Question Period Note: COMBATING TAX EVASION AND TAX FRAUD

What is the Canada Revenue Agency doing to combat tax evasion and tax fraud?

• The Government is committed to protecting the integrity of the Canadian tax system by combating tax evasion and tax fraud in Canada
and abroad.

• The Canada Revenue Agency (CRA) investigates suspected tax evasion and tax fraud, and where appropriate, refers cases to the Public
Prosecution Service of Canada for criminal prosecution.

• As of March 31, 2021, there are 52 ongoing cases with an offshore element.

• Also as of March 31, 2021, more than 30 complex criminal investigations are underway related to cases with over $1 million in potential
tax evaded, and having an offshore or money laundering element.

• From April 1, 2020, to March 31, 2021, there were 36 convictions, with Court imposed fines totalling $5,172,844. Out of the 36 convictions,
15 taxpayers were sent to jail for a total of 26.2 years.

• Canada works with tax administrations from around the world to fight tax evasion and tax fraud. For instance, Canada is part of a joint
operational alliance, the Joint Chiefs of Global Tax Enforcement (J5), to increase collaboration in the fight against international and
transnational tax crime and money laundering.

Combatting tax evasion is important for the protection of Canada's tax base. The Canada Revenue Agency's (CRA) compliance efforts ensure that taxpayers maintain their confidence and trust in the Canadian tax system by fairly administering Canada's tax laws.

Tax evasion and tax fraud are illegal and deprive Canadians and governments of public funds, which are essential to supporting critical infrastructure projects and important social programs and services like health care, child care, and education.

Those who do not fully comply with tax laws place an unfair burden on law-abiding taxpayers and businesses. To ensure that the tax system is fair for everyone, the CRA makes sure that people who try to evade paying their fair share of taxes are held accountable. Tax evasion has serious financial consequences. Being convicted of tax evasion can lead to fingerprinting, court imposed fines, jail time, and a criminal record.

International tax evasion and tax fraud are global problems that require global solutions. Data leaks like the Pandora Papers and recent Budget investments in data and reporting, such as electronic fund transfers, the Common Reporting Standard, and Country-by-Country Reporting, provide useful insights and ensure that the CRA has many resources at its disposal to ensure non-compliance is identified and addressed. The CRA intends to analyze the data very carefully once it becomes available, and review anyone who appears to have not met their tax obligations. Canada is part of one of the most extensive tax treaty networks in the world; we participate in over 96 tax treaties and 24 international tax information exchange agreements. These exchanges and networks allow for better tax transparency and international co-operation.

Regarding offshore tax havens, the CRA continues to develop tools to improve its focus on high risk taxpayers. Collaboration with international partners is crucial to finding and taking action against those who avoid and evade paying their fair share of tax.

The Joint Chiefs of Global Tax Enforcement (J5), comprised of Australia, Canada, the Netherlands, the United Kingdom and the United States, was formed in June 2018 in response to the Organisation for Economic Co-operation and Development’s (OECD) call to action for countries to do more to tackle the enablers of tax crimes. The CRA plays a key leadership role in the J5 and works closely with the OECD and other countries and organizations to fight against those who commit, promote, and enable international tax crimes, money laundering, and cybercrimes through the use of cryptocurrencies.

The CRA is also a member of the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC). JITSIC brings together 42 tax administrations that have committed to working in a strategic and collaborative way in dealing with international tax evasion.

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