Tax thriller in Ottawa

The major issue reverberating around Ottawa this week was the release of the Paradise Papers.

The Paradise Papers are leaked documents containing the names of individuals involved in offshore accounts that, in some cases, are used to avoid paying domestic taxes.
It has become a political issue because one of the names on the list happens to be the Liberal Party of Canada's chief fundraiser.

This same individual accompanied the prime minister to an exclusive dinner at the White House during the Obama administration. This, in turn, raised the question why a Liberal Party fundraiser was brought to an exclusive dinner when the Liberal government's Natural Resource minister was left off the guest list.

The prime minister has refused to answer this question.

I think it is important to recognize that being named on the Paradise Papers is not indicative of having done anything illegal. The real issue is, we have observed the Canada Revenue Agency attempt to tax employee discounts. At the same time the Liberal government attempted a large tax grab against farmers and small business owners.

Meanwhile, individuals of immense wealth can utilize offshore accounts and family trusts here at home with no proposed taxation change whatsoever.

In many ways, this creates two tiers of taxation where the wealthiest are treated differently by this Liberal government then every-day Canadians. 

This raises a question on exactly how much potential tax revenue is lost by these types of tax policies. Officially, this is known as the tax gap. The tax gap is the government's potential tax revenue as opposed to the amount of tax revenue it is actually able to collect. 

In the United States, this type of taxation data has been tracked and publicly disclosed for many years. 
As the recent release of the Paradise Papers has brought the extent of this problem to light, many have questioned what the tax gap is in Canada.

Unfortunately, the Canada Revenue Agency refuses to disclose this information. In fact, there has been considerable effort in Parliament by MPs and senators to obtain this information. There has been no success.

Some have estimated that the tax gap could be as high as $47 billion annually; this is a serious and growing concern. 
The Liberal government has justified the position of the Canada Revenue Agency, arguing that Canadians tax information is confidential and as a result this data should not be released.

The Liberals have also pointed out they are increasing the budget for the Canada Revenue Agency for enforcement and investigation purposes.
My question this week:

  • do you believe that Canada Revenue Agency should join countries such as the United States, Sweden, Australia and others in publicly disclosing the tax gap?


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About the Author

Dan Albas, Conservative member of Parliament for the riding of Central Okanagan-Similkameen-Nicola, is the shadow minister of innovation, science, economic development and internal trade, and sits on the standing committee on finance.

Before entering public life, Dan was the owner of Kick City Martial Arts, responsible for training hundreds of men, women and youth to bring out their best.

In British Columbia, Dan has been consistently one of the lowest spending MPs on office and administration related costs despite operating two offices to better serve local constituents.

Dan is consistently recognized as one of Canada’s top 10 most active members of Parliament on Twitter (@danalbas) and continues to write a weekly column published in many local newspapers and on this website.

He can be reached at [email protected] or call toll free at 1-800-665-8711.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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