Harper government cut revenue agency crime unit after report called for strengthening resources

Mike De Souza, Postmedia News

OTTAWA – The federal government eliminated a special team of tax auditors tasked with investigating organized crime and integrated the unit’s role into another branch of the Canada Revenue Agency after an internal review recommended increasing government efforts to pursue criminals.

“The agency should determine the extent to which it wishes to strengthen its capability to pursue both criminal non-compliance and non-compliance in the criminal economy and then develop a comprehensive enforcement strategy,” said the October 2010 report.

The review also revealed that the unit had identified about $101 million in assessments from 1,176 audits in 2008-2009, up from about $20 million in assessments from 1997-1998, and representing an eight per cent annual increase over the previous five years.

A government chart shows growth in tax assessments by a special organized crime unit at the Canada Revenue Agency.

A government chart shows growth in tax assessments by a special organized crime unit at the Canada Revenue Agency.

But the report also concluded that a lack of resources for the unit made it difficult to collect unpaid taxes, with 85 per cent of its assessments going uncollected.

A spokesman for the agency, Noel Carisse, said these results, related to court challenges in the cases involving the team, justified the decision to integrate the unit’s resources within an existing audit branch.

The explanation contrasted with remarks made last week by Revenue Minister Kerry-Lynne Findlay whodefended a lack of reported results from a new $8 million fund from the 2012 budget to investigate charities by saying “it isn’t about the numbers” but rather about “who’s complying and who isn’t” complying with Canada’s tax laws.

%name Harper government cut revenue agency crime unit after report called for strengthening resources
Revenue Minister Findlay on charities

Outside of the organized crime unit, the report found that the agency’s overall approach to pursuing criminals was disorganized.

“The agency has a decentralized and somewhat disparate approach to enforcement and lacks a clear well articulated and operationally entrenched enforcement strategy,” it said.

The report also said that the organized crime unit worked closely with police forces, including participation in a major November 2006 raid that “dealt a serious blow to traditional organized crime” in Montreal with over 70 arrests and charges in connection with almost 1,000 offences. The unit also had a formal agreement with the RCMP as part of its work.

In terms of its efforts to investigate charities in the wake of new funding from the 2012 federal budget, the agency has only been able to revoke the charitable status of one organization, Physicians for Global Survival, for spending more than 10 per cent of its budget on political activities to advocate for a cause.

But the agency was not able to provide details about how it has spent the funding, offering instead a general explanation that it was used to build a new website, modify some reporting requirements of charities and do some auditing work.

Murray Rankin, the NDP revenue critic, said he was contacted in his Victoria, B.C., riding by one charity that said it was forced to spend about $250,000 on paperwork in response to the new requirements that he described as a “Conservative witch hunt” against environmental groups.

“That’s outrageous because they’re tying these charities up, I say, deliberately in red tape so as to not let them do their mission,” said Rankin.

The NDP also called on the government to reinstate the organized crime unit and call an independent investigation into allegations of corruption within the agency in the wake of a media report about a $400,000 cheque that a tax centre sent to a reputed mob leader.

The special team tasked with pursuing organized crime had about 192 full-time equivalent workers and a budget of about $12.9 million, according to the 2010 report.

Overall, the agency has projected about 3,000 job cuts in a workforce of about 41,000 over the next three years.

The agency spokesman, Carisse, said that it still had a Criminal Investigations Directorate with “broad based powers to investigate and gather evidence to support a prosecution of tax evasion or fraud.”

Last week, Findlay, who was appointed as revenue minister in July, said the decision to eliminate the special enforcement team was made by bureaucrats before she took over as minister and that she believed it was for “efficiency reasons.” 


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