May 6, 2013
Charlottetown Senator’s Response to House of Commons
Finance Committee Report: Tax Evasion and Tax Havens
Charlottetown Senator Percy Downe has said that the House of Commons Standing Committee on Finance report entitled Tax Evasion and Tax Havens is “a good start”, but that the way the report addresses – or fails to address – some issues is a cause for concern.
Downe points to the dismissal of the importance of measuring the “tax gap” (the difference between the tax revenue the government ought to be able to collect and what is actually collected) combined with a refusal on the part of the government to examine the overall impact of overseas tax evasion as a significant shortfall of the report. Of further concern are the job cuts the Canada Revenue Agency (CRA) is facing of approximately 3000 positions – the most cuts of any government department - and the 2013 Budget recently announced cuts to the Agency’s budget of $259 million over the next five years.
“The first step to solving a problem is understanding it, and it is a step that other OECD (Organization for Economic Co-operation and Development) countries, like the United States and the United Kingdom, have deemed well worth taking in measuring their respective tax gaps,” said Downe. “The government can talk all it wants about how futile an exercise it would be for Canada, but the fact remains that the Parliamentary Budget Office believes such an estimate to be possible, and indeed worthwhile; if CRA doesn’t want to measure the tax gap, that’s fine. But they must stop preventing the PBO from measuring it, and allow that office to do their job.”
Similarly, the list of witnesses that appeared before the Committee is lengthy, and seems to reflect a large range of views on the subject, however, there is again a significant deficiency; namely the absence of the Hon. Gail Shea, Minister of National Revenue. To study such an important issue without hearing from the Minister responsible suggests that the Minister did not wish to provide testimony, and for very good reason, given the failure of her department to actually collect the significant amount of taxes owed to the Canadian Government.
In terms of the report itself, Senator Downe commended all members of the committee who took part in the study. In particular, he recognized the efforts of Finance committee members, the Honourable Scott Brison (Kings-Hants) and Murray Rankin (Victoria), both for their diligent efforts during the study as well as their thoughtful additions to the minority reports which reflect more accurately the seriousness of the problem of overseas tax evasion and the failures of the current government in addressing it. Downe says that the call for greater oversight of the Agency by the Auditor General and the Parliamentary Budget Officer is a sound recommendation, particularly in light of recent reports of growing levels of tax revenue going uncollected; similarly, the recommendation that more funds be dedicated to combat overseas tax evasion should be immediately taken up by the government, as the cited examples from Canada and other countries demonstrate the value of such a measure.
“The Canada Revenue Agency is the department upon which all other branches of government depend for their revenue. It is vital that it operate with efficiency and fairness,” concluded Downe.
For further information:
Senator Percy Downe: 613-943-8107
Or toll free at 1-800-267-7362
www.sen.parl.gc.ca/pdowne |
