Politics

CRA executives decline to answer KPMG questions before finance MPs

A House of Commons committee moved today to request that accounting firm KPMG provide documents related to a multi-million dollar tax dodge set up in an Isle of Man, as well as names of KPMG employees responsible for the "development and marketing" of the scheme, by May 18.

Compliance manager Stephanie Henderson won’t confirm signature on leaked document

MPs on the Commons finance committee agreed Thursday to request documents from KPMG along with the names of employees involved in the marketing of a tax scheme on the Isle of Man. An NDP motion that would have compelled the company to reveal the information along with client names failed to pass.

A House of Commons committee moved today to request that accounting firm KPMG provide documents related to a multi-million dollar tax dodge set up in an Isle of Man, as well as names of KPMG employees responsible for the "development and marketing" of the scheme, by May 18.

The motion to get more information about the KPMG tax scheme came after testimony Thursday from three Canada Revenue Agency executives, including Commissioner Andrew Treusch and offshore compliance manager Stephanie Henderson, all of whom testified that for legal reasons they were not permitted to answer any questions about their secret settlement offer to KPMG clients.

The offer, leaked to CBC News in a brown envelope, had CRA itself demanding the KPMG clients not talk about the offer in public.

Henderson, whose signature adorns the leaked copy of the agreement sent to CBC News, declined to even confirm whether she had signed the document.

Stephanie Henderson, Canada Revenue Agency's offshore compliance manager, told a Commons committee that for legal reasons she could not answer questions about a deal reached with clients of KPMG. Henderson was one of three CRA officials testifying Thursday. (CBC)

"Although the signature appears to be my signature, I can't confirm the source of the information on the [CBC] website, so therefore I cannot confirm the origin of the document and whether it would be mine or not," she said.

On several occasions during the questioning, CRA's legal counsel explained a clause in the Income Tax Act prevents them from discussing the settlement offer.

Treusch, the CRA commissioner, testified he objected to the use of the word "amnesty" to describe the settlement offer, which he could not confirm was made in the first place. The document leaked to CBC News promises the KPMG clients "no penalties" for the years they were involved in the scheme that the CRA alleged "intended to deceive" the minister.

"I call it amnesty because in the dictionary, it says it's a legislative act that retroactively eradicates the punishable character of an act," said Pierre-Luc Dusseault, NDP national revenue critic.

CRA's assistant commissioner, Ted Gallivan, while not addressing the KPMG offer, said the agency would enter into "that kind of agreement" due to the belief of legal risk, "first that we would not obtain the identity of the participants, secondly that our tax assessment could be challenged and may not stand up in court," he said.

While not commenting on the agreement itself, Gallivan said that the document on the CBC website did not rule out prosecution for the wealthy KPMG clients.

NDP complains of missed opportunity

That statement prompted NDP Leader Tom Mulcair to call in the House of Commons Thursday for criminal charges against KPMG accountants and their clients involved in the scheme.

NDP Leader Tom Mulcair said Thursday in the House of Commons that the government should pursue criminal charges against KPMG and its clients over a tax scheme revealed by leaked documents. (Adrian Wyld/Canadian Press)

However, the wording in the document leaked to CBC News specifically states the offer was a "final and complete settlement" with regard to the "consequences" for taxpayers involved in what the CRA has called a "sham."

An earlier NDP motion, which had called for the committee to "compel" KPMG to produce documents and names of clients, did not pass. 

NDP MP Guy Caron, vice-chair of the committee, said MPs missed an opportunity to find out what really happened.

"Do you want to let it just slip away so eventually people forget about it? Or do you want to use the committee's power and ultimately the powers of the House for public ends to ensure that taxpayers and citizens are well-represented and well-defended? That's the government's choice," he argued, before losing the motion.

Revenue Minister Diane Lebouthillier is scheduled to testify before the committee on May 19.

now