The Senate of Canada unanimously approved a bill that will require the Canada Revenue Agency (CRA) to annually publish a list of those convicted of tax evasion, with a separate list of international tax cheats, and to also publish a report every three years on Canada's "tax gap": the revenues lost annually to aggressive tax avoidance and evasion.
The Fairness for All Canadian Taxpayers Act, private members bill S-243 sponsored by P.E.I. Senator Percy Downes,will now go to the House of Commons for debate and approval. Canadians for Tax Fairness and has long called for the federal government to publish calculations of the tax gap and strongly supported the bill, with former Executive Director Dennis Howlett appearing at committee to provide advice.
The CRA has published estimates of the tax gap for GST/HST, personal income taxes and Canada's international tax gap, but these estimates are considerably lower than others have calculated. The Conference Board of Canada estimated Canada's tax gap at up to $45 billion annually--more than twice the federal government's annual deficit--while Canadians for Tax Fairness estimates the losses at $25 billion annually, depending on what's included.
The CRA will publish its estimates of corporate tax gap next year, while the Parliamentary Budget Office is also developing estimates. The amount that Canadian corporations shelter in tax havens is estimated to be about twice the amount sheltered by wealthy individual Canadians. Because this money is hidden, and different studies will come up with different calculations, estimates will vary. But the bottom line is Canadian governments are losing out in many billions every year and need to take much stronger action to combat tax evasion particualrly by the wealthy and large corporations.