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Federal Government Loses Billions in Unpaid Taxes

Federal Government Loses Billions in Unpaid Taxes

July 16, 2022

Every year the federal government loses just over $22 billion in unpaid taxes, writes Peter Watson.

A recent report from the Canada Revenue Agency (CRA) reviewed the years from 2014 to 2018. The total amount of federal taxes that were not collected during that time period was $111 billion.

In an era of ever ending financial demands for providing additional benefits to Canadian citizens, it seems extreme to have such a significant tax collection deficit.

There seems to be more government focus on spending than efficiently with managing costs. Or in this case in efficiently with collecting taxes.

Over the last number of years there have been cases of leaked documents showing that many wealthy elite Canadians hide their money offshore.

The last major issue that was alleged involved a national accounting firm creating opportunities for their clients to avoid taxes.

These stories tend to get a fair amount of interest when they are first released. There are government bold predictions that these circumstances will be fully investigated and disclosed to the Canadian public.

There never seems to be full disclosure on what happened, were criminal charges laid and what policy and regulation be put in place to ensure this does not happen in the future.

Tax avoidance hurts us all financially. It also creates an unhealthy environment that if some Canadians do not pay taxes, then why not everyone else.

Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com