Police could see tax info without warrant under proposed law

PAUL McLEOD Ottawa Bureau

Police would be able to see Canadians’ private tax information without the use of a warrant under a proposed government law.

If it’s passed, the Canada Revenue Agency could voluntarily hand over a taxpayer’s data to police and the citizen would never be notified.

The change is proposed in the Conservatives’ 375-page omnibus budget bill through a clause that amends the Income Tax Act.

Under Bill C-31, police could see such information if there were reasonable grounds to believe a serious crime had been committed. But neither the police nor the revenue agency would have to make a case to a judge.

Instead, revenue agency staff would decide whether they should hand over the information.

It’s a major reversal of the current principle that the agency cannot share tax data with third parties except in very rare exceptions.

“Without telling anybody, any person who works at CRA could on their own decide to share information,” Stephane Eljarrat, partner at Montreal law firm Davies Ward Phillips & Vineberg, said in an interview Monday.

Eljarrat warned the House of Commons finance committee last week that there needs to be judicial oversight of disclosure. Determining reasonable grounds of a crime is not the specialty or the job of a tax agency, he said.

“The CRA’s mandate is to collect taxes, it’s not to investigate crimes,” he said.

“To protect everybody, it should be done through a judge.”

If Canadians suspect their tax returns will be used against them, they may start hiding income, he told the committee.

The revenue agency now can only hand over information if a person has been charged with tax evasion or if a judge authorizes the seizure to investigate one of a small list of crimes.

Police have asked for freer access to tax data. Requiring charges to be laid before information can be released is “putting the cart before the horse,” Det. Insp. Paul Beesley, of the Ontario Provincial Police anti-rackets branch, told the Senate finance committee last week.

“For instance, somebody who’s declaring $50,000 in income but living in a million-dollar house just doesn’t make any sense to anyone,” he said. “That’s where pre-charge tax information would be very useful.”

The Finance Department offered a more extreme example: child pornography.

The department says agency officials may come across evidence of a crime over the course of their normal duties and should be able to share that evidence with police.

“For instance, the discovery of child pornography on a taxpayer’s computer while a CRA auditor is conducting an audit,” finance spokeswoman Stephanie Rubec said.

Murray Rankin, the NDP’s national revenue critic, said tax data is the second-most private data a government possesses about a citizen, after health information. He argued that deeply personal information, such as sexual orientation or a secret child, could be revealed through tax information.

“The Americans would not stand for this and it’s a shock that we in Canada might go along with it,” Rankin said.

Liberal finance critic Scott Brison said the proposed change is part of a larger weakening of privacy laws that span several pieces of legislation.

“The government hasn’t explained why this potential attack on the privacy rights of Canadians is necessary,” he said. “And by jamming this into another omnibus bill, Parliament is denied the opportunity to scrutinize this change.”

Bill C-31 is being studied in both the Senate and the House of Commons. It will likely be passed into law before the summer but could be amended by either chamber of Parliament.

In a separate piece of legislation, the government is also declaring that telecoms would have no civil or criminal liability if they voluntarily disclose information to police.

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