CRA for the Wealthy, and CRA for the rest of us

Why is there such a double standard in the way the CRA treats Canadians – sweetheart deals for rich Canadians who cheat on their taxes, and penalties for the rest of us. Not to mention the demeaning series of hoops that parents have to jump through in ord

Yes, it’s that time of year again – tax time.

Despite the fact that it happens at the same time every year, many Canadians find themselves scrambling to gather receipts and tax forms, and staying up late in an effort to file on time - because there are penalties for filing late, especially if you owe taxes.

Not so, it seems, for a select few.  We have been hearing more and more about very wealthy Canadians who don’t fret during tax-filing season.  That’s because they have managed to hide their wealth elsewhere, in order to avoid paying their fair share of taxes. 

According to a CBC news report*,

The Canada Revenue Agency offered amnesty to multi-millionaire clients caught using what's been called an offshore tax "sham" on the Isle of Man by offering a secret, no-penalty, no-prosecution deal to high net worth clients of accounting giant KPMG.

The clients simply had to agree to pay their back taxes and modest interest on these offshore investments, which they had failed to report on their income tax returns.

In the face of these shocking revelations about KPMG’s tax evasion schemes, New Democrats are calling for a full investigation into the debacle and the role of the Canada Revenue Agency (CRA). So far the government has done nothing but protect KPMG insiders and the millionaires who benefited from this scheme.

It’s been revealed that in recent years almost 20 officials have left the Canada Revenue Agency to work for KPMG, suggesting a serious conflict of interest between the CRA and KPMG.

Meanwhile, my office in Saskatoon has been helping parents who have been trying to claim their Canada Child Benefits. Here are just a few examples:

A woman who left her abusive partner is told that her children’s CCB payments are suspended until she can prove her current marital status, and that she is the children’s primary caregiver. Often, this necessitates the woman having to go back to the abusive partner to complete the required paperwork. The welfare of women and children fleeing violence should be paramount. At the very least, the CCB payments should continue pending the review.

Another mother on social assistance has been reviewed by the CRA every year since 2009 for her Canada Child Benefits.  Her CCB monthly payments were put on hold until the review was completed.  When this case was finally resolved, the mother received a retro-payment of over $20,000.  Sadly, this mother will face another CCB review in the coming year, triggered by this large CRA retro-payment.

This is a tragic illustration of the growing inequality in our country: families who are struggling to make ends meet are being made to go to ridiculous lengths to prove and re-prove their eligibility, yet millionaires who wilfully defraud the government are given a free pass.

Why is there such a double standard in the way the CRA treats Canadians – sweetheart deals for rich Canadians who cheat on their taxes, and penalties for the rest of us. Not to mention the demeaning series of hoops that parents have to jump through in order to claim a Canada Child Benefit for their children.

Minister Duclos has travelled the country in advance of the Federal Budget being tabled.  I invite him to come to Saskatoon to hear first-hand from families struggling to access the much heralded Canada Child Benefit. Perhaps then, he would be able to convey to his colleagues - and his government - the very real and urgent need that exists outside the playgrounds of the wealthy.

The government should take concrete and immediate action to recoup the millions of dollars lost to tax fraud and tax havens - dollars that should be funding more affordable housing, a national pharmacare program, and a fair, living wage.

Canadians will be watching.