Victoria NDP MP Murray Rankin is calling on the federal government to fund a special division of the Canada Revenue Agency to target international tax evaders.
Earlier this month the U.S.-based International Consortium of Investigative Journalists released a massive cache of information on thousands of individuals, including 450 Canadians, who have been using tax havens abroad.
While Rankin hasn’t seen the documents, he said the list is only the tip of the iceberg of tax evasion, which the NDP estimates could be hiding between $5.3 to $7.8 billion in Canadian tax revenue.
“We need to hire more people, estimate the tax gap and train a special division of CRA to go after international tax,” Rankin told the News.
Canada Revenue Minister Gail Shea has called on media outlets involved to provide the CRA with the tax evasion documents.
The government’s 2013 Economic Action Plan provides new measures to fight tax evasion, Shea said in a statement following the release of the information. They include such measures as paying whistleblowers and increasing the onus on Canadians with foreign investments to report more information.
“Over the last six years, the CRA has conducted approximately 8,000 compliance actions and reassessed in excess of $4.5 billion in federal taxes as the result of its efforts,” Shea said.
But Rankin said the CRA budget is being slashed at a time when it needs more forensic accountants and expert lawyers to pursue complex tax evasion cases.
“I fear the government is going to go after the low-hanging fruit, the obvious tax evader with money off-shore not declaring it. But that’s not where the money is. The money is in corporations with subsidiaries, nominee directors in different jurisdictions,” he said.
Last week Rankin and other NDP members of the all-party federal finance committee called on Shea to answer questions about CRA budget cuts.
Hundreds of millions of dollars are being slashed from the CRA budget beginning this year, mostly by closing service centres and forcing residents and businesses to file their taxes online.
Rankin and his committee colleagues have submitted recommendations for improving compliance from Canadians using tax havens. “I want the skills that are in CRA to be brought to bear so we can go after where the real billions of dollars are,” he said.