April 23, 2012

Honourable Gail Shea, P.C., M.P.
Minister of National Revenue
555 MacKenzie Avenue, 7th Floor
Ottawa ON  K1A 0L5

Dear Minister Shea:

I have a question regarding statements made by your staff as reported on CBC Television’s The National broadcast on Thursday, April 5th, 2012.

The story, related to the more than 1700 Canadians discovered with money in secret accounts in a bank in Switzerland was followed by these remarks from the reporter, Diana Swain:

National Revenue Minister Gail Shea’s office, late today, said they dismiss that. . .
They point to 19 agreements signed in the past two years with countries around the world to try to get rid of these tax schemes. And they say that since this list came out, 84 Canadians have ante’d up through Voluntary Disclosure - $18 million in unpaid taxes.

This reference to 84 Canadians using the Voluntary Disclosures Program piqued my curiosity and reminded me of a question I had asked in the Senate last year (attached):

With respect to possible tax evasion:

In 2009, French authorities received information about 80,000 bank accounts in Switzerland, many of which were opened by French citizens in order to avoid paying taxes owed to the French state. France has since reported that it has recovered millions in unpaid taxes. French authorities then advised the Government of Canada of, and provided the names to, 1785 of these Swiss bank accounts held by Canadians.

One of my questions was:

From the information received from the Government of France, would the Canadian Government provide the following:

How many identified Canadians with accounts outside of Canada have availed of the Voluntary Disclosure Program with the Canada Revenue Agency?

Your response to my questions was as follows:

The Canada Revenue Agency has an obligation to follow confidentiality and privacy legislation closely. Information is often provided to the CRA from various sources on the basis that it cannot be be further disclosed by the CRA. Where the CRA is at liberty to provide information it will endeavour to do so; in other instances, it will be limited in this ability.

In order to both respect confidentiality requirements and harmonious international relations, the CRA must adhere to the requirements that international tax treaties and agreements impose on the disclosure of information received from Canada’s treaty partners.

In the preamble to the above-noted question, it asserts that the information was provided to Canada from the Government of France. The information to which the question refers was received by the Government of Canada via an international tax treaty. As such, the information is protected under both the Exchange of Information article of the relevant tax treaty (in this case, Article 26 of the Canada-France Income Tax Convention) and paragraph 19.(1)(a) of the Privacy Act.

Therefore, for the reasons cited above, the information as requested cannot be shared.

You can imagine my surprise to find information I had requested – only to be told that disclosure of that information could endanger privacy, confidentiality and “harmonious international relations” – was suddenly available on the nightly news.

This information, according to the CBC, came from your office.

How do you and your Agency reconcile the withholding of information requested in Parliament with the inclusion of the very same information in a last-minute response to a media request?

This is a serious matter, and I await your response.

Sincerely,

Percy E. Downe
Senator

Encls.