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Serge Joyal

The Hon. Serge  Joyal, P.C., O.C., O.Q., B.A., LL.L., D.E.S., LL.M. Appointed to the Senate by the Rt. Honourable Jean Chrétien, Senator Serge Joyal represents the province of Quebec and the Senatorial Division of Kennebec. He has served in the Senate of Canada since November 26, 1997.

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Tough Talk – No Action – On Overseas Tax Evasion

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Posted on 07 March 2012

“National Revenue Minister Gail Shea is continuing the same policy of tough talk and inaction as her predecessors when it comes to overseas tax evasion,” says Charlottetown Senator Percy Downe.

Not one Canadian with secret overseas bank accounts in Liechtenstein or Switzerland has been charged years after their names were provided to the Government of Canada; yet, Minister Shea talks of the “great strides” her Agency is making in response to questions about this Government’s failure to clamp down on Canadians who illegally hide their money in foreign bank accounts.

In doing so, she joins former National Revenue Ministers, and even the Prime Minister, who made bold claims about their phantom efforts to combat the problem.

  • Her immediate predecessor, Keith Ashfield, boasted that they are “cracking down harder than ever on Canadians who are not paying their taxes.” (Oct. 8, 2010)
  • His predecessor, Jean-Pierre Blackburn, said of tax cheats, "People realized that it's a question of time before we get them," (…) "I tell them, 'We'll get you, we'll find you.'” (Dec. 3, 2009)
  • Even the Prime Minister got into the act, promising in the House of Commons in 2010 that “If Canadians are using Swiss bank accounts to avoid paying taxes in Canada, those people will face the full force of Canadian law.” (Sept. 30, 2010)

Unfortunately for law abiding Canadians, what happens to overseas tax cheats falls far short of the “full force of Canadian law.”

The Canada Revenue Agency website has page after page of Canadians who tried to avoid paying their taxes within Canada and were subsequently charged, convicted, and in some cases, even served jail time. So why has not a single charge been laid against overseas tax cheats? Who is being protected? Why the sweetheart deal for Canadians hiding money in tax havens? Why is the Federal Government all talk and no action?

“By failing to name and prosecute those Canadians who do cheat on their taxes by hiding money overseas, this Government is failing to live up to its own rhetoric, and Gail Shea maintains a legacy of tough talk and inaction that Canada quite literally cannot afford,” concluded Downe.

Backgrounder on Overseas Tax Evasion

  • Although it may seem obvious, the importance of the Canada Revenue Agency to our nation's well-being cannot be overstated. Last year alone, the CRA handled $388 billion in government revenue (2010-2011 CRA performance Report).

  • As a result, it is essential that CRA and the Minister responsible for it must be held to the highest account, including thorough Parliamentary oversight. It is every bit as important to see that Canadians' tax dollars are properly raised as it is to see that they are properly spent.

  • Recent media reports raise concerns about current practices at CRA, both in terms of general day-to-day operations and (in particular) the issue of foreign tax evasion by Canadians.

  • The cases of banks in Liechtenstein and Switzerland are illustrative of this Government's attitude toward overseas tax evasion. In both cases information about Canadians with money hidden in foreign bank accounts - many containing millions of dollars - were served up to Canada on a silver platter by friendly foreign governments. When the matter became public, the Government was full of tough talk about retrieving the monies owed and punishing the guilty parties.

  • So far, the results have failed to match the rhetoric. Answers to questions in Parliament and other public documents indicate that the amount of money recovered is disappointingly low. And as far as punishing the guilty goes, no one has been charged, yet alone convicted of tax evasion in these affairs.

  • If these people are never formally charged, how will we ever know their names? Why are these people not being named and shamed? The Government is in the process of distributing some sixty thousand Queen's Diamond Jubilee Medals. How can we be sure an overseas tax cheat is not receiving this honour?

  • An internal audit of CRA indicated that investigators tend to direct their attention toward the "low hanging fruit" - relatively simple cases of tax evasion, usually domestic in nature (CHECK) - with their promised quick and simple (albeit small) victories, rather than the larger, more complex cases, as one would inevitably describe foreign tax evasion. What sort of message does this send?

  • Canadians who keep their money in Canadian banks pay the full measure of taxes they owe. Why should Canadians who keep their money overseas get special treatment?

  • Tax fairness, like all kinds of justice, must be seen to be done. Law-abiding Canadians who pay their fair share expect no less. And this Government owes them no less.

-30-

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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