Liberal lobbyist Herb Metcalfe gets house arrest, fine for tax evasion

Veteran Liberal lobbyist Herb Metcalfe has received a conditional sentence of two years less a day – including 12 months house arrest – for failing to report $1.4-million in payment and benefits between 2002 and 2006.

Mr. Metcalfe has long been a senior player in the Liberal backrooms of Ottawa. According to the Canada Revenue Agency, he pleaded guilty to one count of income-tax evasion and was fined $396,259, representing 100 per cent of the total taxes evaded.

A CRA investigation focused on Mr. Metcalfe's work as a director and employee of the Capital Hill Group Ottawa Inc., which the agency describes as "a political lobbying business."

The agency states that Mr. Metcalfe prepared his tax returns each year by hand and either knew, "or was willfully blind to the fact," that the income he received was required to be reported on his returns.

"The Canada Revenue Agency pursues tax evaders to maintain public confidence in the integrity of the tax system," said Vince Pranjivan, the CRA's assistant commissioner of the Ontario Region. "Canadians have to trust that our self-assessment system is working and that it is fair."

Mr. Metcalfe was a senior adviser to Stéphane Dion when he was leader of the Liberal Party and was a key go-between for the Liberals during the failed coalition talks with the NDP following the 2008 federal election that elected a minority Conservative government.

Mr. Metcalfe's wife Isabel has also been a senior party organizer who has played many roles behind the scenes. She has also run as a Liberal candidate.

The CRA issued a news release dated Nov. 18, 2015, outlining the fine and conviction. However the release did not immediately receive media attention due to public-service rules related to communicating during an election.

Mr. Metcalfe was sentenced on Sept. 30, during the election campaign. But federal departments and agencies are under strict restrictions regarding the types of news releases that can be issued during an election campaign.

As a result, the agency quietly posted the news release on its website on Nov. 18, nearly a month after the election, and did not take the additional step of alerting the media that the information had been posted.

Capital Hill Group account manager Joanna Carey said in a statement that Mr. Metcalfe has left the lobbying firm.

"Due to a personal matter unrelated to the firm and its operations, Herb has decided to step back from the Capital Hill Group," she said. "Herb is no longer involved with the Capital Hill Group or its operations. We continue to move ahead with business as usual under the leadership of senior partner David Angus and our team of highly experienced consultants."