A couple of years ago, journalists connected to WikiLeaks revealed a trove of information on hundreds of wealthy Canadians who may (or may not) be hiding piles of cash in offshore bank accounts in order to evade paying their taxes.
Until that public revelation, the Canada Revenue Agency did not act on the leak, because they did not have the information. They did not have the information because, unlike its American and European counterparts, the CRA at the time did not pay for information.
Well, now they do. And that must make it easier for the agency to go after waitresses who don’t declare their tips or day labourers who work on construction sites for cash.
The millionaires with their fortunes in Zurich or the Caribbean? There’s been some tough talk but so far, not a whole lot of recovery reported. A CBC News story — about a year old now — noted the CRA had discovered about $22.4 million in unpaid taxes due from offshore accounts, and recovered about $8 million.
Peanuts. But that’s what the CRA likes best.
In a much-heralded campaign in January, the CRA did an aggressive audit of restaurant workers in St. Catharines, Ont. After dragging who knows how many servers through the wringer, the CRA found — gasp! — $1.7 million in unreported gratuities!
At the tax rate paid by your average waiter, that means the CRA would recover about $255,000, plus penalties. A few probably also lost their GST refunds designed for low-income Canadians.
Well, that experience ought to keep Canada’s wait staff honest.
You’d hope the government would make good use of the $8 million they dragged out of the offshore accounts of wealthy people.
Eight million happens to be the sum the Harper government gave the CRA’s charity auditors so non-profit advocates for the poor, for the environment and for human rights would just shut up.
Since the charity audit campaign became public, and scholars began writing papers on its effects, news is trickling out from charities dealing with the demands of the CRA auditors.
Oxfam Canada was told they could not use their funds raised to “prevent” poverty in Africa, because as the CRA pointed out, millionaires could get together to find ways to prevent themselves from becoming poor.
The CRA, with its non-use of information on offshore tax evasion, would likely know a thing or two about that.
PEN Canada, the national arm of a global association of writers and journalists dedicated to freedom of speech, is also under audit. They are accused of using free speech as a political tool. Which is not a charitable activity in Stephen Harper’s Canada.
PEN, as you may recall, criticized the federal government for putting a muzzle on its scientists who do research on things like the environmental effects of energy exploration. Can’t have all that science going public, can we?
As with its experience with rich offshore tax evaders, the supposedly non-partisan CRA also seems to know a thing or two about using its funds for political purposes.
Edward Jackson, a professor at Carleton University, wrote in a recent blog that the CRA “has lost its way.” What used to be a politically-neutral enforcer of tax law has become a political arm of government, which can be used to punish enemies.
His article, which you can look up and read for yourself, is titled: Why the CRA is no longer an effective instrument of public policy. Jackson says Canadians should be taking out memberships in and making donations to PEN and other non-profits undergoing these special audits.
He says we should also be contributing to a fund to launch a court challenge to the whole program, as it has been rolled out.
The CRA maintained in a recent release that its audit targets are not politically selected. It just looks that way.
Appearances are all the government needs to create the chill required, so that nobody dares question their policies or actions, unless the critics’ resources are government-deep.
Or held privately offshore.
Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email firstname.lastname@example.org.