How much money did the Canada Revenue Agency collect? How much did they identify was owing from Liechtenstein? I understand there is a major discrepancy between the two.

Hon. Peter Harder (Government Representative in the Senate): Again, I thank the honourable senator for his question and attention to this issue. I will endeavour to find out the specific answers.

But I would remind the honourable senator, as I reported the other day, as a result of the leaks and attention being brought to the offshore and international aspects of tax evasion, the CRA completed more than 990 audits, and more than 42 criminal investigations related to offshore financial structures are under way as of the end of September of this year.

Senator Downe: Thank you. We look forward to finding out if there are any convictions because in Liechtenstein, as I mentioned, millions of dollars were identified, not one Canadian was charged and obviously no one was convicted. No one was charged, and they recovered very little of the money.

Unlike Australia, for example. Immediately after receiving the same information, Australia formed a cross-government, seven-department committee; identified their target; advised Australians how much they intended to recover, a target they exceeded; and advised Australians how many were charged. And, of course, everyone saw the convictions because they were public.

The Australians tell me that that served two purposes: They recovered more money than they intended, and the people who were thinking of moving the money overseas lost interest when they saw their friends and neighbours going to jail. None of that happened in Canada.

Two years after Liechtenstein, we had another leak from one bank in Switzerland. This is even more interesting, colleagues, because the information was then obtained by the Government of France, and to show the initiative of the Government of Canada and the Canada Revenue Agency, they never asked for the information. The Germans in Liechtenstein gave the information to Canada. The French sent a note to Canada, and we had this in writing in information tables in the Senate to one of the questions asking the Canadian government to ask for the list of names.

The Minister of National Revenue then went to France and asked the French for the names and got the names. There were over 1,700 Canadians in that bank in Switzerland.

I wonder if you could find out how many of them were charged, if any, how much money was identified as owing and how much was actually collected, none of which the Canada Revenue Agency would disclose because they hide now behind secrecy law given the negative media coverage they got on Liechtenstein.

Some Hon. Senators: Hear, hear.

Senator Harder: I take it the applause is for the question, not the answer.

Some Hon. Senators: Hear, hear.

Senator Harder: Senator, I will be happy to undertake to find out the answer to your questions.