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Results: 1 - 15 of 220
View Diane Lebouthillier Profile
Lib. (QC)
Thank you very much.
Hello to all my colleagues.
Mr. Chair, I would like to take this opportunity, before beginning my presentation, to wish you a happy birthday.
Thank you for this invitation to provide details on the Canada Revenue Agency's strategies to combat tax evasion and aggressive tax avoidance.
Let me begin by saying that the Government of Canada and the CRA are firmly committed to combatting tax evasion and aggressive tax avoidance on all fronts. And we are all committed to making things much more difficult for those who choose not to meet their tax obligations.
In fact, since 2016, the Government of Canada has made investments that have helped provide the CRA with better data, better methodology and, ultimately, better results.
In particular, these investments have enabled the agency to develop a strategy that promotes global data sharing. Let's face it, tax evasion and aggressive tax avoidance are complex global problems.
The CRA is working with international partners through various multilateral organizations, including the Organization for Economic Co‑operation and Development, or OECD, and its forum on tax administration, the FTA. I was pleased to see that Mr. Bob Hamilton, commissioner of the CRA, was appointed chair of the FTA in August 2020.
As a result of its modern and collaborative strategy, Canada is member to 93 tax treaties and 24 international tax information exchange agreements. In fact, Canada is one of more than 70 countries that exchange information through the country‑by‑country reporting system.
In addition, Canada participates in the electronic funds transfer reporting program, which is related to international electronic funds transfers over $10,000. And with the implementation of the common reporting standard in 2016, Canada, alongside nearly 100 other jurisdictions, benefits from financial institution data that identifies financial accounts held by non-resident clients for tax purposes.
With these improved resources and tools, the CRA is now able to focus on large multinationals, high net worth networks, the underground economy, cryptocurrency and real estate transactions.
The CRA is now seeing these signs of success because of the investments made by the Government of Canada.
In recent years, the CRA has assessed the equivalent of more than $12 billion each year through audits, more than 60% of which were related to tax avoidance by large multinationals and aggressive tax planning by high net worth individuals.
And I must note that these investments have generated approximately $5 billion in additional federal tax revenue, as of March 2021.
Additionally, the CRA's criminal investigations program has enhanced its ability to investigate the most serious tax crimes. It is important to note that the agency investigates complex cases in collaboration with its partners in the Department of Finance and the Department of Justice to close what may be perceived as legal loopholes. And I must remind you that the CRA has shifted its focus to more hard-hitting investigations, which result in more jail time and higher fines.
However, we must never forget that tax evasion often involves very complex domestic and international money transfer structures, which require the CRA to complete lengthy and time-consuming intelligence gathering processes.
I also want to note that we are increasingly seeing high net worth taxpayers using the court system when they are audited in order to avoid providing documents and information to the agency. And I want to emphasize that the volume of complex litigation is up significantly from previous years, with approximately 3,000 active cases considered high level in complexity.
As a result, first announced in the 2020 fall economic statement and confirmed in budget 2021, the Government of Canada has committed to invest $606 million over five years, beginning in 2021‑22, to continue this complex work.
These investments will close the compliance gap for high net worth individuals, strengthen technical support for high-risk audits, improve the CRA's ability to identify tax evasion involving trusts, improve the CRA's ability to stop fraudulent or unjustified GST/HST refunds, and, finally, improve the criminal investigations program.
In addition to the financial investments from budget 2021 legislative changes will also be put in place to strengthen the rules on transfer pricing, oral testimony, base erosion and profit shifting, and mandatory disclosure rules.
Before I conclude, I would like to wish the chair of this committee, Mr. Wayne Easter, a very happy retirement.
I want to thank you personally for your outstanding work on behalf of Canadians. We will miss you.
Mr. Chair, I am proud to say that the Government of Canada and the CRA have shown determination and innovation in creating effective and proactive approaches to identifying those who avoid paying their fair share of taxes or who are taking steps to do so.
Thank you.
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-10 15:34
Thank you, Mr. Chair.
Through the government's investments, which have been announced in federal budgets since 2016, the CRA has been able to equip itself with tools and resources that allow collaboration and exchange of data at a global scale and provide much more transparency for Canadians.
Because of these investments by the Government, the CRA has benefited from better data, better partnerships, and ultimately, better results in its fight against tax evasion.
Canada is one of more than 70 countries that exchange information via country-by-country reporting. Since 2015 Canada has participated in the sharing of data related to international electronic funds transfers of over $10,000. Additionally, with the implementation of the common reporting standard in 2016, Canada and nearly 100 other jurisdictions have been able to benefit from data from financial institutions that identify financial accounts held by customers who are non-residents for tax purposes.
Thanks to budgetary investments since 2016, the CRA has observed excellent signs of success. In fact, the agency has identified over $12 billion in gross audit assessments every year, over 60% of which is related to tax avoidance by large multinational corporations and aggressive tax planning by wealthy individuals. While the CRA had committed to finding an additional $5 billion over five years, we actually achieved that goal a year early, despite the pandemic. In addition, our proven results demonstrate that we're taking the right tax cases to the Tax Court of Canada, the Federal Court of Appeal and the Supreme Court of Canada.
Of course, there is still work to be done, but we have a proven track record to show that we are making it increasingly difficult for non‑compliant individuals to continue their activities.
As part of the fall economic statement 2020, and confirmed in budget 2021, the government committed to investing an additional $606 million over five years, starting this fiscal year. Notably, we are working to close the high-net-worth compliance gap, bolster technical support on high-risk audits and enhance the criminal investigations program. These investments will allow the CRA to fund new initiatives and extend existing programs targeting international tax evasion and aggressive tax avoidance.
The Government of Canada's continual investment in fighting tax evasion and aggressive tax avoidance promotes an international exchange of information that is both modern and collaborative, and ultimately ensures that all Canadians pay their fair share.
Stephanie Smith
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Stephanie Smith
2021-06-10 16:22
I think you're referring to the domestic law provision that allows exempt surplus to be repatriated free of tax if it comes from a jurisdiction with which Canada has a tax treaty, or a tax information exchange agreement.
The underlying tax policy reason for that provision is to ensure that Canadian corporations can compete competitively and pay the same level of taxes in the jurisdictions in which they are operating. There are rules around the foreign affiliates system to ensure that only active business income can be repatriated tax-free. Any income that is passive investment income is taxed on an accrual basis.
Abby Hoffman
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Abby Hoffman
2021-06-07 20:25
Sure, and I'll keep this fairly brief.
First of all, I'll say that the federal government is not in the business of enforcing the Criminal Code. This does fall to provinces, and it falls to a combination of public authorities and self-regulating professions.
I will say, though, that the jurisdictions where the reporting is through a provincial so-called designated recipient—in other words, we receive the reports in bulk from those provinces—represent the overwhelming majority of the population and MAID cases in the country.
That's only to say that, with the adequacy of the reports from a Criminal Code-MAID legal framework perspective, it's not difficult at all for provinces to examine that data and make their own assessments about compliance with the Criminal Code.
Abby Hoffman
View Abby Hoffman Profile
Abby Hoffman
2021-06-07 20:26
I mentioned this before. When we report, we're reporting on what the providers are saying about each and every eligibility criteria and each and every safeguard that's spelled out in the legal framework.
If you're asking if we have monitors out there or if provinces, for that matter, have on-the-ground monitors who are validating that data, the answer to that question is no. This is very similar to how things work in the health care system generally. People who feel aggrieved or wronged can complain. There are medical oversight bodies in Ontario. The coroner's office investigates and so on—
Catrina Tapley
View Catrina Tapley Profile
Catrina Tapley
2021-06-02 17:47
We will table the Atlantic immigration evaluation with the committee. As well, I think we have some important statistics on the current immigration landscape, how many people are staying in cities, how many people are in communities themselves, just as good background information. The AIP evaluation would, I would think, certainly be helpful.
Hassan Yussuff
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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.
Nathalie Levman
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Nathalie Levman
2021-06-01 13:04
I'm wondering if you would like to hear from Statistics Canada on these issues. There is data out there and a lot of it has been spearheaded by indigenous groups, but I think this is really a question for Statistics Canada. I note that they're not here.
Hamid Benhmade
View Hamid Benhmade Profile
Hamid Benhmade
2021-05-28 14:13
Ladies and gentlemen, my colleague Claude Vaillancourt and I would like to thank you for inviting us to appear before the committee on behalf of the Réseau québécois sur l'intégration continentale.
Currently, as you know, the debate on the waiver of intellectual property rights on anti-coronavirus vaccines reveals a divide between those who are for the waiver and those who are against the waiver.
As my colleagues reminded us earlier, the waiver has been officially endorsed by 58 governments and is supported by 100 countries. A small number of powers are opposed; they include Brazil, Canada, Japan, the United Kingdom and the European Union.
Ladies and gentlemen, whether we are for or against the waiver, one thing is certain: no one can deny that vaccine nationalism may well harm all the investments that have been made to contain the pandemic since it began. That a number of anti-coronavirus vaccines have been produced in less than a year is an unprecedented scientific accomplishment. However, that success, laudable though it is, is presently undermined by unequal, troubling and worrying access to the vaccines. That is why the Réseau québécois sur l'intégration continentale is calling for property rights on the anti-coronavirus vaccines to be suspended for two fundamental reasons. First, for reasons that are humanitarian, not economic, and second, for reasons that are purely economic.
First and foremost, it is time to put humanitarian issues before all other considerations. It is unjust that the least fortunate, basically those from developing countries, should remain at the mercy of pharmaceutical giants, when we know full well that most subsidies intended to support research into the coronavirus come from public funds.
Here we are once more, privatizing profits and socializing losses. The public is paying twice for the same vaccine. We pay first to finance the research and development and we pay again to acquire the doses we need.
Because developed countries have obtained more than half of all the contracts for vaccines, many developing countries will not have mass vaccination before 2025. A delay of that kind could set the scene for potentially dangerous variants in the future and cost many their lives.
Economically, the vaccine war is likely to cost more than the war against the pandemic. That is the conclusion of research published by the National Bureau of Economic Research in the United States. In fact, if countries of the North become vaccinated and countries of the South remain largely excluded from vaccination, the global economy will sustain losses of more than $9.2 trillion in 2021, almost half of which will be absorbed by advanced economies, including Canada.
Because of the recession that the pandemic is imposing on less-advanced economies, exporters and importers in the advanced economies, of which Canada is one, would be prey, first, to markets that are stagnating or even declining, and second, to global value chains that are more and more disrupted. This is why ensuring free and universal access to anti-coronavirus vaccines, and doing so today, is not only an altruistic and moral act, it is also an economic necessity.
In the light of these factors, which we invite Canada to consider, our network urges the Government of Canada to support the waiver of intellectual property rights on vaccines and to promote it in international discussions.
In the long term, lifting property rights on vaccines against COVID-19 must be followed by the dissemination of knowledge. Some countries in the South have shown that they have a great capacity for producing generic medications. But restrictions on importing them in the TRIPS and the extension of protection for brand-name medications in various free trade agreements, have made it difficult to disseminate essential data so that the medications can be produced and made available.
Ladies and gentlemen, whether the issue is saving lives or relaunching economies, free and universal vaccination is currently the only way we have to achieve it. The extraordinary circumstances of the pandemic call for extraordinary action.
Thank you for your attention.
Jean-François Tremblay
View Jean-François Tremblay Profile
Jean-François Tremblay
2021-05-28 14:41
The portal is up and running. I've been using it myself. It works very well. When I have discussions with stakeholders, including universities and so on, they all mention how useful it is to have such a tool. I don't have the numbers on how many people actually have accessed it and access it on a regular basis, but that's something we can do. Also, at some point, if the committee specifically wants a briefing on how to use it, what exactly is there and what we're thinking for the future, we would be more than pleased to do that. I'm sure our scientists and our data group would be more than pleased to brief the committee.
Theresa Tam
View Theresa Tam Profile
Theresa Tam
2021-05-21 11:55
Mr. Chair, that is a very important question.
I think public health policy should be driven by data. We have had data presented, and it has to come from the local level up to the national level, so I do think we've seen data improve over time. This is the first pandemic where we're having case-by-case data reported nationally through the pan-Canadian health data strategy. With the safe restart agreements and the resources being provided to the provinces and territories, we have seen improvements in the data being gathered, including on race, indigeneity and occupation. That has improved, and that kind of improvement must be taken forward as we look to keep going and strengthening that data system.
Anthony Farrell
View Anthony Farrell Profile
Anthony Farrell
2021-05-12 16:49
Thank you for the invitation to speak today. As already noted, I'm a professor in land and food systems in the department of zoology at UBC. I hold a Canada research chair tier one in fish physiology, culture and conservation. I'm a fellow of the Royal Society of Canada, and a fellow of the Canadian Geographical Society. I obtained my Ph.D. in zoology at UBC many years ago. I've held academic positions previously at biology departments at the University of New Brunswick and Mount Allison University in New Brunswick, and Simon Fraser University in British Columbia.
In almost a 50-year research career, I've focused predominantly on the physiology of a crucial life support system in fishes, which is their cardio-respiratory system. I work predominantly with B.C. salmonids, but I have researched fish on every continent, including Antarctica, studying over 100 different fish species. I've published over 470 peer-reviewed journal publications, 31 co-edited book volumes, and a three-volume encyclopedia of fish physiology.
My research collaborations are wide in B.C. They have included Fisheries and Oceans Canada, the Pacific Salmon Commission, the Pacific Salmon Foundation, Go Fish BC, commercial fishers, first nations and industry. Among my publications, about 140 of them deal broadly with the conservation physiology of salmon, which is a passion for me. About 50 of the publications deal with assessing sublethal consequences of infections, diseases and toxicants. I was the expert who would have investigated the consequences to salmon of experimental pathogen infections for the strategic salmon health initiative led by Dr. Miller-Saunders and Dr. Riddell. In fact, I've co-authored 21 publications with Dr. Miller-Saunders.
In terms of aquaculture, I was a member of the Honourable John Fraser's B.C. Pacific Salmon Forum. Also, I was a member of Dr. Mona Nemer's Independent Expert Panel on Aquaculture Science, which reported to DFO.
At the request of the provincial Minister of the Environment I was commissioned to review the 2019 Newfoundland and Labrador south coast mortality event of cultured Atlantic salmon. That was authored by Burke, Gardner and Farrell.
Thus, beyond basic science discovery, I seek direct application of my research and knowledge to issues such as salmon conservation; assessing sublethal consequences of infections, diseases and toxicants to salmon; and also sustainable salmonid aquaculture.
If you're interested, I have three messages that I will happily expand on, as time allows.
My first is a comment. I believe, having watched earlier versions of these meetings, that crucial peer-reviewed literature, that which is relevant to wild salmon management because it has investigated the actual impacts to salmon of deliberate disease infections, is being ignored by certain communications to this committee.
The second one is a recommendation of sorts to DFO. DFO needs to make its information and data pertaining to both aquaculture and to wild salmon more readily available, and in that I mean more user-friendly, which is the case in Norway.
My third and last point is that aquaculture decision-making must become more locally based, particularly in B.C. It needs to be evenly applied from coast to coast to coast. To do so, DFO will need to devolve some of its regulatory powers to the local peoples, as is the case in Norway.
Thank you very much.
Daniel Therrien
View Daniel Therrien Profile
Daniel Therrien
2021-05-10 12:47
The government certainly cited the desirability of Canada maintaining adequacy status in the EU as one impetus for Bill C-11. Indeed, maintaining adequacy is important. It allows data flows between Canada and the EU without specific mechanisms, like special contracts and the like.
Clearly, for Canada maintaining adequacy is helpful in order to maintain a freer flow of data between Canada and the EU. Beyond the EU, as I've said, we live in an interconnected world, and obviously, we have a neighbour to the south with whom we have very significant fundamental commercial relations, so data also needs to flow there.
I think that's all good, but we need to.... Hopefully, in the context of the review of Bill C-11, we can look at ways to allow these data flows, but in a way that recognizes that when data leaves Canada, the risks are higher.
I'm not advocating for ways to prevent these data flows, but certainly, in the submission you will now be able to read, we make certain recommendations on how to enhance the protection of personal information when it does leave Canada, while still allowing that.
Debi Daviau
View Debi Daviau Profile
Debi Daviau
2021-05-06 16:11
Mr. Kelly, we used to have international tax units that were very well organized and could work together more effectively to produce those kinds of documents, but those units were broken down some 10 or so years ago in favour of interspersing these tax experts within more generalized teams. That has reduced the capacity of employees at the CRA to be able to deliver on getting international tax avoiders to pay their fair share.
Ryan Campbell
View Ryan Campbell Profile
Ryan Campbell
2021-05-06 16:16
The biggest issue that has been advocated by auditors at the Canada Revenue Agency, based on their work, is to focus on corporate tax evasion. The scale is much larger. The PBO has identified that as much as $25 billion a year could be accessible or unlocked from tax havens if the right provisions were in place. In order to do that, it's really necessary to reorient the way the tax system is structured and to reform the current state.
Right now when an international corporation makes a sale, they have some discretion to transfer the profit or to modify the price within internal supply chains to book the value of that sale in a low-tax jurisdiction. From the standpoint of CRA auditors, it's a game of cat and mouse to try to figure out exactly what the fair market value of that transaction was and determine whether or not it was on the level.
In order to tip the scales back in favour of companies being taxed fairly everywhere, there's a specific combination of different reforms that can be put in place, or broad principles, a combination of which would solve the problem.
One is a formulary allocation of profits, which is basically a change in criteria that are currently in use in Canada that determine how corporations' profits are booked from province to province.
The other is unitary treatment to make sure that when these transactions happen between a parent company and a subsidiary, leading to this transfer pricing and profits being booked in low-tax jurisdictions instead of where the commerce actually happens, the corporations are treated globally as a unitary entity—
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