Tory critic wants a reluctant CBC to hand over Panama Papers

The Conservative Party’s national revenue critic is calling on the CBC to hand over its Panama Papers data to Canada’s tax agency, something the Crown corporation is refusing to do. Ziad Aboultaif (Edmonton Manning, Alta.) says information coming out of a mammoth leak of documents detailing a global transfer of wealth into offshore accounts is fair game for the Canada Revenue Agency to demand. “If someone says, especially the media, ‘I have something,’...I think they have to back it up,” Mr. Aboultaif told The Hill Times in an interview. “Maybe they have information the CRA doesn’t have, and the CRA is asking for details, and I think they have the right to do so.” The tax agency has formally asked the CBC to hand over the information, the broadcaster reported April 11, but the CBC is refusing, saying it does not reveal its sources and pointing to a similar request in 2013 that it also rejected. Mr. Aboultaif said press freedom can’t always trump the public interest. “ it has to do with the public, public issues...I think they need to back it up,” he said. There are 350 Canadians in the database leak, CBC has said, citing an unspecified report. News articles indicate that the information in the leak comes from Panamanian law firm Mossack Fonseca. The Hill Times has not seen the documents and cannot independently verify the information. The International Consortium of Investigative Journalists is working with two Canadian news outlets, the CBC and the Toronto Star, as well as others around the world to process the cache of records into news stories. The consortium has already rebuffed requests to release the data en masse, stating that while the Panama Papers reveal questionable activity by politicians, banks and celebrities, “other parts of the data are of a private nature and of no interest to the public.” One concern is that offshore accounts aren’t necessarily illegal as long as the money is disclosed to the relevant tax authorities when necessary. CRA officials to attend Paris meeting Canada Revenue Agency officials will travel to an OECD meeting in Paris on April 13 to discuss the fallout from the Panama Papers, according to the office of National Revenue Minister Diane Lebouthillier (Gaspésie-Les Îles de la Madeleine, Que.). The leak is already shaking up global politics, with Icelandic Prime Minister Sigmundur Gunnlaugsson stepping down as controversy swirled around his offshore holdings, and British Prime Minister David Cameron facing calls for an inquiry. Reports indicate the Royal Bank of Canada has also been named in the documents. The bank says it has “established controls, policies and procedures in place” to detect and prevent tax evasion. In Ottawa, Ms. Lebouthillier outlined the agency’s plan to put to work the $444.4 million over five years that her government had already introduced in Budget 2016 to “crack down on tax evasion and combat tax avoidance.” “Most middle-class Canadians pay their fair share of taxes, but some wealthy individuals avoid taxes by hiding their money in offshore tax havens. This is not fair, and it needs to change,” Parliamentary Secretary to the Minister of Finance François-Philippe Champagne (Saint Maurice-Champlain, Que.) told reporters April 11. The CRA will be using the money to better examine whole jurisdictions, starting with the Isle of Man. The Crown dependency in the Irish Sea saw $860 million in electronic transfers in a 12-month period, said Mr. Champagne. The CRA’s choice of the Isle of Man as their first jurisdiction-wide target is notable as it is the same location named in another CBC investigation of the tax agency and auditing firm KPMG. Other government initiatives include hiring extra auditors and specialists to go after “high-risk” individuals, and setting up an “independent offshore compliance advisory committee” to advise the minister and the CRA on “future strategies,” said Mr. Champagne. The Liberal Party committed in its election platform to direct CRA “to immediately begin an analysis and stronger enforcement of tax evasion.” Tax expert doubts effectiveness The $444.4 million is the “largest single investment in the agency’s history,” said Mr. Champagne. He predicted the agency will “identify and recoup $2.6 billion in unpaid taxes over five years.” Others aren’t so convinced. University of Ottawa law professor Vern Krishna said more money for the CRA won’t necessarily help Canada track down tax dodgers. “The question is not giving them economic resources, the question is how they’re going to use that money to step up their tax avoidance initiatives, and whether they will use it effectively and efficiently depends upon factors that are not necessarily within their control,” he said in an interview. Mr. Aboultaif called the government’s investment into an offshore tax evasion crackdown an “aggressive” move, and while he said he believes it is a legitimate use of public resources, he also cast doubt on the return on investment. “$444 million is a big number, it’s not a small investment. How much are you going to get back?" said Mr. Aboultaif. "The problem is you cannot anticipate how much money you will make out of such an investment.” news@hilltimes.com The Hill Times Clarification: This text has been amended to account for new information received from the minister's office after publication that Mr. Champagne misspoke when he said the minister would travel to Paris. The office said he actually meant to say the minister would be working alongside her officials as they attend the Paris meeting.