Canada's Original Think Tank

Transparency of Tax System

Transparency of Tax System

Transparency of Tax System

Hon. Percy E. Downe: My question is for the government leader in the Senate, Senator Harder.

On October 20, the government of the United Kingdom announced their tax gap which was 36 billion British pounds. Canada is one of the few countries that has refused to measure the tax gap. The Canada Revenue Agency has resisted. We know that the tax gap measures two things: the difference between what should be collected and what is actually collected, but it also shows how effective the revenue agency is.

CRA continues to hide behind a wall of secrecy and is refusing to explain to Canadians how efficient they are or are not.

When will the government order the CRA to measure the tax gap?

Hon. Peter Harder (Government Representative in the Senate): Again, I thank the honourable senator for his question. This is an issue that he has raised in the chamber before and which he continues to champion. I’m happy that he was able to support the increased allocation to the CRA by this government to ensure that there was a strengthened capacity at CRA to go after tax avoidance.

With respect to the specificity of his question, I will make inquiries and report back.

Senator Downe: There is no question the capacity has been addressed; the competence, however, is another question. Many Canadians have serious concerns about the management style of the Canada Revenue Agency.

For example, there is a culture of secrecy: refusing to give the Parliamentary Budget Officer the information to estimate the tax gap; refusing to tell Canadians what they are doing; refusing to tell parliamentarians and hiding behind the wall of secrecy.

I noticed yesterday in the Australian Parliament, parliamentarians were given a full update by the counterpart to our revenue agency on the leak from the Panama Papers. Fourteen hundred Australians were identified with 200 more names to come. They indicated how much money was actually recovered.

The CRA tells none of this to Canadians. Nobody knows what has happened to the Panama Papers. Did people get away with cheating on taxes or not? Did the government recover any money? No.

We hear constantly from the CRA how much they have identified as opposed to how much they have collected. Australia is very different.

Colleagues may be interested to know as well that at that Australian meeting yesterday, there is a fresh leak coming from a law firm called Appleby, which I believe is based in Bermuda. There will be information forthcoming in the next few weeks. We can assume, like all other cases, that there will be Canadians involved, but unlike other countries, unless the government forces the CRA to break down that wall of secrecy to be more transparent, Canadians will never know what has happened. This double standard is most unfortunate.

If you cheat on your taxes in Canada, you are pursued and caught. The CRA does an outstanding job with domestic tax evasion. For overseas tax evasion, they are completely incompetent, regardless of the resources. For years, I thought it was lack of resources. There is something seriously wrong with that agency.

Canadians need to know that the tax system is fair and we are all treated fairly. Will the government intervene at the CRA? Will they call in outside experts to look at what is the root of the problem?

Senator Harder: Again, I thank the honourable senator for both his preamble and question. Let me assure the honourable senator that I will take up that question with the ministers responsible.