PBO says it cannot fully measure cost of tax avoidance due to incomplete data | iNFOnews | Thompson-Okanagan's News Source
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PBO says it cannot fully measure cost of tax avoidance due to incomplete data

Prime Minister Justin Trudeau responds to a question during Question Period in the House of Commons, Monday, February 5, 2018 in Ottawa. Canada's spending watchdog says he still does not have access to the full data his office needs to evaluate the amount of money Ottawa loses each year due to offshore tax havens and tax avoidance schemes. THE CANADIAN PRESS/Fred Chartrand

OTTAWA - Parliament's spending watchdog says he still does not have access to all the data his office needs to determine the amount of money the federal government loses each year to offshore tax havens and tax avoidance schemes.

Parliamentary Budget Officer Yves Giroux says the Canada Revenue Agency would only give his office aggregate tax data for a study his office has for years wanted to complete on Canada's "tax gap," the difference between how much tax revenue should have been collected in a year versus what was actually brought in.

The PBO needs more detailed data to fully measure the tax gap in Canada, Giroux said.

Without a more fulsome, independent study of how big the problem of tax avoidance and evasion is in Canada, Giroux said it's hard for the government to understand how best to address it.

"If it's a minimal problem of a few hundred million dollars, maybe it's not worth that much time chasing that money that eludes government. But if, as we fully expect, it is a multi-billion issue, then it is worth it going after that unreported income," he said.

"It's very difficult to fix a problem that you cannot quantify."

Giroux's office has demanded detailed information since December 2017, even threatening court action to get it.

In February 2018, the Trudeau government agreed to provide the information "in a way that will ensure the protection of personal information of Canadians," Prime Minister Justin Trudeau said in the House of Commons at the time.

The CRA provided the PBO with high-level, aggregated data on individuals, corporations and trusts.

The information on individuals was so high-level it was "unusable," Giroux said, but the office went ahead with a partial study on the more usable corporate data. The results of the work are expected to be released this summer and will focus on domestic companies with foreign affiliates, or those based elsewhere with a presence in Canada.

The study will not, however, offer the full picture of the tax gap in Canada, Giroux said.

Trudeau has vowed to crack down on tax cheats and those who use offshore havens to avoid paying taxes, dedicating about $1 billion to these efforts.

The CRA has identified nearly 900 Canadians individuals and corporate entities in the Panama Papers — a leak of information from a Panamanian law firm three years ago that detailed hundreds of billions of dollars from around the world sheltered in tax havens, at the expense of numerous countries' treasuries.

The tax agency has five criminal investigations underway and completed 116 audits, but no charges have been laid and the amount of unpaid tax revenue recovered remains unclear.

Giroux asked Finance Minister Bill Morneau in January for a legislative change to give the PBO access to more detailed tax data for the tax gap study and others, including verifying the costs of measures in the federal budget.

So far, Giroux has not received a response.

Other federal agencies have access to the information Giroux wants, including Statistics Canada, the Finance Department, all provincial and territorial governments and the federal auditor general.

That's why Giroux said he finds it "hard to believe they would not trust an agent of Parliament to have access to data of that nature."

His theory is that the real reason is political: "They don't want to have somebody providing the challenge function that our office provides."

Morneau spokesman Pierre-Olivier Herbert said the finance minister said the CRA provided aggregated data "in a manner that respects Canadian privacy laws."

"We will continue to work to provide the necessary information to further this study while protecting the confidential information of Canadians," Hebert said.

—Follow @ReporterTeresa on Twitter.

News from © The Canadian Press, 2019
The Canadian Press

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