May. 4, 2022

Where is the Outrage, Mr. Singh?

NDP leader Jagmeet Singh likes nothing better than to climb on a soapbox and wax eloquent about the failure of big business and the ultra-rich (whatever that means) to pay their fair share of taxes.

The article below shows that the Trudeau government is making deals with multinational corporations to allow them to escape interest payments and penalties on the tax owed.

Mr. Singh’s decision to prop up the Liberal minority has compromised his principles. The Canada Revenue Agency has been paving the way for multinationals and the ultra-rich to pay less tax for decades. His Faustian bargain with Trudeau to support drug and dental care is opportunistic without regard for future costs or consequences.

The 2022 federal budget included dental care, pharmacare, and $10-a-day daycare – all massive programs that would cost almost $25 billion per year. A new Leger poll commissioned by the Fraser Institute finds that these programs are trendy until people realize that higher taxes will be necessary to pay for them. Fraser Institute.

The problem is that higher taxes to support these programs hit the lowest tax brackets hardest. Those who struggle at, blow or just above the poverty line have less disposable income. Like the increases in interest rates, the buying power of a dollar earned decreases while the cost of living is increasing.
These programs do not include the costs of investments in affordable housing, but that is another subject to be dealt with separately.

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Battle over secret CRA tax deal divided staff, launched complaints, documents show
CRA says investigation cleared executives accused of wrongdoing

Ashley Burke of CBC News reported on May 3 that Canada Revenue Agency violated its own policy and exposed its reputation to damage when it granted a secretive tax deal to a major corporation, according to documents filed in court.
     More than 2,000 pages of highly sensitive government records recently filed in Federal Court expose details of an internal CRA controversy over the tax deal.
     A past director said no to the deal, according to CRA documents. One CRA manager refused to approve the deal and wrote in the records that an executive tried to make him support it, which was “completely unethical and “wrong,” according to the documents.
     The division that approves such deals also disagreed with the arrangement — warning it would lead to lower tax revenues, the records show. Despite the pushback, agency executives went ahead with the arrangement in 2019, CRA records show.
     “There could be negative reputational effects as a result of the atypical process followed … ,” reads the preliminary findings of an investigation by CRA’s Internal Affairs and Fraud Control Division, tabled in Federal Court. 
     CRA then had to notify the Netherlands and United States, where the company in question also operates. The preliminary findings of the investigation noted those countries “may wonder if, and why, Canada did not follow its published practice.”
     CRA defended the deal in a statement to CBC News, saying it was “favourable” to the agency and an investigation by the Internal Affairs and Fraud Control Division cleared those accused of wrongdoing. But the agency would not share a copy of that investigation report or name the company involved, citing the privacy rights of staff and taxpayers.
     Internal documents show the deal set off a torrent of allegations and counter-claims between executives and staff that triggered a series of internal investigations and a settlement to drop retribution claims.
     Two CRA employees have filed an application for judicial review in Federal Court arguing the integrity commissioner shouldn’t have ceased investigations into other claims of wrongdoing at CRA including a toxic workplace environment. The allegations contained in the documents have not been tested in court. Reference.

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Apparently, the court did not agree and overturned the CRA decision on judicial review. Actions of the CRA underline the Trudeau – Singh approach: rules for thee are not for me. Since we have a charter right to equal treatment before and under the law, all taxpayers have a right to appeal fines, interest payments and penalties assessed by the CRA. It is now established that CRA tax court decisions can be sent to the federal court for judicial review.
The CRA has compromised its integrity and opened the way for many appeals and reviews of its decisions. We should be outraged and demand a public inquiry into the operations of the Canada Revenue Agency. We cannot condone upper management decisions to override the agency’s published rules.