Interventions in Committee
 
 
 
RSS feed based on search criteria Export search results - CSV (plain text) Export search results - XML
Add search criteria
View Wayne Easter Profile
Lib. (PE)
View Wayne Easter Profile
2019-06-20 11:00
Pursuant to a motion at committee and Standing Order 108(2), the committee will study the report of the Parliamentary Budget Officer on the tax gap.
We have with us the Parliamentary Budget Officer, Mr. Giroux; Mr. Mahabir, Director of Policy; and Mr. Bernier, Financial Adviser and Analyst.
Just for your information, we only have until about 10 minutes to 12:00. A member of Parliament, Mr. Warawa, has passed away. There's going to be a tribute in the House at 12:00, so we'll have to be there for that. My apologies for cutting it short.
I believe, Mr. Giroux, you have an opening statement.
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2019-06-20 11:01
Yes. Good morning, Mr. Chair, vice-chairs and members of the committee. I don't know if I should say “Good morning” or “Good afternoon”, but I'll stick with “Good morning”.
Thank you for the invitation to appear before you today to discuss our latest report, “Preliminary Findings on International Taxation”, which was published earlier today.
Today I'm joined by Mark Mahabir and Govindadeva Bernier, who will help in responding to your questions.
Our report presents PBO findings on international taxation. This report stems from the initial request of one of your colleagues in the other House, Senator Downe, in 2012. Following this request, PBO pursued its efforts to estimate the tax gap.
As you may know, the tax gap is the difference between the amount of tax that would be paid if all tax obligations were fully met in all instances and the amount of tax that's actually collected by the tax administration authority.
Part of the tax gap can be attributed to unintentional actions, such as errors, ignorance of relevant tax rules, or inability to comply. It can also arise from intentional actions, such as tax evasion or failure to pay taxes. One part of the tax gap that is not often measured, because of the difficulty of estimating it properly, is that attributed to tax avoidance, which is legal but contravenes the objective and spirit of the law.
Our report examines financial flows between corporations in other countries and those in Canada. These flows and transactions can reduce taxable income in Canada by shifting income and profits to certain jurisdictions, thus reducing the amount of taxes paid by corporations in Canada.
The report provides the magnitude of financial flows and transactions involving jurisdictions that are offshore financial centres, but does not quantify the amount of taxes that could be collected if such practices of profit-shifting were no longer permitted. For example, in 2016 there was a net outflow of funds from Canada of $200 billion to offshore financial centres. Similarly, the total value of all revenue from and expenses to those same jurisdictions by Canadian corporations was $996 billion. If just a small proportion of such transfers and transactions were used to reduce taxable income in Canada, the amount of tax revenue that could be collected would be in the billions of dollars.
Finally, we also examined financial metrics for large multinational corporations with operations in Canada. For example, when total earnings before taxes and revenues were attributed to Canada, based on Canada's GDP relative to the GDPs of the countries in which those multinational companies operate, the attributed revenues and earnings were higher than those reported on Canadian tax returns by those corporations. This suggests that earnings reported in Canada are not commensurate with the economic activity of those corporations in Canada.
Mark, Govindadeva and I would be pleased to respond to any questions you may have regarding our preliminary findings on the international taxation report or other PBO analyses. Thank you.
View Wayne Easter Profile
Lib. (PE)
View Wayne Easter Profile
2019-06-20 11:05
Thank you very much, Mr. Giroux.
We will go to seven-minute rounds. If we stick to our time frame, we can do rounds of seven and five minutes, and one three-minute round after that.
Ms. Rudd.
View Kim Rudd Profile
Lib. (ON)
Thank you for coming. I know time is tight these days. We really appreciate your coming. I have two questions.
Certainly I and many of us have had the pleasure of reading a number of your reports, and your predictions are pretty accurate. The details in those reports help us make wise decisions. In your report, you talk about 2014 and the tax gap and the underground economy. The numbers tell one story.
I have two questions. I wonder if you could quickly just tell us how you see the underground economy now compared with where it was 20 years ago and in 2014, and where you see the challenges that lie ahead. I'll ask that first one, and then I'll quickly come back to the second one. Thank you.
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2019-06-20 11:06
Okay. I'll answer that first question quickly.
The scope of the report today was to look at international taxation of corporations. We did not look at the underground economy now or 20 years ago. That said, based on my previous experience when I was in the public service, the underground economy is inherently very difficult to measure—people don't want to be found, obviously—but with the advent of new technologies and the shift to more electronic payments as opposed to cash transactions, one can reasonably assume that the underground economy is not necessarily more prevalent than it was 20 years ago, for that very reason. You now see more and more businesses accepting electronic transactions only, and not cash anymore. You see that among individuals as well. It's not uncommon for acquaintances and friends of ours to have only plastic in their wallets.
For that reason, one would lean towards believing that the underground economy is not necessarily more prevalent, but we have not done any study on that. It's more of an intuition than based necessarily on hard evidence.
View Kim Rudd Profile
Lib. (ON)
Your office also made some projections tied to climate plans. You did confirm in your report that eight out of 10 Canadians are better off under our plan. I have two questions for you. Have you considered evaluating the Conservative pamphlet that came out yesterday? Have they asked, or are you thinking about putting some numbers to that for comparison's sake for Canadians?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2019-06-20 11:08
We did indeed confirm in a report tabled in late April, if I'm not mistaken, that the government's plan to return the proceeds from the price on carbon would indeed benefit the vast majority of households. So 80% of households will be better off in the four provinces that are currently subject to the backstop.
With respect to the climate change plan unveiled yesterday by the Conservative leader, the Leader of the Opposition, we have obviously not had time to look at it closely. If the Conservative Party asks us to cost any of the components of that plan under our new mandate to cost electoral platform commitments, we would be happy to do so.
View Kim Rudd Profile
Lib. (ON)
Thank you very much. I appreciate that.
View Tom Kmiec Profile
CPC (AB)
View Tom Kmiec Profile
2019-06-20 11:09
Thank you, Mr. Chair, and also for shortening the meeting so that we can give our final statements at the passing of Mark Warawa.
Mr. Giroux, thank you very much for coming in. I know we've met many times before. You and your staff do great work, and I really appreciate all the effort that goes into it. In a fit of cross-party co-operation, though, I will pass my time to my NDP colleagues so they can ask questions.
View Wayne Easter Profile
Lib. (PE)
View Wayne Easter Profile
2019-06-20 11:09
Okay.
Mr. Julian or Mr. Dusseault.
View Pierre-Luc Dusseault Profile
NDP (QC)
Mr. Chair, I first want to thank Mr. Giroux and his colleagues for their work.
I know that you've been working on this issue for several years and that, even though you had other data sources, it wasn't very easy to enlist the co-operation of the Canada Revenue Agency to access the data that you used to prepare this report.
My first question concerns electronic funds transfers. You addressed international electronic funds transfers and transactions between affiliates or related companies. However, from what I can see, for the European Union's black and grey list countries alone, electronic funds transfers total $628 billion.
Can you give us an idea of the countries on these lists and the value of the $628 billion in electronic funds transfers between Canada and these countries and between these countries and Canada in relation to the size of the countries' GDP?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2019-06-20 11:10
For these detailed questions, I'll turn to Mr. Mahabir and Mr. Bernier, who can provide a list of these countries. I'd say that the scale of the electronic funds transfers to these countries is disproportionate to the economic activity in these countries or to Canada's economic ties with them. This suggests that the transactions are more than simply economic transactions for tangible property. These transfers are probably justified by tax matters.
With regard to the countries on the list, Mr. Bernier can give you some examples.
Results: 1 - 15 of 43015 | Page: 1 of 2868

1
2
3
4
5
6
7
8
9
10
>
>|