Mr. Speaker, I believe, at this stage of the proceedings, I am asking a question of my colleague, the Minister of National Revenue, involving a matter that has been of great concern.

It first arose in my riding of Victoria, when in 2000 a very wealthy family purchased a tax product sold to them by the firm KPMG. In May, I asked the Minister of National Revenue whether the government would bring criminal prosecution against those individuals implicated in the Isle of Man tax evasion scheme and against KPMG, the firm that conceived and managed the tax evasion at issue.

The continuing refusal to answer that question in the House or in the finance committee hearings, I submit, is deeply eroding Canadians' faith in the integrity of our tax system.

This problem is enormous. Billions of dollars are lost each year to tax havens. Many people in my riding and across the country are saying that we have created a two-tier system, one standard for regular people who pay their taxes and play by the rules, and another standard for the wealthy and well-connected.

I submit that this particular case involving KPMG and the Isle of Man is a textbook example of how that works.

Of course, there are many other stories that bring this into context. In 2007, there was a leak from the Liechtenstein LGT Bank that revealed 106 accounts held by Canadians. The Canada Revenue Agency identified $22.4 million in taxes owing, and took six years to recover merely $8 million, less 30% of what was owing.

In 2008, the Swiss UBS AG Bank leak revealed that there were 4,450 accounts, including a number from Canadians. The CRA identified $87 million in unreported income, but has not yet reported collecting any of it.

There is a very poor record of enforcement. Let me quote Professor Arthur Cockfield of Queen’s University faculty of law, who said the following in a Globe and Mail editorial, and who has of course testified to like effect recently at the finance committee:

To the best of our knowledge, the CRA has not had a single successful prosecution of international tax evasion in the past 10 years.... These cases may have an international dimension such as assets maintained offshore, but the actual prosecution was purely for domestic offences, and not the crime of offshore tax evasion.

My question is as follows. What is the government doing to proactively deter these kinds of schemes? Ordinary Canadians are tired of sweetheart amnesty agreements and secret settlements. We saw an amnesty agreement in the KPMG situation, no matter what the government chooses to call it.

Will firms that devise these schemes face fines large enough to actually deter them? Will their lawyers and accountants be held responsible for facilitating large-scale tax evasion? What is the government doing to change the paradigm from belated slaps on the wrist to effective deterrents?

Murray Rankin

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