The Minister in charge of the Canada Revenue Agency is scheduled to appear before the Finance Committee on Thursday, May 19 to answer questions about the agency's handling of the KPMG file. That well publicized case included a secret amnesty for wealthy clients and no prosecution for the creators of the Isle of Man scheme.
Word is that MPs will also be grilling her on specific plans to spend the $444Million that has been allocated to her department to fight tax dodging. At a media conference last month Diane Lebouthillier repeated her talking points that tax avoiders should watch out - that the CRA had them in their sights. But she has continued to be vague on details both on how to bring the KPMG case to closure. There is also interest in some detailed plans for how to rehabilitate the offshore investigations unit which has been repeatedly cut, re-organized, renamed and cut again.
Here are some questions for which Canadians would like answers:
1. What is the Minister going to do now about the KPMG case?
Lebouthillier has said the CRA is going to go after facilitators of tax evasion - the lawyers and accountants who dream up these schemes and profit big-time. But there seems little evidence of that so far. Profitting from tax evasion schemes is a crime. And any firms found guilty of doing so would be banned from getting government contracts. If she is serious about pursuing facilitators it could put a chill on that activity.
In the KPMG case, there would appear to be sufficient evidence to warrant a criminal investigation. But many details remain a mystery because of a secret deal between KPMG and the CRA. Launching this investigation enables the government to get a search warrant and seize evidence including the names of the clients of the Ile of Man tax scam. Listen for a committment that the CRA will launch a criminal investigation of the KPMG Ile of Man tax scam and apply for a search warrant to get further evidence in the case. If you don't hear it, then nothing much has changed in the Minister's office.
2. Would the Minister support an investigation by the Public Sector Integrity Commissioner into allegations of political interference in the KPMG case and in other cases were audits were stopped, or special deals offered?
There have been numerous media reports questioning the easy access KPMG had with the highest levels of government including the Prime Minister and cabinet ministers. And our report, What’s Wrong at the CRA? And How to Fix It quoted numerous CRA auditors in their suspicions about political interference around decisions to suspend or abort criminal investigations of politically connected companies or wealthy individuals. It sounds like a case that would qualify for an independent investigation by the Public Sector Integrity Commissioner. Canadians - inside and outside of government - would like to know if the Minister would encourage CRA staff to act. If they have evidence of possible political interference or wrongdoing in the KPMG case - or any other tax cases - would she support disclosure of their concerns to the Public Sector Integrity Commissioner?
3. What is the status of information of other leaked tax evasion data?
The PanamaLeaks weren't the first data leak. They likely won't be the last. The minister's appearance is an opportunity for her to update Canadians about any prosecutions as a result of information about Canadian tax dodgers using Liechtenstein - information that is almost six years old. Or data received in the Luxembourg Leaks. After years of cuts is there capacity to deal with those cases? Or was the decision made to walk away and just concentrate on Panama? There is little to no information about any of these cases on the CRA website - fondly known as the Wall of Shame. What's the deal?