Recent court documents have brought to light corruption in the Canada Revenue Agency (CRA). It has now been shown that in 2019, the CRA violated its own policy and granted a secret tax deal to an unnamed, major corporation. This scandal has been exposed only a few months after the agency began its latest round of letters demanding repayment from Canada Emergency Response Benefit (CERB) recipients. The whole affair highlights how the CRA is a body designed to give preferential treatment to the rich.
Backroom deals and handouts
Over 2,000 pages of government records have exposed years of scandals, conspiracy, and divides within the CRA. Documents show that the CRA waived penalty and interest payments of an undisclosed amount for an undisclosed large company. Three anonymous complaints reveal that the company in question is already suspected to be involved in a tax avoidance scheme based in Ireland.
Those who spoke out against the deal allege that they were harassed and faced retaliation from agency executives. One manager claims that they were targeted by a director who tried to force them out of their job.
The CRA has openly defended their secret deal, saying it was “favourable” to the agency, and has claimed that they have been cleared of wrongdoing by their Internal Affairs and Fraud Control Division. Yet the agency has refused to share the report from this supposed investigation or even name the company involved. How can they possibly expect anyone to believe they didn’t do anything wrong when they refuse to share any details?
Corruption is far from a new thing for the CRA. This certainly isn’t their first scandal. Many have been reminded of 2016, when it was revealed that the agency offered a secret deal to wealthy clients who had been caught funneling $130 million to a tax avoidance scheme based in the Isle of Man. The director of the CRA’s Competent Authority Services Division has openly admitted that corruption is a simple fact. The following paragraph from the CBC speaks for itself:
”O’Connor told an investigator contacting her to set up an interview that her “division was corrupt,” and that she may have “sidestepped” but she was “only human,” according to an investigation report by internal affairs and fraud control division. O’Connor didn’t elaborate further, but when interviewed she reported she was trying to clean up some bad practices in her division, according to the report.”
Justin Trudeau was pressed in the House of Commons over whether those involved in the scandal would be facing any consequences. Trudeau responded by defending the CRA, saying that it is an “independent agency and at no point is political input sought for these sorts of matters”. Here we have the prime minister openly admitting that the federal government will do nothing to prevent or punish open corruption in its own revenue service!
“CRA took my teeth, my rent, my food”
While the CRA has been helping rich clients avoid tax payments, they have also been unrolling a campaign to clawback COVID relief payments from workers. In January, the CRA began its latest round of letters to former CERB recipients, questioning their eligibility and warning them of forced repayment.
Thousands of letters have been sent out already. During their last round of letters near the end of 2020, the CRA sent out over 441,000. The government has stated that it plans to spend four years tracking down every “wrongful payment” and demanding it back.
It’s absolutely scandalous that the CRA expects any repayment when, by their own admission, eligibility requirements had been confusing from the very beginning! Many people who are now being deemed ineligible had no way of knowing CERB wasn’t open to them and had no reason to expect that there would be any problem. The rollout for CERB was nothing short of a mess. The union that represents CRA call-center agents says that they were given incorrect eligibility guidelines. Poor wording of CERB requirements left it unclear who was actually eligible to begin with. To add more confusion, the CRA quietly changed application requirements weeks after CERB already launched. That means that there were people who were retroactively made ineligible and are now expected to repay!
Even many who were eligible are now being expected to repay up to $2,000. When CERB was first issued, the CRA distributed an extra $2,000 on top of the regular $500 that was promised. The government said that this money would be taken out of future CERB payments. But those who weren’t on CERB long enough for the $2,000 to be deducted are now being asked to repay the difference. They’re effectively being punished for receiving an advanced payment they had no way of opting out from.
Repayment couldn’t possibly come at a worse time. Workers are already suffering through spiraling inflation and record high household debt. At least half of Canadians are only $200 away from financial insolvency. The reality is that most people simply cannot afford to repay their CERB payments. They have already spent it on keeping themselves alive during the pandemic.
Repayment letters have been devastating for many people already. One man in BC has spoken about how he has had to close down his business of 33 years and sell off his tools and his truck to cover a $14,000 payment. A disabled woman in New Brunswick has said she may need to sell her home in order to afford repayment. A 57-year-old residential school survivor has been sent a repayment letter after already needing to sell her condo and take out $4,000 in payday loans to get through the pandemic. Now she doesn’t have the money she needs to pay for needed dental work. She said, “CRA took my teeth, my rent, my food.”
The CRA is a body that exists to serve the rich and suck working people dry. While workers are being punished for accepting financial relief that was promised to them during a global pandemic and crisis, the CRA is cutting backroom deals with major global corporations worth God only knows how much. The entire scandal is another reminder of how the current system is rigged against the poor, and designed to make the rich as much money as possible. This sort of high-level corruption is a basic fact of capitalism.
