The Canada Revenue Agency is creating a special unit to focus on international tax evasion as part of new measures in the 2013 budget that Ottawa expects will deliver hundreds of millions of dollars each year in new revenue.
Revenue Minister Gail Shea made the announcement Wednesday in the foyer of the House of Commons. The main points of her news conference had previously been announced in the 2013 budget.
International tax avoidance has become a major political issue for governments around the world, particularly in light of a recent leak of data showing the widespread use of offshore tax havens.
Ms. Shea pointed out that her department will receive $15-million to set up a system that will require banks and other financial institutions to report international electronic fund transfers of $10,000 or more.
The department also plans to spend $15-million found from internal savings on a dedicated team of CRA experts. The team will focus on “international tax evasion and aggressive tax avoidance.”
Ms. Shea said anyone avoiding taxes offshore should take note.
“They should declare all their assets now before the agency comes after them,” she said.
In response to questions about the size of the new team, Ms. Shea said it would be between six and 10 people. While her cabinet colleague Maxime Bernier, the minister for small business, referred to the unit as a “SWAT team,” Ms. Shea described it in more administrative terms.
“This is an implementation team for all the new measures in the budget. So we will take experts from within the department and have them work exclusively on implementing measures that were in the 2013 budget,” she said.
The 2013 budget also announced $61-million a year in cuts to the CRA budget, which the government said involves reduced “management administrative support” and greater public use of automated tools. The CRA said those savings will not impact services to Canadians.
The budget also revealed that the government is counting on strong compliance at the CRA to help erase the deficit. Ottawa has booked $2.4-billion over six years in additional revenue through stronger tax compliance measures.
The government is also launching a “Stop International Tax Evasion Program” tip line that will reward an individual with up to 15 per cent of taxes collected on assessments exceeding $100,000 in federal tax.
The awards will only be paid if the activity involves foreign property or property located or transferred outside Canada or transactions conducted partially or entirely outside Canada. Individuals who have been convicted in connection to the tax evasion they are reporting on will not be eligible.
The CRA is facing more public sector job cuts than any other department. The 2012 budget announced that 19,200 public service jobs would be eliminated over three years. The Treasury Board later reported that 3,008 of those jobs would be at the CRA.
NDP Leader Thomas Mulcair said the minister’s announcement was an attempt at political spin to counter criticism over spending cuts at the CRA. He questioned how the government will find $2.4-billion in new revenue given all of the spending cuts taking place.
“They’re not going to get anywhere near that number,” he said. “Now they’re proposing a drop in the bucket compared to what they’ve just withdrawn.”