Dissenting Opinion - Family Trusts Scandal
Bloc Québécois
Institutionalisation of a shameless cover-up
Introduction
The tabling of this new report by the Liberal majority of the Public Accounts Committee on the family trusts scandal fits in directly with the government's cover-up of a financial and fiscal scandal unprecedented in Canada. The Public Accounts Committee should shed light on all of the obscure events surrounding the decision of December 23, 1991, leaving the technical part on necessary fiscal changes to the Finance Committee.
Following the uncovering of this scandal, many Liberal committee members displayed outrage at the actions of Revenue Canada and the Finance Department. The unruly Liberal MPs quickly fell into step with the government partisanship which is in every way trying to protect very, very highly-placed interests of which the financial implications are now evident.
No lack of integrity?
To justify its ineptitude and its lack of courage, the Liberal majority maintains that the Committee found no element for which to cast doubt on the integrity of bureaucrats involved in the making of this premature decision. (Majority Report, p. 5) Liberal MPs are being hypocritical and even naive in pretending to be able to pass judgement on the integrity of the bureaucrats involved. All of the Liberal MPs' actions during the Committee meetings were a shameless attempt to bury the affair by trying to conceal the facts.
How can they really pretend to be shedding light on this entire scandal? First of all, they refused to let the Committee fulfil its mandate. Then, they refused to let the Committee make use of all of its investigative powers. They also refused the Committee the right to hear from all of the bureaucrats involved. And finally, they allowed the Committee no more than two hearings on this scandal. Shedding all of the light? That was certainly the last thing the Liberal MPs had in mind.
However much the latter try to use the Auditor General's statements (Majority Report, p. 5) to back them up, they deliberately omit to point out that the Auditor General clearly specifies that his office has not conducted an inquiry particularly directed at questions of interference or lack of integrity. His office's inquiry was focused on the technical interpretation given to the interpretation request. (Public Accounts Committee, May 8, 1996 and October 2, 1996)
Now, the role of ensuring the integrity of the public service directly belongs to the Public Accounts Committee, as the guardian of governmental accountability. The Committee's Liberal majority clearly abdicated its responsibilities. In effect, the analysis of some testimonies before the Committee show the blind intentions made evident by the Liberal MPs.
Inconsistencies, inexactitudes, lapses and differing versions
More than a dozen inconsistencies, inexactitudes, lapses and differing versions have arisen throughout testimonies, notably by the Revenue deputy minister, a key player in the December 23, 1991 decision. In refusing to note one single example, the Liberal MPs have succeeded in institutionalising this scandal by placing at the government's service the sole parliamentary committee responsible for overseeing the machinery of government's accountability. Here are some examples of the Liberal majority's lack of courage and willpower:
- Firstly, a briefing note written on Sunday, December 22, 1991 by a Revenue Canada employee, on his own
initiative, rendered an unfavourable decision with respect to the taxpayer. In commenting on this famous note, the
Deputy Minister of Revenue let on that this briefing note was only a routine procedure in the event that an
unfavourable decision was rendered. (Public Accounts Committee, October 2, 1996) It turns out that this was the
first time that the Auditor General, for whom this note had great importance, had heard this explanation from
Revenue Canada, on that same day, during the Committee meeting. (Public Accounts Committee, October 2, 1996)
Yet, Revenue Canada and the Auditor General had been working together on this issue for months. The Liberals
made no mention of this in their report.
- Next, Revenue Canada usually refuses to render advance income tax rulings on past transactions. Now, the
Auditor General clearly revealed that Revenue Canada's decision dealt with past transactions. Even at the
Committee's last meeting, the differences between Revenue Canada and the Auditor General persisted. Once again,
no mention in the Liberals' report.
- As well, the Deputy Minister of Revenue acknowledged that fiscal effects of the advance income tax ruling
had not been evaluated. So Revenue Canada permitted the transfer of more than $2 billion to the United States
without any tax being paid, and without assessing the possible impact of such an important decision on Canada's tax
base. The Liberals refuse to include these serious lapses in their report.
- Furthermore, during the last meeting the Deputy Minister of Revenue swore that the waiver signed by the
taxpayer had no legal value, that he could not accurately trace the family trusts in the U.S.. All of these serious
lapses and acts place the Canadian tax base in peril. The Liberal majority closes its eyes and still makes no mention
of them in its report.
- Finally, on May 16, 1996, the Deputy Minister of Revenue indicated to the Public Accounts Committee that throughout the month of December 1991 he was aware of a debate over the advance income tax ruling of December 23, 1991. However, in his October 2, 1996 testimony before the same committee, the deputy minister indicated to us that he was only informed on December 20, 1991. Coincidentally, the version given on October 2, 1996 corresponded much better with the justification of the famous briefing note of December 22, 1991, which was tabled in committee that same day. Once again, the Liberals deliberately omitted this important detail in their report.
The only thing that is beginning to enlighten Canadians about the family trusts scandal is not what is not found in the Liberal MPs' report, but rather what has been intentionally omitted.
Government manipulation
Numerous other examples make the list of inconsistencies, inexactitudes, lapses and differing versions even longer. From the outset of the Committee's work, the Liberal majority, blatantly manipulated by the government, prevented the Public Accounts Committee from shedding light on the entire family trusts scandal.
The majority report is the crowning achievement in this blatant effort by the government to bury this scandal and to silence the truth in order to protect themselves. The government is trying in every possible way to prevent Canadians from knowing the whole truth about these fiscal and financial manoeuvres which have probably cost the Canadian tax system billions of dollars.
The Bloc Québécois MPs also question the attitude of the Deputy Minister of Finance, David Dodge, who in verbally attacking the Auditor General during the Committee's last meeting, overstepped all rules of respect. His unacceptable and disrespectful behaviour demonstrates the government's arrogance towards one of our parliamentary system's most important institutions.
Recommendation
It is shameful and, unfortunately for the government, it is far from over. That is why with this dissenting opinion we, the Members of the Bloc Québécois, make the following recommendation:
- That a special commission of inquiry be set up, independant of the government, with the
mandate to shed light on all of the events surrounding the December 23, 1991 decision and
the subsequent use of this tax loophole by other rich Canadian families.
Conclusion
Without an impartial and independant inquiry into all Liberal government partisanship, this scandal will never be brought to light. And if the government has nothing to hide, no one to protect and
nothing to reproach itself as it pretends, what is preventing it from setting up such a commission of inquiry which would certainly clear it of any blame. At least, that's what the government has been repeatedly telling us for six months!
Michel Guimond, M.P.
Yves Rocheleau, M.P.
Pierre de Savoye, M.P.