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Results: 1 - 15 of 87
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you, Mr. Chair.
Like the minister, I too want to wish you a happy birthday, Mr. Chair.
I am going to start with a statement. Then I will ask my questions.
Hello, Minister. Thank you very much for being here this afternoon.
The committee has already been working on the problems of tax evasion and tax avoidance for some time, in particular on the tax schemes put in place by KPMG, providing a financial vehicle to enable certain of its clients to reduce their tax payable. In light of the internal documents relating to this plan provided to the committee by KPMG on May 17, 2016, this could be a form of tax evasion, so of something illegal.
All these problems are extremely complex, as you acknowledged and pointed out in your speech. Today, for example, we can read in La Presse that data from the Canada Revenue Agency show that its recent efforts to combat tax evasion by the richest Canadians have not led to any charges or convictions. The same kind of article can be read on CTV.
Experts have appeared here to tell us that there is a feeling of impunity toward the government and the CRA, among the users of the tax havens and the tax law experts who create their schemes. We have been told that to put an end to this kind of behaviour, the United States brought out the heavy artillery to deal with KPMG: investigations by the Internal Revenue Service, threats of searches and of charges of obstructing justice, penalties, criminal charges of fraud and conspiracy against the firm and its officers, and threats to charge the firm with being a criminal organization. Here, there has been none of that. Instead, the CRA has proposed voluntary disclosures and still nothing has been resolved with the clients who did not agree.
The experts reminded us that it is not possible to control what we can't see. Unfortunately, as you said in your testimony, the Canada Revenue Agency does not have access to all the information for doing these audits. For example, KPMG keeps going to court so it doesn't have to share its information with the CRA. The experts denounce the appearance of impunity and unfairness for the rich clients and the companies that create these schemes. They conceal their information from the CRA and contest the requests in court. At the committee, it is extremely difficult to get answers to our questions, to shed light on this entire matter. There are even witnesses who refuse to appear, in spite of the summons issued by the committee. These are no jokes!
I repeat: it is important to shed light on this entire matter and get to the bottom of things. We have to be able to put in place laws, regulations, processes and guidelines to prevent any form of tax evasion. That is why I am asking you, as Minister of National Revenue, to initiate a public inquiry into the matter of the schemes created by KPMG that enabled Canadian taxpayers to collect money in the form of gifts or otherwise, money that was not included in the tax returns of the recipients, from companies in the Isle of Man or any other country, as section 231.4 of the Income Tax Act empowers you to do. I believe the committee could also adopt a motion to that effect a little later.
Do you want to initiate a public inquiry, Minister, please?
Thank you.
View Gabriel Ste-Marie Profile
BQ (QC)
If I may, that is not at all what I asked. The committee's limitations are clear, and the only solution, the only tool, for shedding light on the entirety of KPMG's offshore activities is the public inquiry.
We are not talking about an investigation before the courts. You, as the Minister of National Revenue, are the only one who has this power under the Income Tax Act; you can ask for a public inquiry to be held to get to the bottom of things and shed light on the situation. In my opinion, that is what should be done.
I will ask you again. Please, can you ask for a public inquiry to be held into this entire matter so we can get to the bottom of things?
Thank you.
View Gabriel Ste-Marie Profile
BQ (QC)
I am extremely disappointed to hear such nonsense being given as an answer.
In the United States, a senate committee held an inquiry that has changed things. It is our role to do that here. My role as an elected representative, and our role as a committee, is to ask the minister to initiate a public inquiry to get to the bottom of things. There are enough points to be raised to ask for that.
We are not getting any answers, other than being told to change jobs. What a load of nonsense. She is the one who has the power.
Is she going to do it, yes or no?
View Peter Julian Profile
NDP (BC)
Thank you very much, Mr. Chair.
I also want to wish you a happy birthday. Someday we will celebrate together, I'm sure.
I would like to welcome the minister and Mr. Gallivan.
I'm going to continue in the same vein as Mr. Ste‑Marie.
We are talking about thousands of Canadians, victims who have lost all their life savings. We know very well that in the frauds committed by Norshield and Mount Real, there are thousands of Canadians who lost everything. The system has never got justice for them.
Minister, you have been the minister for six years. What do you say to the victims, like Janet Watson who appeared before the committee, who say that the government has done absolutely nothing to protect them or to bring the guilty parties to justice?
View Gabriel Ste-Marie Profile
BQ (QC)
Thank you, Mr. Chair.
If we want to get to the bottom of the tale of the shell companies set up by KPMG, if we want to get to the bottom of the tale of the thousands of small investors like Ms. Watson who were swindled, the only solution, according to the experts, is a public inquiry. Tax law expert André Lareau is one of the people saying that.
The role of requesting an inquiry has been assigned to you, Minister, and no one else. I also want to remind you that it was thanks to a whistle-blower inside the CRA that we got wind of the deals that were offered to the Isle of Man fraudsters. The reason the CRA's investigators are unhappy is that the order came from higher up. It takes a public inquiry.
Are you going to call a public inquiry, as you are given the authority to do by section 231.4 of the Income Tax Act, yes or no?
View Gabriel Ste-Marie Profile
BQ (QC)
It isn't interference.
Minister, you are the only person in Canada with the power to shed light on it and get to the bottom of things. That is the power you have. You are the minister. Sympathy is not enough.
Are you going to initiate a public inquiry?
I understand it's a no. The message you are sending to everyone who has been swindled is that you are sympathetic, but you aren't going to do anything. That is unacceptable. That choice is the choice to do nothing to get it moving, to do nothing to get to the bottom of things. That is a definite sign of incompetence.
View Diane Lebouthillier Profile
Lib. (QC)
That is what my colleague will never be able to do. I have told him repeatedly that the Canada Revenue Agency is independent. I cannot initiate an investigation—
View Gabriel Ste-Marie Profile
BQ (QC)
You are the only person who can request a public inquiry. It would seem that you do not even know this. That is unacceptable.
View Wayne Easter Profile
Lib. (PE)
Mr. Ste-Marie, the minister has the floor. I don't want to intervene here, but I would suggest that members go back and look at Mr. Gallivan's answer on section 231.4, in which he talked about what kind of inquiry that is under the act. I'd suggest members look at that comment. Look at section 231.4 in relation to the words Mr. Gallivan said earlier.
Mr. Julian.
View Peter Julian Profile
NDP (BC)
Thanks very much, Mr. Chair.
I think we probably have about 45 minutes. I believe that Mr. Ste-Marie wants to come back to an issue as well.
I've already circulated the motion and I'll read it for the record and then add an amendment just to facilitate things. This is following discussions with Mr. Sorbara. I move:
That the Committee request that the government initiate a public inquiry under the Income Tax Act—
I would add “or the Inquiries Act”.
—to investigate tax planning by KPMG, or any of its subsidiaries, in the Isle of Man, the possible involvement of the sword companies Shashqua, Katar, Sceax, Spatha and Parrhesia corporations, and to investigate tax fraud in the Cinar, Norshield and Mount Real cases and any possible links with the KPMG Isle of Man tax planning and/or Isle of Man's sword companies, and that this be reported to the House.
I'm adding “or the Inquiries Act” because that gives the government the scope to use either tool, and since there is some dispute around the use of the Income Tax Act, my interpretation—and I would certainly agree with Mr. Ste-Marie and Mr. Lareau on that—is that it gives the government a broader scope to use the tool that is most appropriate.
The most important thing here is that we know from the testimony we had from Janet Watson, from the really important journalism we've seen both with Enquête on Radio-Canada and also from The Fifth Estate on CBC that thousands of Canadians were defrauded. That money was taken overseas. We have a responsibility and we've undertaken to get to the bottom of it as much as we can, but to date, we have asked KPMG many questions and have received often evasive or incorrect responses or no responses at all.
Therefore, I believe that given what we know and that we all share an interest in getting to the bottom of this and we all share an interest in seeking justice for the victims of these colossal frauds—half a billion dollars, and people losing their life's savings. You can only imagine somebody who saved up, like Janet Watson did, $68,000 of her life savings and lost it all due to this fraud.
I believe we have a responsibility to pass this motion. Ultimately, it is a request, but it does seek justice for the victims, and I believe that's what every member of this committee wants to see as well.
View Pat Kelly Profile
CPC (AB)
When you were an employee at the Montreal office, your office did offer offshore products to your clients. That was something you did in the course of your work at KPMG in Montreal. You said you had two clients, or you were at least involved in offering offshore products on two occasions.
View Pat Kelly Profile
CPC (AB)
Okay.
I really want to know about the scope. I'll go a little further with the question just to ask about the scope of overseas products offered in the Montreal office when the witness was there. I think he said in his opening statement that on a couple of occasions, he'd been involved in that.
Can he comment? Was tax planning involving overseas products a common or widely used strategy in the Montreal office when he worked there?
View Pat Kelly Profile
CPC (AB)
Okay, so what changed? When did your business stop offering overseas products and why?
View Pat Kelly Profile
CPC (AB)
I'm not sure that was an answer to my question. I wanted to know when.
Was there a date or a time period at which KPMG stopped offering overseas products? I think the earlier testimony suggested that there was a time at which KPMG ceased offering this kind of tax plan.
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