Fresh from the pages of Reader Tips;
The Canada Revenue Agency (CRA) claims it is owed $11 billion in unpaid taxes by Canadian Corporations in 2014 alone. CRA estimates total unpaid taxes for 2014 were $26 billion. See, for example …
https://www.cbc.ca/radio/frontburner/canadian-corporations-owe-up-to-11b-in-taxes-1.5183181
In the above link 2 millennials try and unravel this dark secret about corporate tax avoidance. The female host talks about getting emails from CRA. They never email, but I diverge from the story.
The two biggest court cases regarding tax evasion (in Canada) are BMO and Cameco. CRA lost both decisions. In the case of Cameco, CRA claimed the company set up companies explicitly to avoid paying corporate tax in Canada (which is not a crime by the way). CRA called the scheme a “sham”. CRA claimed $2.2 billion in unpaid taxes.
What interested me about the Cameco case most was how it was reported in the media. If you Google “Cameco and CRA in court over taxes” most of the links are prior to the court decision and consist mainly of CRA claims and calls of unfairness by fair tax activists. Once the decision was made public there seems to be no follow up or discussion – until now where the CBC is regurgitating the CRA claims of widespread corporate tax avoidance in Canada. Here is the decision …
https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/344951/index.do
The most relevant part of the testimony is where a former Cameco executive explains why Cameco set up overseas operations in the first place.
Q. What were your conclusions regarding how Cameco could minimize its tax expense?
A. Well, we had a choice which — you know, I had had opportunities before, comparable. The company Cameco had a choice to make. With these new opportunities, such as HEU and offshore purchases and such, we could continue to run the company Saskatchewan focused. Everyone would remain in Saskatoon. All of this material would be brought back in to Cameco Corp., the Canadian parent. It would be sold through them and all that activity would be as it had always been. Everything ran through Cameco. Then nothing really would have changed. I would have the same tax bill. The same items would be included in the tax calculation as it always had been, so nothing would have changed.
But then I’d turn around and say, “Well, from a cost reduction perspective, I haven’t done anything. What can the company do? What can Cameco do to change that?” And the idea came up to say, well, in particularly the HEU material, it’s Russian. It’s equivalent over the life of it to about 80 million pounds for Cameco, which is a very substantial uranium mine. It had no connection to Canada. Why bring it here, subject that uranium to Canadian tax when it never was from Canada in the first place?
So that started me down the road of saying, “All right. If you move the HEU material — or if you don’t move it. If you put the HEU material offshore so that it never, in the first place, becomes part of the Canadian company, if you make your third-party purchases other than that offshore for material that’s never part of Canada, all of that material, then, is not part of the Canadian tax system. So that was the start of it.”
Cameco set up a company in Switzerland to buy uranium from Russia so that it did not have to bring the Russian uranium back to Canada and pay Canadian taxes – perfectly legal. This means that CRA was in error – the taxes they claimed were owed were not in fact owed. But no one challenges CRA in the media when it comes to corporate taxes. No one will challenge the bogus $11 billion in unpaid taxes from 2014 alone.
Thanks to Steve from Rockwood for that.
I suspect a lot of money owed to CRA were from raised assessments from companies that are essentially bankrupt. CRA’s attempt to get blood out of a stone.
Reminds me of the justification for the new consumer taxation system in BC where ctb wrote off bad debt from Woodward’s and Canadian airlines and called it “efficiencies”. Wonderful job guys.
When we used to have child fitness tax credits I’d get audited for it ever year for a $75 refund amount. They wanted program information about each activity, amounts, schedules etc etc. Money well spent! Great job CRA!
And all the foreign idiots they hire want people to prove they can’t get brain surgery done in Pouce Coupe, BC to justify medical travel expenses. And every 10 or 20 years the tax people get a hard-on for taxing waitresses’ tips. That one has to have a negative return.
I watch BNN Bloomberg and the coverage of Cameco’s issues with CRA is typically pathetic. The slant in business news is to hype Pot stocks, green anything, and shill for the Spawn. Every once in a while, an analyst with knowledge shocks the “reporters” with a reality check.
“hype Pot stocks, green anything, and shill for the Spawn”
The sad thing is that channel was once my go to place for interesting and worthwhile business news.
It is now worthless.
Amanda Lang’s the worst
Andrew Bell is snarky.
The CBC did a pretty good job of lousing up its business programming.
More than 20 years ago, Newsworld (or whatever it’s called nowadays) had a show that came on in the late afternoon out here in Alberta. It was usually hosted by Fred Langdon, though Jeannie Lee would sometimes fill in for him.
Then, some bright boy decided to copy PBS’s Wall Street Week, at least the way it was before that network started tinkering and later firing Louis Rukeyser for commenting on it. The clone first went on the air in late 1998 and ran in the same Friday time slot as the aforementioned CBC show. It was awful, and, mercifully, it was cancelled after a few months. The original program returned soon afterward to that Friday time slot.
However, not content to leaving well enough alone, CBC did some more tinkering. That business show (I’ve long forgotten what its name was) was revised. Langdon and Lee were gone, though to other work inside CBC, and, as I remember, some brainless bobbleheads took over the hosting duties. I also recall that its time changed as well and I soon lost interest.
Not that CBC was the only one that did such tomfool things. Lou Rukeyser wasn’t pleased with PBS’s changes to WSW, made some on-air comments about it, though he did say he would co-operate with the network, and was bounced off the air for his efforts. A few months later, his program, with a new title and format, showed up on CNBC, but it didn’t last long after he got sick. Eventually, he cancelled it because of his illness and died a short while later.
As for “new and improved” WSW itself, it lost what made the show worth watching when PBS punted Rukeyser and it, too, went off the air after floundering for a few years.
To all network programmers: in industry, we used to have a saying–if it works, don’t fix it! Words to live by, I would say.
(Captcha must be run by city slickers who’ve never been on a farm. It thinks that a combine is a tractor.)
BNN should be renamed SNN: Special Needs News. So horrible.
Taxes always amuses me.
Canadians are told,we have one of the best public education systems in the world.Repeatedly used to justify the astounding amount of taxation taken from us.
Yet the average Canadian cannot file their own taxes.
Think about that.
Either we are numerically illiterate or our tax forms are beyond a reasonable persons ability.
Which is it?
I believe financial illiteracy is a planned result of the state run schools.
Kleptocracy only works as long as those being robbed are too stupid to recognize their parasitic overlords.
In fact I would love to run this experiment.
Positing that we are better “educated” than all past generations.
(This being the public lie.)
Therefore it shall be no imposition for each individual to file their own taxes.
Every employee shall be paid their Gross Wage and each individual shall be responsible for remitting all taxes ,fees and impositions employers currently must deal with .
How long do you think the current level of theft would last?
Doing my own taxes is the start of all my financial planning.
And every year it gets harder, without an iota of doubt that it is a deliberate government action.
Ironically, taxes become more complicated as you retire, particularly if you are married.
I feel so sorry for people without the knowledge and having to depend on….who? Mostly it seems they depend on people they shouldn’t, let alone the legalized thievery that passes for financial business practice in Canada.
To say nothing of the embarrassment that is the Canadian Education system, where illiteracy and innumeracy continue to reign.
Canada……..where the Fix is always in.
Illiteracy, ignorance and inumeracy is indirectly the goal of ANY state education system, the easier to rule and rob the people. Outside of providing employment and income to the reliable political support of a significant sector of society.
I’ve been a professional tax preparer for many years and have always tried to do my best for my clients. That involves a fair bit of time studying the changes and trying to figure out where CRA is headed before tax season. I agree taxes are more complex each year, and options change quickly and without any thought to the effect on the average taxpayer. But what is worse is that the folks at CRA who are making the decisions and disallowing legitimate deductions CANNOT read the Income Tax Act. They rely on scripts they are given. It’s very frustrating trying a CRA agent to admit an error; getting said error corrected can be a nightmare. And, even when a taxpayer’s file is under review, it is not uncommon for a collections agent – needing to reach quota – to arbitrarily and wrongly grab the money thought to be owed from the taxpayer’s bank account. Businesses have been forced under because of such actions.
I agree. We had an experience with medical deductions not being allowed because of dates and Blue Cross benefits and after our tax preparer tried to get the problem solved for a few months he just said we should give it up. The amount of money involved wasn’t worth the hassle and the moron at the CRA didn’t know their stuff.
Frances, just had that discussion with a friend. She was told she owed 21K, they cleaned out her bank account, to the tune of over 100K, and then eventually admitted they were wrong on the 21k. It took almost a year to get her money back.
Agree, NME – CRA is VERY VERY quick to grab your money, and very very SLOW to return same.
Surely they’re just talking about the FAANG corporations. /sarc off
Just donate money to the Liberal party and the CRA will leave you alone.
I support this comment. I read and studied every word,
“CRA claimed the company set up companies explicitly to avoid paying corporate tax in Canada (which is not a crime by the way).”
Well, exactly. The media rarely if ever clarifies the difference between tax avoidance (completely legal – that’s what you’re doing when you get a tax receipt for a donation to the Salvation Army) and tax evasion (completely illegal – you have to misrepresent your income in order to do it).
Governments create tax codes.
If a corporation adopts a particular tax avoidance strategy, it is only because a tax code permits it. Ergo, if you think it’s somehow “not fair”, the government is the culprit, not the corporation.
Frances hits on the CRA’s high point,Their motto is ;
“No competency required.”
My 2017 return was not processed,their words, until March 2019.
No explanation offered and the final return agrees with what I filed,to the penny,my considered opinion is they had no permission to pay out, no matter how large the tax over payment was.
And no one capable of actually processing the information I filed.
They acted as if they wanted to challenge my tax filing, but could not or could not be bothered to actually do the numbers.
The contrast in behaviour is mindblowing, as I pointed out to their call centre personel, if I owed what they were withholding, for anywhere near the same period of time, with zero explanation,they would be through my bank accounts in a heartbeat. Fines and interest up the wazzoo and business as usual.
I need a new country,as not one of these creatures campaigning to “lead” Confederated Canada has a word to say on accountability from our “helpers” who have demonstrated stunning arrogance,ignorance of their duties and outright banditry at their posts.
CRA just makes shit up as they go.
CSA still runs unchecked with full cover from the Just Us System.
RCMP door kickers and gun grabbers unpunished.
Elections Canada freely advertises their corrupt nature.
Environment Canada is Judge ,jury, executioner and final appeal process.So much for rule of law.
(check out definition of toxic spill)
The naked bias from the “Privy Council” goes unremarked.
What exactly do our MP’s represent?
Couldn’t agree more, John Robertson!! We are governed by criminals and have no more say in this than than Soviet Union citizens of old or Chinese citizens do today.
Thanks Kate for letting us rant.
Canada is done as a viable country in which to prosper, and achieve your full professional potential. As are most Western states. My family and I are looking to pack it in and move, before they implement capital controls (we are just about there) and before they build a wall to keep us all IN!
hiring the best of the best of tax accountants for ginormous sums is . . . . . . . .
a cost of doing business. and they ALL include *their* fees as a tax deduction,
it always has, is, and will be this way as long as we utilize money and the power it contains.
you only need one, ONE rotten-to-the-core official at the top to derail any efforts towards remedy.
10 years ago I had to move and start a new job, the first year I worked September through December at the new job, received a T4, and did my income tax. The CRA wanted me to PROVE that I worked there…They can’t comprehend that companies, in my case a very large international one, don’t just hand out T4’s to random people. Not to mention the pile of paperwork, not to mention money, that the company has to send in on my behalf.