Submission to the House of Commons Finance Committee meeting on Bill C-86 by Canadians for Tax Fairness Executive Director Toby Sanger on 6 November 2018. The act as later passed is available on the federal government’s website.
There are many positive initiatives in The Canadian Gender Budgeting Act (Bill C-86) that we are very supportive of, but we are concerned that too many seem half-finished and will not have adequate time for review and further development. The reports and the analysis on the gender and diversity impacts of the budget, of tax expenditures and programs, could be so vague and general to be meaningless.
Bill C-86 includes many amendments to a wide range of taxation and financial industry legislation. These are complicated areas with significant implications and so should be accorded adequate time for review.
Bill C-86 also includes corrections to previous omnibus budget bills. This indicates that pushing through these massive omnibus bills without sufficient due consideration isn’t a wise thing to do—because mistakes are bound to be made.
STRONGER MEASURES NEEDED
We appreciate the targeted amendments in Part 1 to prevent aggressive international corporate tax avoidance in specific circumstances, but we also need additional far-reaching measures to reduce aggressive tax avoidance and evasion.
The Bill includes 65 pages with amendments to the Bank Act and related acts on financial consumer protection. The issue of protection of financial consumer information is certainly in the news and a reasoned discussion on this issue would certainly be welcome. This section also includes provision for the protection of whistleblowing. One concern is that the definition of “wrongdoing” in this section is too narrow, just applying to contraventions of the Bank Act and bank policies. There’s no guarantee of any follow up with these reports. And as a reminder, one of the first whistleblowers who revealed tax evasion by the UBS bank to US authorities was himself sent to jail for 40 months in the US.
It is great to see that the government appreciates the importance of having a registry of individuals with significant control of corporate entities to help prevent money laundering, terrorist financing, and other criminal activities. However, the amendments on pages 134-39 to the Canada Business Corporations Act are far too limited and restrictive. The provisions in this section would result in information that is inadequate, unreliable with no requirements for verification, and not timely enough for law investigation and enforcement purposes. These amendments could actually undermine whistleblowing and protect criminals.
PROPOSED IMPROVEMENTS
The legislation should explicitly require corporations to make access available to reporting entities and other parties who require it for regulatory, legal and enforcement purposes.
There should be a provision for summary indictable offences and fines and not just criminal convictions.
The registry framework also needs to be digital forward to increase efficiency and reduce costs of compliance.
Ultimately, we need a central public registry of beneficial owners for all corporate entities as has been established in the UK.
CONCLUSION
There are a lot of positive and worthwhile initiatives in this bill. But it can be noted that the government is not doing justice to the legislation, or to the legislature, by cramming them all into one piece of legislation without enough time for reasoned review by the legislature and experts.
Something that can be put into consideration is, if you're going to build something, do it right the first time, so you have something that works well—and you don’t have to come back to fix it again.
{Photo by Michelle Spollen on Unsplash}
