Canada's Original Think Tank

Question Period: Overseas Tax Evasion

Question Period: Overseas Tax Evasion

Question Period: Overseas Tax Evasion

Hon. Percy E. Downe: 

Honourable senators, my question is for the Leader of the Government in the Senate. We all know the Canada Revenue Agency does an outstanding job on domestic tax evasion. If you are trying to cheat your taxes and you have your money in Canada, it is highly likely you will be caught, charged and convicted. Just go to the website and you will see examples of that.

However, they do a terrible job on overseas tax evasion. We now know that it has been almost three years — April 2016 — since the Panama papers were released. We asked the Canada Revenue Agency for some information on how they are doing three years later. There are over 800 Canadians who had accounts there and the CRA advises us that over $9 million is owing in penalties and unpaid taxes. Therefore, some of the people with accounts there were cheating on their taxes. We asked them how many people have been convicted or charged. Absolutely none.

We all know, colleagues, how the CRA has been caught misleading Canadians on call centres, disability tax credits, basically trying to deceive Canadians in some of the work they are doing. When you ask the CRA how much money has been collected from those Panama papers, here is the answer: They have gone down a new route. They have gone to the route of gobbledygook. How much money has been collected is the question. The answer is that the CRA does not track payments against specific accounts adjustments like audits as its system applies payments to a taxpayer’s cumulative outstanding balance by tax year, which can represent multiple audits of different types, voluntary payments and other adjustments.

The real answer, colleagues, is they haven’t collected a cent. Why does the government allow this incompetence to continue at the Canada Revenue Agency on overseas tax evasion?

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Hon. Peter Harder (Government Representative in the Senate): I thank the honourable senator for his question. It gives me the opportunity to report to this chamber the consequences of the investments that the government, with the approval of Parliament, has made to the CRA.

Colleagues will know that over a billion dollars has been added to the CRA’s capacity to ensure compliance, particularly in offshore accounts. I can specifically report, with regard to the Panama Papers, that 894 Canadians were identified, 525 files were identified for audit, 225 audits are currently underway and 66 audits are completed. Twelve of those have led to reassessments worth $9.1 billion. I think you can say your money is well invested.

Senator Downe: Thank you for that. Of course, not a cent has been collected.

As for the $1 billion announced by the government, we all know governments announce large sums of money many years forward. As of the end of 2017, the government had spent over $107 million of that. Little has been spent so far, but compare it to what other countries are doing.

Everybody got the Panama Papers at the same time. The Germans have recovered over 140 million euros in less than three years. The Australians have collected over $26 million back to the treasury, and they have identified a much larger sum they are pursuing. People have been charged and convicted in other countries.

Why does the government continue to allow this double standard in Canada? If you can afford to hire lawyers and accountants and hide your money overseas, the government doesn’t pursue you with any vigour. These Panama Papers were given to the Government of Canada. If you try domestic tax evasion, you are caught, charged and convicted. Why the double standard in our justice system?

Senator Harder: I thank the honourable senator for his question. I would suggest there is no double standard. There are levels of complexity involved with respect to the Panama Papers and the files that have been commenced, but that hasn’t diminished the resolve of the government to pursue those who are outstanding in their compliance and to do so vigorously. I will bring to the attention of the CRA the comments and views of the honourable senator, and I assure him there was some applause to his concerns.