April 12th, 2016

Special Committee to advise CRA on Tax Gap

In light of yesterday’s announcement from the Minister of National Revenue, the Honourable Diane Lebouthillier, listing the new measures the Canada Revenue Agency (CRA) will take to study and combat the problem of overseas tax evasion, Charlottetown Senator Percy Downe will delay the introduction of his Bill, the Fairness for All Canadian Taxpayers Act, which would require the government to measure the tax gap.

“The whole point of my Bill was to compel the government to calculate the size of the tax gap and report to Canadians how much revenue is being lost to tax evasion,” said Downe. “Now that the government appears to be finally ready to do this of their own accord, the same results may be achieved without presenting my Bill.”

“I would, however, suggest to the government that they reach out to the Parliamentary Budget Officer (PBO) and make him a welcome and active participant in this process, as his office has spent many years working on how to calculate such an estimate, and their expertise would be an invaluable contribution to the study.”

Senator Downe’s work on the tax gap goes back to 2012, when he wrote the then PBO asking him to investigate the economic impact of overseas tax evasion. That investigation evolved into an effort to determine the tax gap. After diligent effort, the PBO determined that it is indeed possible to provide an estimate of the tax gap, and subsequently approached the CRA to secure its cooperation in this endeavour. Unfortunately, years of stonewalling by the Agency prevented any progress, prompting Downe to prepare his Fairness for All Canadian Taxpayers Act.

“The announcement of more auditors and refocused efforts is most welcome. I am particularly optimistic about the formation of an Offshore Compliance Advisory Committee,” said Downe. “I look forward to seeing what progress they make on the tax gap, and will ultimately decide whether there is a need to introduce my Bill based on their results.”

For further information:
Senator Percy Downe: 613-943-8107
Or toll free at 1-800-267-7362   
www.sen.parl.gc.ca/pdowne