I want to thank the committee members for having me here today.
This is my first presentation of this nature before a parliamentary committee. Please bear with me.
I want to thank you, Mr. Chair, for allowing me to speak about Bill . This bill will be an important new tool in the government's arsenal to combat aggressive international tax avoidance. When some Canadians choose not to pay their fair share of taxes, all of us are short-changed. It means less money for important social programs such as the Canada child benefit. It means less money for vital infrastructure such as roads, railways, ports and airports, which help us move people and goods to where they need to go safely and on time. It means less money to protect our communities and less money for health care.
Our government believes that all Canadians deserve to share in the fruits of a strong and vibrant economy. That is why our government takes seriously its responsibility to ensure that Canada's tax system is fair and efficient. Tax fairness is a cornerstone of our plan to grow a stronger middle class and create economic growth. In each of our government's last three budgets we've introduced measures to enhance the integrity of Canada's tax system and give Canadians greater confidence that the system is fair for everyone.
Thanks to these investments, the Canada Revenue Agency is armed with better tools and approaches, which are leading to better results. These tools help the CRA collect valuable information and allow its agents to work smarter and more effectively to ensure all Canadians follow the rules.
For example, Canada continues to be a member of the expanded Joint International Taskforce on Shared Intelligence and Collaboration. This network of 38 countries works closely and actively with other tax administrations to coordinate tax compliance activities across the spectrum of international tax risks. This expertise has allowed the CRA to participate and lead JITSIC expert working groups, including in the development of a strategy to identify and stop promoters of abusive tax schemes.
Canada has also taken steps to coordinate its criminal investigation by joining Australia, the Netherlands, the United Kingdom and the United States in the joint chiefs of global tax enforcement—the J5 group. The J5 will share criminal investigation strategies, intelligence and conduct joint operations in the fight against those who commit, promote and enable international tax crimes, money laundering and cybercrimes.
The CRA has also been automatically accessing all international electronic funds transfers of more than $10,000 entering or leaving the country. As of March 31, 2018, teams have analyzed more than 187,000 of these transactions, amounting to more than $177 billion related to eight jurisdictions or financial institutions of concern. Reviewing these transfers helps identify transactions for which taxes should potentially have been paid and better assess the risk of individuals and businesses.
Through these efforts, Canada is taking concrete measures to secure tax fairness for Canadians. Our government will continue to work to maintain and improve our enforcement of tax compliance so that we can have a society that works not only for a select few, but for all Canadians.
Mr. Chair, we're also taking important measures to counter third parties that promote the tax avoidance scheme. In the last fiscal year, administrative penalties amounting to almost $48 million were imposed on the third parties. As a result of the implementation of the common reporting standard, we're also gaining easier access to information on Canadians' overseas bank accounts. This new system will make it possible for Canada and over 100 other countries to exchange financial account information. This information will help us identify instances where Canadians hide money in offshore accounts to avoid paying taxes.
We've also expanded our specialist audit teams who focus on high net worth taxpayers. These teams are comprised of approximately 250 auditors responsible for scrutinizing high income earners and more than 800 high net worth individuals and their associated corporate structures.
In addition, in December 2017, the and his provincial and territorial counterparts committed to ensuring that Canadian authorities know the beneficial owners of corporations in Canada and better align the ownership and corporate requirements of the different administrations.
As a result of this agreement, through the most recent budget implementation bill, we amended the Canada Business Corporations Act to require federally incorporated corporations to maintain a register of individuals with significant control over the corporation.
Budget 2018 also proposed enhanced income tax reporting requirements for certain trusts to improve the availability of beneficial ownership information. This type of information will help Canadian authorities take measures to counter international tax avoidance or criminal activity, such as tax evasion and money laundering.
The bill that we're discussing today builds on our government's previous measures.
Bill would allow Canada to better counter a practice known as base erosion and profit shifting, or BEPS. BEPS refers to tax avoidance strategies in which businesses and wealthy individuals use gaps and mismatches in tax rules to avoid tax or to shift profits to low tax or no tax jurisdictions. These strategies make it possible for businesses and wealthy individuals to avoid paying their fair and full share of taxes. This means less money to fund essential services that people depend on.
We've worked hard to counter this loss of tax revenue. In particular, I want to highlight our work with our international partners on this front. The OECD and G20 member countries collaborated to identify a number of instances in which the terms of current tax treaties are vulnerable to potential abuse. These organizations then developed measures that countries could incorporate into their tax treaties to address these vulnerabilities.
The fact that it would take an extraordinary amount of time to renegotiate existing tax treaties required a new approach. That new approach is the multilateral convention contained in this bill, otherwise known as the multilateral instrument, or MLI. This instrument is the product of a global initiative involving the work of more than 100 countries and jurisdictions, including Canada. The purpose of the multilateral instrument is to allow participating jurisdictions to adopt the OECD and G20 measures to combat BEPS without having to separately renegotiate each of their tax treaties. By implementing the MLI, the government would be taking steps to protect the integrity of our tax system and to guard against the abuse of our tax treaties.
Moreover, the implementation of the MLI would demonstrate Canada's willingness, in collaboration with our treaty partners, to take coordinated action to combat international tax avoidance.
Mr. Chair, I'll finish by stating that the Canadian economy is well positioned for future growth. Canadians have every reason to be confident in their ability to compete. However, it's always possible to do more. The government remains committed to investing in the middle class and in the things that matter the most to the middle class. These things include good, well-paid jobs; strong communities; environmental protection; and better opportunities for future generations.
One of the first things we did was to ask the wealthiest 1% to pay a little more so we could cut taxes for the middle class.
We're implementing our plan to make all communities stronger and more resilient, in particular through our significant investments in infrastructure across the country. We've approved more than 30,000 infrastructure projects since 2016 as part of the investing in Canada plan. Most of the projects are under way and are currently creating good jobs for the middle class.
We've also introduced the Canada child benefit, which is giving nine out of 10 Canadian families more money to provide for their children. To ensure that the Canada child benefit keeps pace with the cost of living and continues to deliver effective support to those who need it, our government indexed the Canada child benefit as of July 2018, a full two years ahead of schedule.
A typical middle-class family of four is receiving, on average, about $2,000 more each year as a result of the middle-class tax cuts and the Canada child benefit when you compare that to 2015.
When we add the impact of measures such as the Canada child benefit, the new and more generous Canada workers benefit implemented by our government, and our increased support for seniors, we're on track to help lift approximately 650,000 Canadians out of poverty. I think that all Canadians can be very proud of this result. These concrete and significant measures have improved the lives of Canadians and the economy across the country.
We know that our plan is working. As a result of the hard work of Canadians, over 800,000 jobs have been created since 2015. The unemployment rate is currently the lowest in over 40 years, and we have one of the fastest-growing economies in the G7.
We're committed to building an economy that works for everyone, where every person has a real and fair chance at success. To continue on that trajectory of growth, Canada's economic health needs everyone to pay their fair share of taxes. The legislation before us gets Canada closer to meeting that goal. I encourage all members of the committee to support it accordingly.
As this work today includes a focus on the Treasury Board Secretariat's supplementary and interim estimates for the Department of Finance, I would be happy to take any questions, with the department officials, that the members might have about these or the government's plans to improve tax fairness.
Thank you very much for your attention.
Welcome, everyone. It's great to see everybody.
I want to welcome Mr. Lightbound, the parliamentary secretary.
It's great to have you here today.
I'll focus my comments and questions on Bill , this multilateral convention. I think it speaks to two things our government has put forward: tax fairness and tax simplification.
When I think about tax fairness for the residents and the entrepreneurs of my riding of Vaughan—Woodbridge, I think about the tax cut on the middle-income tax bracket that has benefited nine million Canadians. It's about a $20-billion tax cut over five years, which has helped grow our economy, strengthen the middle class and has helped those working hard to join the middle class.
I think about our small business tax cut now at 9% which, for firms earning up to $500,000 on the accounting standard, is about $7,500 per year in savings that they can invest in their businesses.
I think of the nearly 13,000 small businesses in the city of Vaughan that employ over 200,000 workers who will benefit from the small business tax cut, or if they're too large, they'll stay at the corporate income tax rate, which is competitive worldwide. But they'll also benefit from our accelerated investment instrument that we introduced in the fall economic statement, which now, in terms of tax fairness, and also tax competitiveness, means that we now have a lower marginal effective tax rate on new investment than the United States, by 4%. What does this mean for Canadians and the residents of my riding of Vaughan—Woodbridge? It means that over 850,000 new jobs have been created in Canada since October 2015, the majority full time, the majority private sector, which is near and dear to my heart after 23 years in the private sector.
I think we're on the right path. For background, I sat on the Accounting Standards Board User Advisory Council for a number of years. I used accounting statements for many years as an analyst both on Bay Street and Wall Street, but as a kid I worked at McDonald's and grew up taking the bus as many others did. I look at Bill and I say our government continues to be on the right track in adopting base erosion and profit shifting and this multilateral convention.
I could continue speaking about the number of great things our government has done, but now I'll ask my first question.
I hear some chirping from the Conservatives, which I guess I'm used to sometimes.
I will ask my first question in reference to when the implementation date is of Bill . Second, how does this instrument prevent treaty abuse?