Tamara Kronis

Mr. Speaker, Claims · 42 wordswe spend a lot of time in this place talking about how the government spends money. We debate appropriations, pore over spending reports from the Parliamentary Budget Officer and call out boondoggles like the arrive scam, PrescribeIT and the green slush fund. Positioning · 4 wordsThat is important work.PositioningPartly on point Claims · 23 wordsBill S-217 has the potential to augment that work by helping Parliament pay the same attention to the revenue side of the ledger, Reasoning · 52 wordsbecause as we hold governments to account, we should also spend time checking that they do a good job of collecting what is owed and that they do so fairly. Parliament should be just as demanding about the government’s ability to collect money as we are about its authority to spend it. Claims · 93 wordsWe decide in this place what taxes may be imposed, and we authorize the expenditure of public funds. When revenue goes uncollected, it narrows our choices about borrowing, spending and taxes. We need reliable data to understand that. Canada’s tax system depends heavily on people complying voluntarily. Most businesses in my community are small.¹ Their owners keep records and remit payroll deductions, and at tax time, many still bring a cardboard box of receipts to a bookkeeper or accountant. They pay their taxes even when they are struggling to pay their own bills. Reasoning · 62 wordsWhen the government does a good and fair job of collecting taxes owed, we have more choices about how to use that money, including reducing what we borrow, reducing the deficit and leaving Canadians with more money in their pockets. When the government does a bad job, more people evade their obligations and honest taxpayers end up carrying more of the burden. Claims · 5 wordsTax evasion hurts us all, Reasoning · 25 wordsand Parliament should be able to get reliable data from the agency that administers the law in ways that will allow us to help ourselves. Claims · 225 wordsThe tax gap is the difference between the taxes Canadians and businesses legally owe and the amount the government actually collects. Not all of that is due to tax evasion. Taxpayer non-compliance can be intentional or unintentional, and in some cases can result from the inability to pay. It is one of the CRA’s core jobs to minimize the tax gap. Bill S-217 would give Parliament better information to judge how effectively the CRA is doing that and to tell whether we are giving CRA officials the training and tools they need in order to be successful. Bill S-217 would require the CRA’s annual report to include a detailed list of tax evasion convictions, with international cases identified separately. Every three years, it would require tax gap statistics for individuals and corporations, broken down by size and trusts. It would also require the Minister of National Revenue to give the Parliamentary Budget Officer the tax gap data and other information needed for economists and others to do independent analysis. The bill would neither raise taxes, nor give the CRA new investigative powers. What it would ask the CRA to do is to provide data so that we can account for the government’s performance. The CRA already studies the tax gap and publishes some information about convictions. There is considerable expertise that lies behind that work, Reasoning · 63 wordsbut the CRA’s willingness to publish information is not the same as Parliament’s right to receive it. Statutory reporting would provide a baseline and a consistent stream of data that we can use for analysis and improvement. It would survive changes in governments and changes in political priorities and would let us test the agency’s assumption longitudinally instead of simply accepting its conclusions. Claims · 108 wordsIn March, the CRA published estimates for 2014 to 2022.² For tax year 2022, its upper bound estimate of the gross federal tax gap was just under $60 billion.³ After projecting the effect of compliance and collection, the upper bound net gap was closer to $35 billion, ⁴or 9.3% of the federal tax revenue covered.⁵ These estimates include income tax, GST, HST and excise taxes. That $35 billion is not a pile of cash waiting to be recovered, and it would be wrong to suggest that all of it reflects deliberate evasion. The gap includes unreported taxes and amounts assessed but unpaid, and the estimates depend on assumptions. Reasoning · 17 wordsParliament still needs to understand where these shortfalls come from and what the CRA does about them. Claims · 261 wordsNo matter how we look at it, it is big money at a time when we need all the help we can get.Unearned certainty Consider the CRA’s 2024-25 departmental results report. It records $18.1 billion in what the agency calls “fiscal impact” from close to 85,000 completed compliance cases.⁶ Fiscal impact includes tax assessed, refunds reduced, interest, penalties and the present value of certain future tax assessments. The report expressly says it does not account for amounts reversed on appeal or left uncollected. That is a perfectly legitimate measure, if we understand what it measures. It is not the same thing as money collected. A reassessment is not the final word on what a taxpayer owes. Reassessments can be challenged, and confirmed debts are sometimes uncollectible. It is valuable to know the difference between enforcement activity and recovered revenue. For the 2022 tax year, the CRA’s upper-bound estimate of the corporate income tax reporting gap attributable to large corporations was $17.2 billion.⁷ That is an estimate, not a finding of deliberate evasion, but it gives Parliament a good reason to examine this part of the tax system carefully. When former parliamentary budget officer Yves Giroux testified on an earlier version of this bill, he explained that section 241 of the Income Tax Act properly protects taxpayer information, ⁸yet the CRA sometimes aggregates data so heavily, to protect indirect identification, that it becomes difficult to analyze. Giroux said he needed useful data, not taxpayers’ names.⁹ This is an example of the privacy balancing that needs to happen. This bill preserves existing confidentiality restrictions. Reasoning · 29 wordsWe still need to test it at committee to know whether it solves the problem he identified. What he suggested was considering a carefully limited exception to section 241, The ask · 18 wordsand the committee should examine how to give the PBO useful evidence while protecting Canadians’ private tax affairs. Reasoning · 73 wordsThe convictions list needs to be treated with similar care. Criminal prosecutions are appropriate for serious cases, but much tax enforcement takes place through civil reassessments. A higher conviction count does not necessarily mean better administration, because convictions do not always lead to collections. However, it is useful to know when and how well Canadian law has been followed, and whether the government is doing a good job of minimizing that tax gap. The ask · 14 wordsThe committee should also examine the definition of the tax gap in the bill, Claims · 177 wordswhich is tied to the Income Tax Act even though the CRA’s overall reporting includes GST, HST and excise. The new requirements should strengthen, not narrow, the reporting that is already available. Better reporting will not replace experienced investigators, and it will not make a complicated tax system easier to comply with. The former parliamentary budget officer testified that simplifying the rules could free CRA staff to concentrate on audits and collections. Instead of adding to the burden on taxpayers, we ought to be looking at where clearer laws and better targeted enforcement would actually improve results. Collecting taxes already legally owed could relieve pressure to borrow or raise rates or create room to lower taxes for Canadians who are already paying their share. Instead of asking Canadians to contribute more at this difficult time, Bill S-217 would help us find out how effectively the government collects what Parliament has already required. That is why I support this bill and have made some suggestions on how the committee could make it a stronger instrument of parliamentary scrutiny. The ask · 51 wordsLet us give the Parliamentary Budget Officer the best information she can use, with proper protections for people’s privacy. We should get Parliament better information about what happens after taxes are assessed, and we should insist on an equally credible account of what the government has collected alongside what it spends.