Chrétien-appointed senator challenges Bill Morneau for lack of action on tax evasion and money laundering

Open this photo in gallery:

A veteran Liberal senator strongly criticized Finance Minister Bill Morneau Tuesday for not imposing sales taxes on digital companies such as Netflix and for not doing enough to fight money laundering.

Senator Serge Joyal, a former Liberal MP who was appointed to the Senate in 1997 by then-prime minister Jean Chrétien, listed evidence of widespread money laundering in British Columbia and Ottawa’s reluctance to impose a sales tax on foreign digital companies as he questioned the government’s record.

“Quebec is imposing GST on Netflix and you’re just trying to say to us ‘Oh well,’” said Mr. Joyal as Mr. Morneau took part in the Senate’s daily Question Period.

“What are you waiting for in order to act on your own? I will have to go to vote in four months from now. … Why should I vote for you on your capacity to address tax evasion and money laundering?"

The question from Mr. Joyal was the most heated that the Minister faced over the course of his 40-minute appearance. Mr. Joyal is one of nine remaining senators who sit as Senate Liberals, or independent Liberals, in the Senate. In 2014, while still in opposition, Liberal Leader Justin Trudeau announced that Liberal senators would no longer be part of the Liberal caucus with MPs. As Prime Minister, Mr. Trudeau has only appointed senators who sit as independents. The Prime Minister’s Senate reforms have also included sending cabinet ministers to occasionally attend Senate Question Period.

Mr. Joyal said through an office spokesperson Tuesday evening that his apparent questioning of whether he will vote Liberal this fall was “rhetorical.”

The federal Auditor-General reported last week that the federal government lost out on $169-million in revenue in 2017 due to its continuing practice of not requiring foreign digital companies such as Netflix to collect sales tax on Canadian sales.

Also last week, the B.C. government released a report that said more than $40-billion in dirty money was laundered in Canada last year, primarily through real estate, gambling and the sale of luxury goods such as high-end vehicles.

As of this year, Quebec and Saskatchewan require Netflix and other foreign-based digital companies to collect the provincial portion of sales tax.

Mr. Morneau defended his government’s record on the file. While he did not address the GST issue, he has previously said that Canada is waiting for the results of international negotiations, which are scheduled to conclude in 2020. He said on Tuesday that those international talks have made recent progress in terms of sharing financial information across borders to catch tax evaders.

He also said that he’s working with provinces to provide more transparency over the ownership of Canadian-based companies and that his budgets have consistently provided the Canada Revenue Agency with more funding to address tax avoidance and money laundering.

“This is an ongoing effort. The bad guys keep finding new approaches,” Mr. Morneau said. "We are working hard to make sure that we are dealing with these issues and that will be a continuing challenge. It’s one that I hope, when I come to your door, I’ll be able to convince you we take very seriously.”