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Results: 46 - 60 of 174
Serge Bilodeau
View Serge Bilodeau Profile
Serge Bilodeau
2021-06-17 17:25
No, I don't have that information.
View Peter Julian Profile
NDP (BC)
Thank you, Mr. Chair.
Mr. Bilodeau, I am tempted to ask you a question about the victims, like Janet Watson, who appeared before our committee. She lost all her life savings because of these strategies.
But I will stick to questions about Parrhesia.
Two very troubling questions emerge from Ms. Iacovelli's testimony.
First, Parrhesia, which has links to the sword companies, was registered as the result of a document faxed from the offices of KPMG in Montreal.
Were you aware of the existence of Parrhesia? Was it discussed in the offices in Montreal? Do you believe that it is one of the issues that could have been discussed by your famous risk management committee?
Then, Ms. Iacovelli clearly stated that the services of those companies were not provided after 2003. However, we discovered that Pannhesia was dissolved on May 24, 2021, just a few weeks ago, and right after the revelations on Enquête and The Fifth Estate, programs on Radio‑Canada and CBC respectively.
Were you aware that Parrhesia existed until that date? How do you explain that Parrhesia was in existence for all that time, although, according to Ms. Iacovelli, it was not active after 2003?
Serge Bilodeau
View Serge Bilodeau Profile
Serge Bilodeau
2021-06-17 17:33
I refer you to my previous comment. I have absolutely no knowledge of that company, so I will answer each of your questions by saying that I am not familiar with it. I had no information about Parrhesia or nor did I have any contact with people who were involved in setting it up.
View Peter Julian Profile
NDP (BC)
This will be my last question for today.
Mr. Bilodeau, you mentioned a tax expert called Barrie Philp. Is he the resource person who should enlighten us about the whole matter of KPMG's strategies?
Serge Bilodeau
View Serge Bilodeau Profile
Serge Bilodeau
2021-06-17 17:34
Barrie Philp, whose name appears in the document that KPMG submitted, was one of those involved in developing that strategy.
As to whether he has to appear or not, I feel that's it's a question for you to answer.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-06-15 17:37
I ask that question because we've spent a fair bit of time today and in the rest of our meetings on tax evasion talking about what the government's role is and how we can do this better.
Is it a matter of resources? I think there's some evidence that it is a matter of resources. Is it a matter of simplifying the tax system? I would agree with you that this is required.
There is certainly a role for your profession itself to play, whether it's your provincial professional societies or whether it's your national organization. Are there things that your profession can do to help government ensure that the tax laws of our country are complied with, not only by your clients but by your members, the accountants themselves?
Charles-Antoine St-Jean
View Charles-Antoine St-Jean Profile
Charles-Antoine St-Jean
2021-06-15 17:38
Yes. Every CPA in Canada, by virtue of belonging to a provincial institute, is subject to a code of conduct, which is quite strict. It's in terms of behaviours and expectations of CPAs. CPAs, like all Canadians, are expected to abide by the law. Also, they're expected to abide by the code of conduct to make sure that they don't get involved with, say, tax evasion. That's a criminal act. You cannot be a CPA and do that.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-06-15 17:39
However, is it safe to assume that the tax avoidance and perhaps tax evasion strategies that are employed by companies often involve the enabling work of accountants?
Charles-Antoine St-Jean
View Charles-Antoine St-Jean Profile
Charles-Antoine St-Jean
2021-06-15 17:39
They could be non-CPA accountants. They could be many, many different kinds of people, so they're not necessarily CPAs. It can be anyone who can work in this field in Canada.
Hassan Yussuff
View Hassan Yussuff Profile
Hassan Yussuff
2021-06-01 11:12
Thank you, Chair.
First let me thank the committee for the opportunity to present to you today.
I represent the Canadian Labour Congress, Canada's largest central labour body in the country, and it speaks on national issues on behalf of three million working men and women from coast to coast. The CLC, of course, supports Bill C-253, and I want to thank the members who voted to advance this bill.
For years, the CLC has advocated changing the bankruptcy laws in our country. Workers and pensioners should be first in line, not last, when it comes to paying creditors. Workers pay for their defined benefits, pensions and other post-retirement employment benefits by deferring part of their compensation. Employers have a legal obligation to pay these promised pensions in retirement. It is totally unacceptable that earned benefits are taken away from pensioners, through no fault of their own, at a time in their lives when they are least able to adjust. Pensioners cannot simply go back to work when their pensions are cut. They need the post-retirement drug coverage and benefits that they have earned through working for a lifetime.
This tragedy has gone on too long. It has occurred too often. It cannot go on any longer. It is time to fix this problem.
The insolvency process is rigged against working people. The recent Laurentian University example shows how small unions are isolated and besieged by CCAA proceedings. Workers are threatened with devastating job losses unless they agree to make deep concessions to wages, pensions and benefits.
The CLC believes that public institutions should be excluded altogether from the CCAA and the BIA. The federal insolvency laws are meant for commercial corporate reorganizations. They were never meant to provide cover for provincial governments that refuse to live up to their fiscal obligations and expect workers and pensioners to pay the costs. The CLC would prefer that the claims of workers and pensioners be moved to the front of the line, as Bill C-253 seeks to do.
If there is no consensus to do so, the CLC believes that all parties should consider granting pensioners' and employees' claims the status of “preferred claim”. This would place them immediately behind the secure creditors in priority of claims, but ahead of unsecured creditors. We believe that treating employees' claims as preferred claims will materially improve outcomes for workers and pensioners.
However, getting the data to establish this is not easy. Currently the data is controlled by the big accounting firms—especially Ernst & Young, KPMG, Deloitte and PricewaterhouseCoopers —that act as monitors in CCAA proceedings and trustees in bankruptcies. There is a clear public policy purpose for making this data available for researchers. We are seeking aggregate anonymized data for large business insolvencies in which pension deficits are involved. We are not seeking commercially sensitive data. In our view, the superintendent of bankruptcy should be required to obtain this data from monitors and make it available to researchers.
We also recommend that the federal government conduct a feasibility study to establish a national mandatory pension insurance scheme for Canada. This study should form the basis of discussions with the provinces to establish a national scheme to rescue stranded pensions.
Finally, the government must stop company executives from enriching themselves and shareholders when there is a serious pension deficit.
The 2017 Sears Canada CCAA filing and liquidation was an outrage. Beginning in 2010, Sears paid $1.5 billion to shareholders in dividends and share buybacks. By doing so, Sears paid five and a half times more to its shareholders than it would have cost to entirely erase the deficit in its DB pension plan. Sears' decision in 2013 to pay a $500-million dividend when the pension deficit stood at $313 million would alone have been enough to eliminate the deficit. Instead, Sears Canada pensioners outside of Ontario were forced to accept cuts in benefits. This is a profound injustice. It should never be permitted to happen again.
Thank you very much. I look forward to any questions that committee members may have.
I wish all the best to you.
Lucia Iacovelli
View Lucia Iacovelli Profile
Lucia Iacovelli
2021-05-06 15:44
Thank you for the invitation to appear before this committee.
I am KPMG's Canadian managing partner for tax.
Before I commence with my remarks, I'd like to extend my sincere sympathy to Ms. Watson and all of the other victims of the Cinar fraud. We know that you've been seeking answers for a long time, and I wish we could help you. We simply do not have any connection to Cinar. We were not their auditor or their tax adviser. We did not help any of the people who carried out the fraud to take your money or hide your money.
At KPMG we ensure that our clients are able to work within the tax system, achieve their goals and pay the tax they are required to pay. That is the lawful tax planning work that we do for our clients across Canada every day, and in accordance with KPMG's policies, practices and culture, we ensure the highest standards of integrity, compliance and professionalism.
Like most professionals, as CPAs we are required to protect the confidentiality of information regarding our clients and former clients. We take that obligation seriously, but when we receive a legal order requiring us to disclose client information, we comply with it. In February 2017, for example, in accordance with the CRA requirement, we provided the CRA with all the names and all of our files related to the OCS implementations in the Isle of Man.
I would also like to address recent reporting by the CBC, which is focused on four corporations, referred to as the “sword” companies, which were established in the Isle of Man in the early 2000s. It's alleged that these companies were used to facilitate the Cinar fraud. I don't know whether that's true. I do know that any implication that KPMG had anything to do with the Cinar fraud is false. Any implication that KPMG was in any way involved with the “sword” companies is also false.
We can state this with confidence because we undertook the comprehensive and detailed due diligence of our files, records and personnel. We combed through millions of pages of documents. We reviewed our time and billing systems. We examined our client file databases, and we interviewed people. We took the added step of reviewing publicly available corporate documents from the Isle of Man. Through all of this, we found nothing that suggested that KPMG had any association with the “sword” companies.
We provided this information to the CBC, making it clear that they were mistaken, but they persisted in publishing irresponsible and misleading stories. As a result, our lawyers served a notice of libel on the CBC last week. The CBC's allegations mistakenly rely on emails, written 15 years after the fact, by a woman named Sandra Georgeson, and on similarities between the “sword” companies and KPMG client companies.
Let me address these mistakes one by one. KPMG, like other firms, commonly uses the support of corporate service providers to set up and help administer companies. There are a lot of these firms that do this work around the world. Ms. Georgeson worked for one such firm in the Isle of Man. In the early 2000s, KPMG in Canada offered a legal tax plan, known as the OCS. The OCS required the incorporation of companies in the Isle of Man, and Ms. Georgeson's firm was retained to do so. Fifteen years later she was asked by her new employer to prepare a list of these companies. Her recollection in 2015 was that the “sword” companies were examples of KPMG OCS implementations. They were not.
In its reporting, the CBC pointed to similarities in the sequential registration numbers, named directors, signatories and filing addresses between the OCS and the “sword” companies as evidence that KPMG set up these companies. The CBC is simply wrong in drawing this inference.
The similarities exist because whoever registered the “sword” companies used the same corporate service provider as KPMG, but our diligence shows that the “sword” companies do not belong to, or are in any way connected to, KPMG.
I wish we could help reunite the victims of this fraud with their money and bring the perpetrators to justice, but we can't. KPMG simply does not possess any information that could assist with the Cinar investigation.
Putting the CBC's unfounded theories about Cinar aside, the broader issue that is before the committee today is how Canada could combat aggressive tax avoidance and tax evasion.
We applaud the committee's review of this important issue. We share the committee's desire and we welcome the opportunity to contribute to the discussion today.
Thank you.
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you, Mr. Chair.
I would first like to give my regards to all our guests and thank them for their presentations. I also want to thank them for joining us today.
Ms. Watson, your testimony was very powerful. Let's hope that justice is done.
I would also like to acknowledge our colleague Elizabeth May, who is with us today.
Finally, I would like to remind you that my colleague Stéphane Bergeron is bringing motion M-69 to the House, which includes most of the measures suggested by the guests to combat tax avoidance and tax evasion.
My questions are for the representative from KPMG.
Ms. Iacovelli, I'm asking you and KPMG Canada to provide the Standing Committee on Finance with the following information.
KPMG has put in place tax strategies that provide a financial vehicle for some of its clients to reduce the tax they owe. For each case where KPMG Canada has directly or indirectly created or assisted in creating one or more companies in the Isle of Man, thereby enabling one or more Canadian taxpayers to hide money or reduce their tax payable, I am asking you to provide the committee with: all the documents used in these plans; a list of the companies created through these strategies; a list of the directors and officers associated with these strategies; a list of all those who benefited directly or indirectly; and the fees received by KPMG for each of these plans.
I would also ask that you provide us with the complete information for each plan carried out in a country or territory other than the Isle of Man and that you identify the country or territory. Of course, the clerk will be able to send you this request. If you are unable to respond fully now, I would ask that you provide your responses in writing to the Standing Committee on Finance as soon as possible or within 30 days.
Are you taking note of that?
I will continue with my questions.
Lucia Iacovelli
View Lucia Iacovelli Profile
Lucia Iacovelli
2021-05-06 16:23
Thank you.
That was quite a comprehensive question, so I'll try to approach everything that I think I heard.
I want to be clear that KPMG did not set up shell companies to hide money. That's not what we do. We provide legal advice that's tax-effective and we require that our clients meet all their filing obligations.
With respect to your request in terms of providing information, under my code of conduct I'm not able to provide you with client information unless there's a legal order that's provided. We have dealt with the CRA's request. We have provided the CRA with a list of all of the OCS clients and provided the CRA with the OCS files as well.
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you, Mr. Chair.
Clearly, our respective readings of the legislation are completely different. In our opinion, an accounting firm such as KPMG does not have that power with respect to requests from the Standing Committee on Finance.
Ms. Iacovelli, has KPMG Canada asked a company like KPMG in the Isle of Man or any other company to create, directly or indirectly, one or more of the four companies registered in the Isle of Man under the names Shashqua, Sceax, Katar and Spatha?
If so, which ones were they and how did that happen?
Lucia Iacovelli
View Lucia Iacovelli Profile
Lucia Iacovelli
2021-05-06 16:27
The four companies that you have mentioned, which are known as the “sword” companies, are not KPMG clients. We have never been involved with those clients and we have not set those clients up.
Results: 46 - 60 of 174 | Page: 4 of 12

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