Source: The Canadian Press

The Canadian government will finally be able to peek into those impenetrable Swiss bank accounts after sealing a new agreement to exchange information.

But the deal, signed Friday by Prime Minister Stephen Harper and Swiss President Doris Leuthard, won’t help Canada get to the bottom of thousands of accounts at the UBS and HSBC banks it found out about over the past year.

The new measures, part of an update to an existing tax treaty, would allow the Canada Revenue Agency to ask Switzerland for information about Canadian taxpayers when it suspects a citizen of hiding income.

“Switzerland’s been very co-operative with us in that regard,” Harper said at a joint news conference.

“The double-taxation agreement we’re signing today will further enhance co-operation and obviously we’ll use the information we gain through this to ensure that Canadians respect Canadian tax laws.”

For decades, Switzerland had balked at changing the long-cherished confidentiality of its banking system. But pressure from the Organization for Economic Co-operation and Development (OECD), and then more directly by the United States this year, finally drove Switzerland to make a change.

“Switzerland was reticent, but things were moving in that direction,” said Luc Thevenoz, director of the University of Geneva’s banking and finance centre.

It was then up to individual countries to sign agreements with Bern to ensure they would benefit from the new spirit of openness.

But as one Finance official told reporters Friday, the new deal will only apply to income in future taxation years.

That means information about HSBC and UBS bank accounts, leaked to foreign governments by former bank employees, is unlikely to flow from the Swiss government.

Canada is currently reviewing information on those accounts with the help of the French and American governments. It has already recouped $33 million on those cases from Canadians who have voluntarily come forward to declare income.

Revenue Minister Keith Ashfield has said he expects Canada to double the amount it gets through voluntary disclosures this year from last year’s total of $138 million.

Harper is in Switzerland to attend the Francophonie summit, his first foray onto the international stage since Canada lost its bid for a seat on the United Nations Security Council.

Many observers of UN politics have blamed Canada’s loss on a lack of support by African and Middle East nations. More than half the members of the Francophonie hail from that part of the world, including some poor French-African countries from whom Canada withdrew priority aid funding.

But Harper told reporters Friday that he believed the Francophonie had backed Canada as a French-speaking country.

“Switzerland, for instance, strongly supported us as did the vast majority of the countries of the Francophonie, very strongly supported Canada’s bid,” Harper said.

“For those who did not, we obviously respect their decision. One way or another, Canada’s positions are always decided by the promotion of our values and interests.”

In Ottawa, Liberal Leader Michael Ignatieff scoffed at Harper’s assertion.

“If we got such solid support at the Security Council, why did we lose the vote?” he said.

“The fact is we suffered the most important diplomatic defeat in Canada’s post-war history. There’s no other way to describe this. This was a disaster for Canada. He has to take responsibility for it.”

Harper’s spokesman, Dimitri Soudas, did not explain how the prime minister knew that the majority of the Francophonie had supported Canada in the secret vote.

Later, in Montreux, Harper met in a hotel room with Lebanese President Michel Suleiman. In front of the cameras, Suleiman brought up Canada’s failed bid.

“Unfortunately, you weren’t elected to the … Security Council,” he said

“It was a very tight vote between the three,” Harper replied, shrugging. “We were in third position and a dozen votes behind the first. It was very close, but that’s the risk.”

“Next time,” said Suleiman.

Harper is next scheduled to make an official visit to Ukraine.