Harper says those dodging taxes with foreign accounts will face the law

The Canadian Press ~ The News
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OTTAWA — Prime Minister Stephen Harper says anyone using a Swiss bank account to evade taxes will face the full force of the law.

Harper’s commitment Thursday in the House of Commons followed a pledge by the Canada Revenue Agency to audit more than 1,000 foreign bank accounts linked to Canadians in Switzerland in a crackdown on off-shore tax evasion.

“If there are Canadians that have bank accounts in Switzerland in order to avoid paying taxes in Canada, these citizens will have to deal with all the force of the Canadian law,” Harper said.

National Revenue Minister Keith Ashfield said France has shared information about Swiss accounts held by Canadians.

“We know that most Canadians pay their taxes and play by the rules. That’s why we are taking aggressive action to recover money owed to Canadians,” Ashfield said in a statement.

The Canada Revenue Agency confirmed Thursday it is now auditing the largest of 1,000 HSBC bank accounts linked to Canadian taxpayers. After those accounts are examined, the remaining accounts will be reviewed.

Eventually all accounts that are linked to Canadian taxpayers will be reviewed, it said.

CBC News and the Globe and Mail reported Wednesday that the Canadian government obtained a list of nearly 1,800 offshore bank accounts belonging to Canadians that turned up during an international probe into possible tax evasion.

The accounts at HSBC Private Bank in Geneva are part of a larger list of about 80,000 accounts that a former bank IT security specialist passed on to French investigators, the report said.

HSBC pledged Thursday to co-operate with authorities and protect its clients, all of whom the bank maintained were the victims of a crime committed by its former employee.

“HSBC would like to make it clear that HSBC Private Bank (Suisse) SA and its clients are the victims of a criminal act,” Jezz Farr, the bank’s chief spokesman for media relations, said in a statement.

“The theft was perpetrated by a former IT employee about three years ago and involves approximately 15,000 existing clients around the world who had accounts with the bank in Switzerland before April 2007,” Farr added.

“HSBC in no way condones tax evasion and is co-operating with authorities while protecting the rights of our clients to confidentiality.”

In Ottawa, the revenue agency said it was working closely with international partners, through “the increased flow of information under its tax treaties.” Canada was co-operating with the Organization for Economic Co-operation and Development, the Seven-Country Working Group on Tax Havens, and the Joint International Tax Shelter Information Centre.

“Not reporting income from foreign sources is illegal. Tax recovery continues to grow as a result of the CRA’s international efforts and audit processes. The CRA is committed to continuing collaborative work to protect Canada’s tax base,” the revenue agency said in a statement.

The revenue agency said that in the last year it had found more $1 billion in federal taxes owed by Canadian taxpayers hiding assets abroad.

It says another $138 million in unpaid taxes was found through a voluntary disclosure program.

The Conservatives still faced tough questions in the Commons about their commitment to chasing Canadian tax evaders on foreign soil.

“We are talking about millions of dollars that are slipping through the government’s fingers,” Bloc Quebecois Leader Gilles Duceppe said. “The government must punish these white collar criminals that are preventing it from having millions of dollars.”

The Bloc also questioned the wisdom of the government negotiating a free trade agreement with Panama, a noted tax haven, and sought assurances that it would agree to share tax information with Canada in the future.

International Trade Minister Peter Van Loan told the Commons that Panama has agreed to follow OECD rules on sharing tax information.

NDP Leader Jack Layton told the Commons that Statistics Canada estimates that Canadians have stashed $88 billion in off-shore accounts.

“Think of what the fair taxation of that revenue could do to provide affordable medications to families, decent pensions, maybe some EI help to people who are out of work. But instead, what we see is no action,” Layton said.

Layton said a study by the University of Quebec at Montreal found that said the five major Canadian banks have used tax havens to avoid paying $16 billion in taxes.

“The government is doing nothing to eliminate the curse of tax evasion. Where is their law and order agenda when it comes to the big banks and those who avoid paying taxes?”

Organizations: Canada Revenue Agency, HSBC Private Bank, International Trade HSBC House of Commons Commons CBC News Globe and Mail Suisse Organization for Economic Co Country Working Group on Tax Havens Bloc Quebecois OECD Statistics Canada University of Quebec

Geographic location: Canada, Switzerland, OTTAWA France Geneva Panama Montreal

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Recent comments

  • Bill
    October 02, 2010 - 11:11

    Would this not include punishing Canadian companies who register large cargo ships, barges, and other expensive vehicles in Bermuda? I would think that this would be an effort to avoid paying Canadian taxes... But then again, I may be wrong. It seems that the laws are easily confused, or blurred, when you have large bank accounts.

  • critisize
    October 02, 2010 - 06:07

    lock em up