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Results: 1 - 15 of 461
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.
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Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-22 16:19
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Thank you.
Factually, a more complex audit will take more time, and factually, when the CRA has the onus of proof, it needs to gather evidence that will withstand a challenge in court. It does take more time because we think it's in the Crown's best interest.
That's what the OAG observed. They observed, in the more complex cases, that we did allow more time to get the information, because we needed that information to collect the taxes owed.
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View Julie Dzerowicz Profile
Lib. (ON)
View Julie Dzerowicz Profile
2021-06-22 16:21
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Thank you so much, Mr. Chair.
I offer a warm welcome to the minister for being here today.
Mr. Gallivan, welcome to you in returning to our committee.
There's a false narrative put forward by the opposition that our federal Liberal government has done nothing to tackle evasion and tax avoidance. We heard from Mr. Gallivan that we've actually made a significant investment since 2015 in terms of tackling tax avoidance and tax evasion. There has been $444 million invested in 2016, $523 million in 2017, $90.6 million in 2018, $150.8 million in 2019, and an additional $304 million in this year's budget.
Minister, we also heard, as you mentioned, that this significant investment of over $1 billion has resulted in over $5 billion of identified additional tax avoidance coming into our coffers.
We've also heard that there's the International Consortium of Investigative Journalists, who do a bit of a ranking. They're the ones who broke the Panama papers and they've ranked Canada nine out of 80 in the world. We're among the top in terms of actually being able to tackle these issues on a global scale. Therefore, I want to give a huge thanks to you for your leadership, and a huge thanks for the leadership at the CRA, for the extraordinary efforts and work that they have done. Thank you for that.
To truly appreciate our efforts and how far we've actually come, can you take a few moments to add a little context to our government's efforts to fund the fight against tax evasion, by describing the situation at the Canada Revenue Agency when you took over as minister in 2015, after nearly a decade of Conservative cuts?
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View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I thank my colleague for her question.
I agree that combatting tax evasion is a difficult task for the government, a serious and complex one that takes time. We are tackling these very profound problems and very wealthy people who have the resources to hire the best lawyers and the best teams.
On the question of the Panama Papers, the government has invested over a billion dollars and has identified 900 Canadians. More than 200 audits have been completed and 160 audits are underway.
We have given the CRA the tools and resources to fight tax evasion. That fight was not a priority for the Conservative government, as was even confirmed publicly by one of their former ministers of national revenue, Jean-Pierre Blackburn.
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View Francesco Sorbara Profile
Lib. (ON)
Thank you, Mr. Gallivan.
Minister, you've been the minister for the Canada Revenue Agency for a number of years. You have submitted a number of budget requests to the government, and in terms of asking for resources to be provided to the Canada Revenue Agency.
Can you again really touch upon just how much we have invested into CRA because of what you have requested as the minister of the Canada Revenue Agency?
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View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague, who is also my parliamentary secretary, for his question.
Our government has invested over $1 billion in the Canada Revenue Agency. It actually had to organize an entire sector of the CRA so that, as I said, it could provide the resources and tools needed to be able to combat tax evasion. We had lost expertise. We have sought out people, we have signed agreements, country by country, and we are working with the OECD, the Organization for Economic Cooperation and Development. The CRA works at the international level. That is why it is so important to support the 2020‑21 budget. We are giving ourselves additional tools to ensure that the rules and the laws that enable us to take more effective action against tax evasion are tightened.
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View Francesco Sorbara Profile
Lib. (ON)
I'll go back to Mr. Gallivan.
Mr. Gallivan, as you know, at the Canada Revenue Agency, the government has invested significant resources. Can you speak about this in terms of the ongoing breadth of proceedings that the CRA has undertaken, in terms of looking at aggressive tax planning and also, of course, on the tax evasion side, please?
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Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-22 16:53
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Thank you.
I'll frame it in terms of the question about the additional billion dollars a year not making a dent, because I think it's true that the billion dollars a year is a tactical outcome. It's about the type of files that we're taking forward and the jurisprudence we're creating. That's what really has the strategic value. It's true that with an objective to find $5 billion over six years, we're already at $5.3 billion, but that's very operational.
I would again talk about the four cases at the Supreme Court, the many cases at the Federal Court of Appeal and the thousands of cases at the Tax Court, which is kind of trying to redraw the line of what acceptable tax planning is in this country. It's the reason why budget 2021 is now focused on additional lawyers and litigators for the Department of Justice.
Strategically, I think you see increased pressure on a sophisticated tax planning industry, and I think you see increased activism by the Department of Finance to close the loopholes that were surfacing, so in that way, the fight is really, I think, now before the courts, and in terms of the legislation as opposed to the audit floor.
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Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-22 17:10
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We're approaching $100 million in identified, unpaid taxes, plus, when we find those cases, we mine them for others. In terms of ROI and the tactical benefits, it's tens of millions of dollars, cresting $100 million. In terms of deterrence, it's harder to track, but it's definitely there.
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Samya Hasan
View Samya Hasan Profile
Samya Hasan
2021-06-17 12:02
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Thank you so much for inviting me to be part of this panel today. I really appreciate the timing of this invitation.
As mentioned, my name is Samya Hasan, and I am the executive director of the Council of Agencies Serving South Asians. CASSA is a social justice umbrella agency supporting the well-being of South Asians in Canada.
I’d also like to acknowledge that I am joining you today from the traditional territory of the Mississaugas of the Credit, which is covered by the Williams Treaties, and its colonial name is Durham region.
It's a difficult moment for me to speak today, as the entire Muslim community in Canada grieves the loss of the Afzaal family, as we witness the hate crimes against Black Muslim women in Alberta, as we see videos circulating on social media celebrating the London terrorist attack, and as we hear about the violent threats being made to a number of mosques in the GTA. However, I am here today to support our communities at this difficult time with hopes that the four Muslim Canadian lives lost will be far too many for our political leaders and that urgent action will be taken to reassure the Muslim community once again that we are safe in this country.
The disproportionate impact of Islamophobia on Muslim women has been widely documented in Europe, the United States and Canada. Clearly, Islamophobia is a gendered crisis; it operates according to gendered stereotypes of Muslim men as violent, terrorists and abusive, and of Muslim women as accomplices or oppressed. This is especially true for visibly Muslim women who choose to wear the niqab or the hijab, due to the preconceived notion that Muslim women have been forced to dress this way by patriarchal systems.
In fact, in a survey published by the Toronto Star in 2017, 56% of Canadians believed that Islam suppresses women. On the contrary, there is very little understanding or recognition of the worldwide movement of Muslim women to wear the hijab as a sign of empowerment. These stereotypes of Muslim women in policies, political rhetoric and the media lead to increased Islamophobic incidents against visibly Muslim women. One such policy was the now dismantled barbaric cultural practices act of 2015. Due to the limited time I have today, I'm not going to talk about the online hate component, as I know my colleagues have probably discussed it, and my sister, Amira Elghawaby, has talked about that at length.
For a long time, we shamed France for its anti-hijab and anti-niqab policies, yet we have a province in our own country that passed unconstitutional policies without any evidence of harm to society based on what Muslim women can or cannot wear. In these policies, we see the height of hypocrisy of modern, white feminism, which is led mainly by white women, to the exclusion and detriment of visibly Muslim women and other racialized women who feel empowered by their faith and choose to wear the hijab or the niqab.
On the other hand, widely believed stereotypes of Muslim women as being oppressed in their own communities do not do Muslim women any favours. In fact, it is the state that passed the Islamophobic policies and it is the state that is oppressing Muslim women by limiting their freedom to choose. It is the state that oppresses Muslim women by sitting idly while their human and constitutional rights are being abused and doors to opportunities in this country are closed for them, just because they choose to dress a certain way. This is systemic social and economic exclusion of visibly Muslim women, yet we are silent. Decades of being exposed and victimized by Islamophobia described in detail by my other colleagues today have led many Muslim women to feel unsafe, defensive, distrustful and afraid, afraid that anything that they do or say can be used against their communities by the media.
To address this crisis, I urge this government to work with Muslim women and Muslim-led community groups and organizations to combat Islamophobia with a focus on the gendered impact of this crisis. I urge this government to work with the provinces to mandate a community-informed education curriculum on Islamophobia, among other areas of anti-racism such as anti-Black racism and anti-indigenous racism, especially in public schools, so that our children grow up to respect people of all faiths, cultures and races.
Finally and most importantly, I urge this government to implement restrictions on online hate and legislate penalties now for social media platforms for not shutting down hate content.
I'm going to end with the brilliant words of Dr. Yaser Haddara from Hamilton from an article I read earlier this week:
Our leaders must take the needed hard look in the mirror. They must take responsibility for their own actions and those of their political parties and supporters. They must commit to do better and they absolutely must do better. Hate thrives in the dark. We fight it with transparency, accountability, and equality before the law. No more special laws,—
That's with reference to Bill 21:
—no more secret audits,—
That's with reference to the report from last week showing the CRA unfairly targeting Muslim charities over the last decade:
—no more double standards. Anything less, and I fear we’ll soon stand again in yet another Canadian city to mourn more Canadians lost.
Thank you for your time.
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Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-10 15:33
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Good day, Mr. Chair.
To maximize the time for questions, I might just cover some key points of emphasis. The full remarks are filed with the clerk of the committee.
Both the Government of Canada and the CRA are firmly committed to combatting tax evasion. We are also determined to make it much more difficult for all those who intentionally choose not to meet—
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Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-10 15:34
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It must be recognized that international tax evasion and aggressive offshore tax avoidance are very complex global issues.
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Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-10 15:34
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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.
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Alexandra MacLean
View Alexandra MacLean Profile
Alexandra MacLean
2021-06-10 16:49
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Thanks very much, Mr. Chair.
I just wanted to add how seriously we take our mandate in international and large business directorate. We have been staffing up and we have been focusing on training. As the member indicated, we are challenging very well resourced interests that have very well qualified advisors. They have very deep pockets. There is a strong focus on improving training and making sure our people are well equipped to take on the most challenging and complex tax situations.
We have also invested a lot in information technology. I think Mr. Gallivan has touched on that in some of his answers. The amount of data coming into the agency is better than it has been in the past by quite a lot. We're better able to detect relationships and transactions than we were in the past, for sure.
However, it is a challenging business. There's a lot of money at stake, as many people have mentioned during this afternoon's proceedings. A lot of resources are deployed, I guess, on both sides, but particularly in the interest of high-net-worth individuals and multinational enterprises.
I wonder if my colleagues from Finance want to highlight.... We are quite excited about some of the budget 2021 initiatives that will help us deal with base erosion.
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Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2021-06-08 11:07
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Thank you, Madam Chair.
I am happy to be with you once again, to discuss “Report 7—Canada Emergency Wage Subsidy”, released in spring 2021 by the Office of the Auditor General of Canada, or OAG.
With me today are Ted Gallivan and Maxime Guénette, whom you already introduced.
My focus today is on the response of the Canada Revenue Agency, or CRA, to the motion adopted during meeting 27 of the Standing Committee on Public Accounts related to its study on report 7.
The motion requested that both the Department of Finance and the CRA provide the committee with:
all studies, data and analysis used for the implementation of the Canada Emergency Wage Subsidy, that these documents be provided to the committee with redactions for Cabinet confidence and personal information, and that these documents be provided to the committee no later than May 27, 2021.
Upon adoption of this motion—
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