Canada’s uncollected tax debt hits CAN$44 billion Canada’s uncollected tax debt hits CAN$44 billion

Canada’s uncollected tax debt hits CAN$44 billion
06 Jul 2018

Uncollected taxes in Ottawa rose to a record CAN$43.8 billion (US$33.3 billion) this year, despite a Liberal government promise to “stabilise” the situation.

But an internal Canada Revenue Agency (CRA) projection seen by CBC News predicts that the amount of unpaid tax is set to hit more than CAN$47 billion (US$35.6 billion) by 2020. 

The rise appears to be linked to major staff reductions at the CRA under the former Conservative government's deficit-cutting programme. It comes despite the CAN$351.6 million (US$1.03 million) given to the CRA in the 2016 Liberal budget over a five year time period in order “to improve its ability to collect outstanding tax debts”.

The agency said it expects to meet its target of collecting CAN$7.4 billion (US$5.6 billion) in additional tax debt over those five years. But the internal document suggests the CRA still lacks enough staff to keep up.

"During the first four months of the 2017/18 [fiscal year], intake has been higher than our capacity to assign accounts to officers," read an October 2017 update on 'Managing the Tax Debt. “The number of unassigned accounts increased YOY [year over year] (July) by approximately 23%", or about 350,000 unassigned accounts. 

Almost half of the unpaid tax debt, which includes payroll deductions and unpaid goods and services taxes, is owed by individuals, with corporations and businesses accounting for the rest.

A CRA watchdog group said the rapid rise in tax debt over the last decade or so was a direct result of downsizing public services.

Diana Gibson, communications coordinator of Canadians For Tax Fairness, said: "It coincides directly with dramatic cuts to staff and office closures. We do not have adequate staffing levels to actually tackle the debt."

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

Uncollected taxes in Ottawa rose to a record CAN$43.8 billion (US$33.3 billion) this year, despite a Liberal government promise to “stabilise” the situation.

But an internal Canada Revenue Agency (CRA) projection seen by CBC News predicts that the amount of unpaid tax is set to hit more than CAN$47 billion (US$35.6 billion) by 2020. 

The rise appears to be linked to major staff reductions at the CRA under the former Conservative government's deficit-cutting programme. It comes despite the CAN$351.6 million (US$1.03 million) given to the CRA in the 2016 Liberal budget over a five year time period in order “to improve its ability to collect outstanding tax debts”.

The agency said it expects to meet its target of collecting CAN$7.4 billion (US$5.6 billion) in additional tax debt over those five years. But the internal document suggests the CRA still lacks enough staff to keep up.

"During the first four months of the 2017/18 [fiscal year], intake has been higher than our capacity to assign accounts to officers," read an October 2017 update on 'Managing the Tax Debt. “The number of unassigned accounts increased YOY [year over year] (July) by approximately 23%", or about 350,000 unassigned accounts. 

Almost half of the unpaid tax debt, which includes payroll deductions and unpaid goods and services taxes, is owed by individuals, with corporations and businesses accounting for the rest.

A CRA watchdog group said the rapid rise in tax debt over the last decade or so was a direct result of downsizing public services.

Diana Gibson, communications coordinator of Canadians For Tax Fairness, said: "It coincides directly with dramatic cuts to staff and office closures. We do not have adequate staffing levels to actually tackle the debt."

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

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