June 14, 2011

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

Dear Minister Shea:

Let me begin by congratulating you on your appointment as Minister of National Revenue. It comes with a great responsibility and I wish you all the best.

The importance of the Canada Revenue Agency (CRA) is obvious. Every government activity and program depends upon revenue to function. As a result, how CRA performs its duties is an important issue, deserving of informed scrutiny from Parliament and Canadians as a whole.

As Canadians read news stories about offshore bank accounts, they want assurances from their government that in tax matters, they are all being treated equally. Unfortunately, CRA has not always been particularly cooperative in ensuring the Canadian public that such informed scrutiny is taking place. While mindful of the need for confidentiality and privacy involving cases of general tax enforcement policy, I also believe that openness and transparency are vital if Canadians are to be assured that everyone is paying their fair share of taxes.

An example of difficulties regarding CRA information sharing is my recent experience in inquiring about ongoing investigations of tax evasion. In early 2007, the Government of Canada received information about Canadians with funds held in secret accounts in a bank in Liechtenstein. In October of last year, in response to a question about the matter and CRA’s handling of it, the Agency was comparatively forthcoming, providing detailed answers. However, a few months later, when asked essentially the same questions about a similar case involving a bank in Switzerland, the CRA responded that they “do not capture the information in the manner provided” and thus are “unable to provide a detailed response”. I have decided to try again, and am enclosing the latest version of this question.

Let me emphasize that I am not seeking personal information, or anything that would jeopardize ongoing investigations. Instead, the purpose is simply to satisfy Canadians that their government is acting forcefully on tax evasion and that all taxes owed to Canada are paid.

Canadians may well wonder why this cloak of secrecy at the CRA exists and who is being protected. In the case of Liechtenstein, no fines have been imposed. That is because not one charge has been laid. In the four years since this information has come to light, not one of these Canadians who have hidden their money overseas have stood before a judge, in Canada or overseas; yet, countries such as the United States and Germany have laid numerous tax fraud charges on individuals for having undeclared bank accounts in tax havens.

I call upon you to make the Canada Revenue Agency more open and forthcoming, so that Canadians can be assured that all citizens are paying the taxes that they owe, and that no special deal exists for Canadians with secret accounts overseas. To that end, I would like to receive answers to the enclosed questions. Your leadership on this matter would be greatly appreciated.

Again, I congratulate you on your appointment and look forward to working with you in the future.

Sincerely,

Original signed by

Percy E. Downe
Senator

Encl.

Questions for the Minister of National Revenue
Hon. Gail Shea, PC, MP
June 13, 2011

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.

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

A. How many Canadians have been identified as having undeclared bank accounts outside of Canada?

B. Could the Government of Canada summarize what action, if any, has been taken by Canadian officials to recover unpaid taxes associated with Canadians' undeclared bank accounts outside of Canada?

C. How many identified Canadians with accounts outside of Canada have availed of the Voluntary Disclosure Program with the Canada Revenue Agency (CRA)?

D. How many identified Canadians with accounts outside of Canada have settled with the CRA?

E. How much money, including unpaid taxes, fines, etc., has the CRA assessed as a result of investigating these secret bank accounts outside of Canada?

F. Regarding Question E.,  what is the breakdown of the money assessed from the cases, specifically:

a) in unpaid taxes;

b) in interest;

c) in fines; and

d) in penalties?

G. How much of the money has been collected?

H. How many of these cases are under appeal?

I. How many cases remain open?

J. How many more cases does CRA anticipate will be opened?

K. How many of the cases have been closed, i.e. the full amount of taxes, interest, fines and penalties have been collected?

L. How much money has been collected from those cases;

a) in unpaid taxes;

b) in interest;

c) in fines; and

d) in penalties?

M. How many of the account holders in the cases have made partial payment?

N. Of the partial payments made:

a) What was the largest amount?

b) What was the smallest amount?

c) What was the average amount?

O. With regard to the amount of money contained in the accounts declared or discovered by the CRA:

a) What was the largest amount?

b) What was the smallest amount?

c) What was the average amount?

P. On what date was the CRA first made aware of the names of Canadians with accounts outside of Canada that were supplied by the Government of France?

Q. On what date did CRA begin its investigation?

R. On what date did the first audit of an individual account holder begin?

S. Of the original identified Canadians with bank accounts outside of Canada, how many individuals have had these accounts audited, reassessed or been the subject of compliance action?

T. How many of the account holders have not been audited, reassessed or been the subject of compliance action?

U. How many tax evasion charges were laid?