Hon. Percy E. Downe:

Honourable senators, I want to join a brief discussion on this bill as well. I thank Senator Andreychuk for her cooperation in working through this bill on short notice. She was able to arrange for the two ministers to appear before the committee. Given what is going on with the Minister of Foreign Affairs, that appearance was an amazing accomplishment and the members of the committee appreciate it very much.

I want to report back to the chamber that the Standing Senate Committee on Foreign Affairs and International Trade had a meeting on this bill. However, let us not labour under the illusion that this bill was given detailed review. Out of respect for the government's concern that this bill be passed quickly, we acted in more haste than we would have otherwise.

The Standing Senate Committee on Foreign Affairs and International Trade had only one meeting to discuss the bill. Honourable senators, I appreciate the need for this legislation, and I acknowledge the government's desire to pass this bill as quickly as possible. However, as with all legislation, the devil is in the details. This devil lies at the end of a road paved with good intentions.

This bill is meant to apply to circumstances where systems of government and, by extension, systems of justice are in a state of transition, perhaps even chaos. The prospect of a provisional government or some tribunal using this measure in a way we did not intend is a concern.

It is not hard to imagine a foreign government using this measure against a former official who has fallen out with the new government, or even against the friend or relative of such an official, regardless of whether the official in question is corrupt. If the Government of Canada believes that this request is legitimate, what then? How will this process of "freezing" and "seizing" work?

I hope that any foreign state requesting Canada's assistance in recovering the proceeds of corruption is able to provide detailed information, because the current government's record in finding hidden money is not positive.

The legislation does not state who will do the digging, but given the nature of the issue, one can expect the whole alphabet soup of agencies and programs. The Financial Transactions and Reports Analysis Centre of Canada, FINTRAC, the RCMP, the Canadian Security Intelligence Service, CSIS, and the Superintendent of Financial Institutions will all have an involvement in uncovering foreign assets.

Naturally, the first organization that comes to mind when discussing hidden assets is the Canada Revenue Agency. Uncovering hidden assets would appear to be the CRA's stock and trade. Unfortunately, the agency's record in this area has been horrendous.

For example, in recent years, both the French and German government provided the Canadian government with information about hundreds of secret bank accounts held by Canadians in Liechtenstein and Switzerland.

In the case of Liechtenstein, in the four years since the names of 106 Canadians with secret bank accounts was given to the Canada Revenue Agency, not one Canadian has been charged and not one penny has been assessed in fines.

Given that the accounts held by Canadians contained over $100 million, with $12 million in one account alone, this situation is shocking. It has led many Canadians to lose confidence in the Canada Revenue Agency's ability to track down undisclosed funds. I have had Canadians who follow this issue closely ask me who the Canada Revenue Agency is protecting.

Countries such as the United States and Germany have laid tax fraud charges on individuals for having undeclared bank accounts in tax havens.

In Germany, for example, in the year following the discovery of the accounts, hundreds of German citizens came forward, including many who thought incorrectly they were among those named as foreign account holders. The prospect of heavy fines and prison terms for tax fraud in Germany caused them to err on the side of caution and come forward.

In Canada, on the other hand, not one charge has been laid. In the four years since this list of 106 Canadians was given to the CRA by the German government, not one of these Canadians who have hidden money in tax havens has stood before a judge in Canada or overseas. Indeed, only 26 of the 106 Canadians had their accounts assessed after four years.

In 2009, French authorities received information about 80,000 bank accounts in Switzerland, 8,000 of which were opened by French citizens to avoid paying taxes owed to the French state. Since then, many French citizens have admitted to tax evasion, and their government has recovered millions of dollars in unpaid taxes.

Like their German counterparts, French authorities also advised the Government of Canada that some 1,785 Swiss bank accounts are held by Canadians. Unfortunately, if the Liechtenstein affair is any indication, the fact that only 26 of the 106 cases have been reassessed in four years means that the 1,785 Canadians who hold Swiss bank accounts will consume some 274 years of the Canada Revenue Agency's time to conclude their investigation.

Clearly, if this is an example of how the government goes after money owed to the Government of Canada, further examination of how it would hunt down money owed to other governments would be warranted. While I am not casting doubt on the testimony of our committee witnesses, we need to hear more testimony.

At its essence, Bill C-61 is a bill that was written quickly to respond to a specific problem, and it was expanded to become more general. Its full implementation, and where it fits among similar Canadian and international measures, needs to be examined.

Late last week, the Foreign Affairs Committee members received a letter from the Federation of Law Societies of Canada, which expressed concern about certain aspects of this bill:

We are very concerned . . . that the broad disclosure requirements in section 9 of the proposed legislation would impose duties on legal professionals that are contrary to the independence of the bar, the duty of loyalty and the protection of solicitor-client privilege.

Honourable senators, I repeat my earlier suggestion that the Standing Senate Committee on Foreign Affairs and International Trade be tasked with a thorough study of this bill. We had not heard of this bill three weeks ago, but we acceded to the government's desire to act quickly. Now we must act with deliberation and give Bill C-61 the consideration it deserves.

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