Following passage of Bill C-61 (An Act to provide for the taking of restrictive measures in respect of the property of officials and former officials of foreign states and of their family members), Charlottetown Senator Percy Downe, Vice-Chair of the Senate Committee on Foreign Affairs and International Trade has renewed his call for further study of this important legislation. In a speech to the Senate delivered on final passage of the legislation, Downe said:

“Let us not labour under the illusion that Bill C-61 was subject to detailed review. The fact is that, out of respect for the Government concern that this bill be passed quickly, we acted more in haste than we would have otherwise. The Senate Standing Foreign Affairs and International Trade had only one meeting to debate the bill, but as with all legislation, the devil is in the details and this devil lives at the end of a road paved with good intentions.”

Downe highlighted in his remarks the recent comments of the Federation of Law Societies of Canada President Ronald J. MacDonald, QC, who in a March 18, 2011, letter to committee members stated:

“We are very concerned, however, that the broad disclosure requirement 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.”

Downe concluded his speech to the Senate by questioning the capacity of the Government of Canada to actually take any meaningful action to seize and freeze assets of officials and former officials of foreign states and of their family members.

If the government is counting on the Canada Revenue Agency, the recent experience has been horrendously bad.

In recent years, both the French and German Governments have provided the Canadian Government with information regarding hundreds of secret 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 is shocking and has led many Canadians to lose confidence in the Canada Revenue Agency’s ability to track down undisclosed funds. Who is the Canada Revenue Agency protecting?

Other 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 its citizens came forward, including many who – incorrectly – thought they were among those named as foreign account holders. The prospect of the heavy fines and prison terms meted out 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 a list of 106 Canadians was given to the Canada Revenue Agency by the German Government, not one of these Canadians who have hidden their money overseas has stood before a judge. Indeed, only 26 of the 106 Canadians have had their accounts assessed after 4 years,” said Downe.

Similarly, in 2009, French authorities received information about 80,000 bank accounts in Switzerland, approximately 8000 of which were opened by French citizens in order to avoid paying taxes owed to the French state. Since then, many French citizens have admitted to tax evasion and the government has recovered millions in unpaid taxes. Like their German counterparts, French authorities also advised the Government of Canada that some 1785 of these Swiss bank accounts are held by Canadians.

Unfortunately, if the Lichtenstein affair is any indication, with only 26 of the 106 cases reassessed in four years, that means that at the current speed, it will take the Canada Revenue Agency 274 years to conclude their investigation.

Clearly, if this is how the government goes after money owed to the Government of Canada, some further examination of how it would hunt down money owed to other governments would be warranted.

Downe concluded by repeating his earlier suggestion that the Standing Committee on Foreign Affairs and International Trade be tasked to undertake thorough study of this Bill, “None of us had even 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 requires.”

 

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For further information:
Senator Percy Downe: 613-943-8107
Or toll free at 1-800-267-7362   
www.sen.parl.gc.ca/pdowne

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