CRA hits back at anonymous report of widespread audit flaws | Ottawa Citizen CRA hits back at anonymous report of widespread audit flaws
KATHRYN MAY, OTTAWA CITIZEN
Published on: December 15, 2015 | Last Updated: December 15, 2015 9:06 PM EST
The Canada Revenue Agency rejects allegations of a report, based on secret interviews with its own employees, that Canada’s tax system is plagued with problems, including political interference, that are costing billions in uncollected revenue.
Philippe Brideau, a spokesperson for the agency, said the report, by Canadians for Tax Fairness, has no data to back its claims, adding CRA has taken “significant steps” to transform its operations to meet the challenges of global finance.
Rather, the agency counters the report’s claims of mismanagement by presenting itself as a model employer — selected last year as one of Canada’s Top Employers for Young People and among the top employers in the National Capital Region.
The report alleges that the agency is mismanaged, underwent an ill-conceived restructuring and targets ordinary Canadian taxpayers rather than the “big-time tax cheats” hiding money offshore.
The public servants interviewed worked on complicated international audits. They claim that politicians and lobbyists influence the agency’s operations; that corporations successfully lobby to avoid prosecution; and that political interference can stop investigations.
They also complained about the impact of reducing or shutting down enforcement offices across Canada. Seasoned colleagues are often poached for higher paying jobs at legal and accounting firms, they said, and many felt unable to carry out their professional responsibilities.
In an email, Brideau noted the views of the 28 anonymous tax auditors, fraud investigators and managers interviewed for the report are at odds with the 31,500 employees who — also anonymously — took the 2014 Public Service Employees Survey and gave the agency rave reviews as a workplace.
The survey found that nearly 90 per cent are proud of their work, 85 per cent say co-workers carry out their duties in the public interest, and 84 per cent feel they have the tools to do their jobs. Responses of auditors in areas of international investigations and audits were not provided.
“The CRA is confident — and the evidence shows — that our employees are committed to achieving agency objectives and that our programs are delivering intended results,” said the email.
The agency addressed the report’s concerns about its capacity by noting that it is pumping an additional $200 million into the audit program over the next five years and boosted funding for international and large audit programs by 12 per cent.
It claimed unreported taxes “identified” by the audit program grew 24 per cent in three years to $11.7 billion, but was unclear how much was collected. Similarly, the international and large business program “detected” $7.8 billion in unreported tax last year.
The agency also took exception with the union representing auditors that the revamped multi-disciplinary audit teams that replaced many international audit units were not effective because the new teams don’t begin until 2016.
What’s unusual about the report – if not unprecedented – is for public servants, who are supposed to be loyal and non-partisan, to team up with an advocacy group to complain about the government and its policies. The public servants were not identified and they divulged nothing about specific cases.
Their involvement appears to breach the ethics code of the agency, which doesn’t seem to be taking action.
“Any allegation of a breach of the code must be investigated through a fair and impartial process before it can be confirmed,” said Brideau.
“As the CRA does not currently have the information required to confirm that the information did, in fact, come from current CRA employees or, if it did, to identify those employees, it is not possible to confirm whether a breach has occurred or not,” she said in an email.
Many say the Liberals would be hard-pressed to take any action because it promised to overhaul the tax agency in the same election letter to public servants that it promised a new culture of openness.
Independent Liberal Senator Percy Downe, who has long pressed the CRA to crack down on tax evasion, said he didn’t think the actions of these employees would set a precedent. He argued the big problem is that public servants were fed up hearing the Conservative government say it was cracking down on tax cheats when it wasn’t.
“Public servants know the government sets the direction and they implement it,” said Downe. “It’s this dichotomy between what the government was saying and what it was doing that drove people at CRA to do what they did. I don’t see that happening in other departments.”