Canada's Original Think Tank

Tax Avoidance

Tax Avoidance

Tax Avoidance

Hon. Serge Joyal: 

On June 28, last summer, less than five years ago, the Canada Revenue Agency released a 72-page report, revealing for the first time that the government loses up to $3 billion a year of tax revenue from Canadians who hide their income in tax havens, leaving the average Joe and Jane to pay the major burden of tax in Canada.

The same study also revealed that the government loses a total of “$17 billion each year through tax evasion and tax avoidance.”

My colleague raised to you the problem of the deficit. You could solve the deficit of Canada simply by recovering the money that is hidden in tax havens and through tax avoidance.

Why is the government so slow and sometimes so indifferent in fighting tax evasion and tax avoidance in Canada, giving us a break, the middle class, from paying up to the last dime?

Hon. Bill Morneau, P.C., M.P., Minister of Finance: Thank you for the question. It may be the case that previous governments were not looking at this, but it certainly isn’t the case with this government. We’ve put more than $1 billion into the Canada Revenue Agency in order to focus on ways we can assure we are getting the appropriate tax receipts we should be getting.

We’ve also been working together with international organizations, mainly through the OECD, to ensure that we have mechanisms to go after exactly what you’re talking about. We signed on to the Common Reporting Standards so we can actually have an approach to seeing bank accounts abroad. We’re working to make sure we have beneficial ownership around corporations in our country so we can actually penetrate what is going on within corporations.

It is hard work. It’s important to get the mechanisms in place to actually do this work. We’re seeing positive results. I can tell you that as we’ve looked at our budget expenditures and at putting money into the Canada Revenue Agency, there has been a payback in putting that money there, a payback in terms of increased receipts that we’re seeing from those people that might not have been paying their appropriate amount of tax or paying it on a timely basis.

We will continue to focus on this area. We think it’s critically important. If you have advice on places or ways we can do it more effectively, we will be open to considering that advice most certainly.