The Canada Revenue Agency (CRA) has been caught in an embarrassing mess. It appears it has turned a blind eye to wealthy families who were hiding income in order to not pay their share of income tax.
Back in 2012 one of Canada’s largest accounting firms was alleged to have created fancy offshore tax shelter strategies for a small number of wealthy clients.
The CBC coverage of this was excellent.
CRA said all of the correct things. Basically that it took this seriously and would pursue the matter.
The accounting firm received a court order to disclose the names of its clients who had participated in the questionable tax strategy. It allegedly resisted.
Most Canadians would have assumed this matter was being dealt with. We have tax laws and there should be repercussions for individuals and accountants that advise those individuals if they don’t follow the rules.
It has been my experience over many years that Canadians do not want to overpay taxes. However, they are very willing to pay their fair share. The keyword is fair, which means nobody gets a special deal.
It seems “fair” does not apply to the wealthy. And this is where it gets embarrassing.
In 2015 CRA offered 21 wealthy families a special deal. Pay back taxes with some interest and there would be no further penalties for them or their accountants.
The special deal had one condition. Confidentiality.
No one could be told of this special deal or the deal was off.
In other words, no harm was done, so let’s just move on.
What a sham. What a complete sham.
The optics of this appeared that the wealthy families, their high-priced accountants, and teams of lawyers bullied CRA and got it to do a complete collapse of its obligation to uphold the Income Tax Act.
Last week the CBC received an anonymous envelope in the mail with a copy of the secret deal.
The dirty little secret is now public and Canadians have every right to be mad.
We have a new government that prides itself on transparency and what a wonderful opportunity for this backroom deal to be dissected publicly in the court.
Only a trial will provide Canadians with the shady facts that seem to be going on behind closed doors.
Canada is a special country. We care about those less fortunate and have good social programs in place to provide assistance when that is necessary.
Built into the Canadian political system is a degree of trust and respect.
We are reminded of this every day when we watch Americans go through their long and sometimes disgraceful process to elect a president.
It appears that fairness has evaporated from our income tax rules.
No longer is this just about a tax strategy designed for the rich.