Revenue agency defends collection practices
OTTAWA — The Canada Revenue Agency maintains it will have the necessary resources to track down tax cheats and chase after $29 billion in uncollected tax debt, despite facing significant funding and staffing cuts.
Senior CRA officials defended their tax-collection practices Tuesday to the House of Commons finance committee, a week after the federal auditor general highlighted the agency is owed $29 billion in uncollected taxes.
Two broader CRA compliance programs, which include efforts on fighting domestic and international tax evasion, will see more than $100 million and hundreds of staff cut from them over the next three years.
The official Opposition NDP grilled CRA officials Tuesday over how they expect to collect the owed tax revenue and fight tax evasion when the agency’s staffing and budget are being slashed.
“Won’t it make it even more difficult to achieve compliance with these cuts?” asked NDP national revenue critic Murray Rankin. “How are you going to deal with all of that money that is not being collected?”
Rankin highlighted there has been a decline in recent years in the number of CRA full-time employees in the international audit and aggressive tax planning programs — before more than $300 million in additional budget cuts are implemented.
The auditor general, in a report released last week, said Canada’s tax agency has improved its ability to collect revenues, but still lacks a clear strategy to snare all the money owed to the federal government.
The CRA hasn’t implemented some of its own recommendations to better collect debts, and may be letting risky files fall through the cracks, the Michael Ferguson said in his report.
Senior CRA officials, however, said Tuesday tax collection and enforcement remain a priority and won’t be affected by job cuts, which will total more than 2,500 over the next few years.
The CRA is implementing new measures and investing in collection programs to snare the $29 billion in uncollected taxes, officials stressed.
“That is actually one of our priority projects,” said Mark Perlman, the CRA’s acting chief financial officer and assistant commissioner in the finance and administration branch. “We are aware of this situation. We have put a number of measures in place.”
Yet, the CRA’s efforts on the file seem to be producing mixed results.
The Canada Revenue Agency’s total uncollected tax debt has soared roughly 60 per cent to $29 billion in the last seven years.