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Canada's Finance Minister Jim Flaherty speaks during a news conference in Ottawa March 1, 2013. The slowing Canadian economy means the government will have lower revenues than it initially forecast as it draws up the next budget, which is due soon, Flaherty said on Friday.

CHRIS WATTIE/REUTERS

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Jim Flaherty is a man in need of money.

The finance minister is promising a balanced budget before the next election, but slower economic growth means there's less revenue coming into Ottawa. He has already announced three years' worth of spending cuts and seems reluctant to cut much deeper. He has also ruled out tax hikes and cuts to provincial transfers. In short, he is a man with few options.

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Enter the tax cheats.

The finance minister tipped his hand Friday that going after Canadian cash sitting in offshore bank accounts is shaping up as a priority for his 2013 federal budget.

"Everybody should pay their fair share of taxes and people shouldn't be hiding money from the Government of Canada," he told reporters. "Some people do that offshore. And sometimes it makes sense to invest more resources for example in the Canada Revenue Agency so that we are better at policing the minority of Canadians who do not pay their fair share. So we're looking at that side of it."

Those comments were welcome news to Liberal Senator Percy Downe. For years now, the former chief of staff to prime minister Jean Chrétien has been firing off letters and news releases into the void, calling for more action and attention to money Canada is losing to offshore bank accounts.

Using Access to Information, he obtained a document from the Canada Revenue Agency that shows how investigations can be a real money maker.

The 2009 document states that $30-million from the February 2005 budget to counter "Aggressive International Tax Planning" allowed CRA to assess 5,450 cases as of March 31, 2009 with a total fiscal impact in excess of $2.5-billion.

Mr. Downe has been writing to Mr. Flaherty in an effort to draw the minister's attention to the success of the 2005 program.

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"Have I got a solution for you," he said in an interview describing his pitch to the government. "Here's the template: Thirty million goes in and you get a fiscal impact of $2.5-billion. What would $100-million give you?"

With major economies worldwide in even greater need of revenue, fighting tax evasion is quickly moving to the top of the international political agenda. British Prime Minister David Cameron, who hosts the G8 this year, has made it an agenda priority. The United States is forcing big changes – including for Americans living in Canada – with its Foreign Account Tax Compliance Act, which requires foreign banks to tell the Internal Revenue Service about American offshore accounts worth more than $50,000.

On Parliament Hill, MPs on the House of Commons finance committee recently launched a study on the topic and are hearing from experts.

"I think there's a growing momentum," said Mr. Downe. "I'm hopeful the budget will address it."

Bill Curry covers finance in The Globe and Mail's Ottawa bureau.

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