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Standing Committee on Finance
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EVIDENCE
Thursday, March 21, 2013
[Recorded by Electronic Apparatus]
[English]
I call this meeting to order. This is meeting number 111 of the Standing Committee on Finance.
Orders of the day are pursuant to Standing Order 108(2), continuing our study of tax evasion and the use of tax havens.
We're
very pleased to have six witnesses before us this morning. From BMO
Bank of Montreal, we have vice-president and senior consultant, Mr. Jean
Richard.
We have from the Canadian Imperial Bank of Commerce, Mr.
Steven Blackburn, vice-president and chief anti-money laundering
officer. From HSBC Bank Canada, we have Mr. Scott Bartos, senior
vice-president and chief compliance officer. From RBC Royal Bank, we
have Mr. Russell Purre, deputy chief anti-money laundering officer. From
Scotiabank, we have vice-president Nanci York. From TD Bank Financial
Group, we have the head of global anti-money laundering compliance,
Carmina Hughes.
Welcome
to all of you. Thank you so much for being here this morning. We will
proceed in the order I introduced you. We'll have each witness present
an opening statement of five minutes, and then we'll proceed to members'
questions.
We'll begin with Mr. Richard, s'il vous plaît.
[Translation]
Distinguished
members of the committee, Mr. Chair, on behalf of BMO Financial Group,
I'm pleased to join my colleagues from other financial institutions to
assist in your discussion of tax havens and tax evasion. As you know, my
colleagues from the other financial institutions mainly focus on this
issue from a perspective of Canadian and international compliance.
I
offer a different kind of expertise, which concerns our financial
institutions wealth management advisory relationship with its individual
clients who have domestic, national and sometimes international
financial interests.
As
you have already heard from the Canadian Imperial Bank of Commerce, the
CIBC, and as you will hear from my other colleagues at the table, BMO,
just like the other financial institutions, does not advise clients to
fraudulently avoid the payment of tax, either in Canada or elsewhere.
And of course, just like any other Canadian bank, we have policies and
procedures that ensure that our employees comply with both the letter
and spirit of the law they are subject to. My colleagues will be able to
discuss that with you. That is why we believe it is important to tell
you about the services we provide for our clients.
First,
we are aware that as a financial institution, we must not give our
clients legal or tax advice. We recognize that advice of that kind falls
exclusively within the realm of the private practice of law and tax
consultancy, a practice that is limited to lawyers and accountants. Only
law firms and accounting firms may give opinions to their clients, be
they private individuals, corporations or public organizations.
We
therefore never give our clients opinions on legal or tax matters. Our
role relates to the management of our clients' high net value estates
and focuses on matters relating to their family, protecting their
lifestyle, investing for retirement, estate planning, business
continuity, and philanthropy.
Our
role is limited to identifying their needs and informing them about the
difficulties and the rules and the strategies available in their
particular situation. For each of these areas, tax issues are an
unavoidable corollary to achieving maximum effectiveness.
To that
extent, our mission is to make sure that our clients are informed about
the tax opportunities and risks they encounter and are therefore able to
seek out the professional support that will enable them to improve
their situation. It is inherent in my responsibilities to ensure that
our clients obtain the advice they need in order to achieve their
objectives effectively. This means that in my role at BMO, I bring
together the knowledge and experience of our teams of experts to provide
assistance to the bank's investment advisors, to help them create sound
wealth management plans for their clients.
BMO's
investment advisors don't just look at tax, of course. They draw on our
resources, for the exclusive benefit of our clients, by tackling the
questions we have described, in order to provide them with an integrated
and multidisciplinary wealth management solution. This includes all
aspects of managing, protecting and transferring wealth, investment
strategy, insurance, estate planning, retirement planning, cash
management, planned giving, powers of attorney, trusts and wills.
Our
information includes the tax aspects. However, they are only incidental
to the myriad of supports we offer our clients. We work exclusively
within the laws that are in force and within the limits they impose. Our
goal is to make sure that our clients are not the victims of bad advice
or of the risky or improper use of tax rules. Our aim is always to
protect our clients and not put their personal situation at risk, and
thus destroy our relationship of trust.
This
committee will know of the myriad of excellent programs that are in
place to give Canadians the opportunity to be tax efficient within the
fiscal policies decided by Parliament. The RRSP, for instance, has long
been one of the most successful retirement savings tools ever developed
in Canada. There are many other tools that operate alongside it.
BMO
Financial Group is a strong supporter of the recent creation of new
instruments that have the dual advantage of supporting Canadians who are
saving for retirement, through tax relief, while helping to achieve an
important social goal: financial security for our fellow Canadians in
retirement. New tools such as the tax free savings account, or TFSA, the
voluntary retirement savings plan, or VRSP, disability savings plans,
and for some time now, education savings plans, have been added to the
fiscal tools put in place to help achieve clear public objectives.
The
function of our wealth management service is to make sure that our
clients take advantage of the opportunities that Canadian tax policies
offer and avoid the traps that can be hiding behind the shiny returns or
the smoke and mirrors. Our function is to inform them and encourage
them to explore the opportunities available to them with their legal and
tax advisors.
At
the international level, we also have to ensure that our clients do not
fall into traps, whether because of double taxation when they hold
assets or property outside Canada, estate taxes on their property if
they have heirs who reside outside Canada, or any other complexity that
arises when different legislation intersects, whether in relation to the
personal nature of liability for tax, the economic basis of tax
liability or conflicting rules. International tax advice is intended
primarily to avert the dangers of double taxation.
The same is true for foreign nationals who invest in Canada...
The
same is true for foreign nationals who invest in Canada, who do not
want to see the capital they have invested in our economy penalized by
the impact of Canadian tax liability on income from Canadian sources,
while at the same time being taxed in their country based on citizenship
or residence. Our role is therefore to inform our clients and make them
aware of the options, within the rules.
Mr. Chair,
ladies and gentlemen of the committee, BMO Financial Group is pleased
to be here to discuss international taxation questions with you.
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