No one wants to get a letter from the tax man questioning their tax return. But what happens after that letter arrives, it turns out, depends quite a lot on the number of zeroes in your bank account. The wealthier you are, the more lenient the Canada Revenue Agency tends to be.
The latest finding of that depressing double standard comes courtesy of federal auditor general Michael Ferguson. His report released this week found that the CRA gave large businesses and taxpayers with offshore transactions more time to respond and produce documents than average Canadians. And they were more likely to waive interest and penalties for those same higher earners, sometimes doing so without even being asked.
Since the Panama Papers were made public in 2016, shedding light on the tax havens of the wealthy, the Trudeau government has increased the CRA’s budget by more than $1 billion so it could crack down on tax cheats who use complex offshore schemes to avoid paying their fair share of Canadian taxes.
The CRA says it has recouped that extra funding 20 times over with stepped-up audits and compliance activities, but the auditor’s report suggests it still has a ways to go to ensure all Canadians are treated equally by the agency.
Tax evasion is not a victimless crime. Indeed, the Conference Board of Canada estimated last year that the federal government is missing out on $16 billion a year of uncollected taxes — and possibly as much as $47.8 billion.
Ideally, everyone should want to pay their fair share of the taxes that provide the services and programs that make Canada a great place to live. But when they don’t, Canadians should be able to feel confident that the revenue agency will try to run everyone to ground fairly and equally.
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