Federal government taking action to combat tax evasion

By Kerry-Lynne D. Findlay (commentary)

Letters to the Editor (The Guardian) comment@theguardian.pe.ca
Published on September 15, 2014

It is unfortunate that in Senator Percy Downe’s misleading August 27 editorial on taxation, he chooses to tout the politically biased and ill-informed opinions of his special interest group friends. The fact is that the Harper government has taken serious action to combat tax evasion and aggressive tax avoidance, both domestically and internationally.

Since 2006, our government has introduced over 85 measures to improve the integrity of the tax system. However, Sen. Downe neglects this fact because he’s a member of the Liberal party that voted against every single one of these measures in the House of Commons. In that time, the Canada Revenue Agency (CRA) has audited over 8,000 cases through our efforts to combat aggressive international tax planning, identifying approximately $5.1 billion in federal tax owing.

Liberal Sen. Downe refers to another country’s offshore results as an example of great success in international tax evasion/avoidance. He states that $660 million is an admirable achievement for offshore tax recovery. Perhaps rather than misleading the public, Senator Downe should provide the comparable Canadian statistics. The facts are these: during the same period (2006-2012) under the Harper Government, the CRA has audited over $4.5 billion in offshore tax. This is in addition to nearly $1.5 billion of offshore income and assets that has been driven into voluntary disclosures.  

Our government is investing in catching offshore tax cheats. Through Economic Action Plan 2013, we introduced new tools and legislative measures to further strengthen the CRA’s ability to combat international tax evasion and aggressive tax avoidance. We have invested $30 million over five years for the CRA to implement these measures. This investment has already provided impressive results.

Most strikingly, the number of voluntary disclosures received by the CRA has increased from 1158 in 2005-2006 (the last year of Senator Downe’s Liberal Government) to 5248 in 2013-2014 — an increase of over 400%. Total unreported income and assets for this period was just over $2 billion. In relative terms, P.E.I.’s 2014-2015 budget is approximately $1.6 billion.

From April 1, 2014 through Aug. 3, 2014, alone, there have been 4,158 disclosures involving offshore unreported income and assets, on pace to double last year’s totals. The dramatic increase in voluntary disclosures is proof our government’s investments in combatting tax evasion and aggressive tax avoidance are working. Indeed, there are fewer places to hide for Canadians who are looking to abuse the system than under the previous Liberal government.

In his two recent reports on Offshore Banking and Aggressive Tax Planning, the Auditor General confirmed that the CRA is getting the job done. The CRA has the right people in place to combat aggressive tax planning. In fact, the overall number of auditors has gone up from 5,297 during the last year of the Senator Downe’s Liberal Government, to 6,042 in 2014.

Before catering to his political motivations and the interest groups who support them, Senator Downe should have consulted the facts.

Kerry-Lynne D. Findlay is the Minister of National Revenue