Budget officer warns Trudeau Liberals to count costs before introducing new taxes

Budget Officer Yves Giroux told Cabinet Wednesday it would “be a good idea” to calculate how much it costs to collect taxes before introducing any new tax, according to Blacklock’s Reporter.The new tax the Liberal/NDP coalition government is moving to implement is an equity tax targeting foreign property owners, but the budget officer points out the tax proposal costs Canadian taxpayers $10 million more to implement than it will get back in revenue. “If the amounts assessed so far are indeed the final numbers or are indicative of what the government is expected to collect overall I think there will need to be a correction in the budget,” Giroux yesterday told the Commons Government Operations Committee.“Should the Canada Revenue Agency (CRA), when implementing a new tax like this, consider the cost of compliance on taxpayers?” asked Conservative MP Adam Chambers. “It certainly would be a good idea in terms of policy making for the Canada Revenue Agency to introduce that into the equation,” replied Giroux.The federal government spent $59 million to assess $49 million through the Underused Housing Tax Act after the Trudeau Liberals in 2022 imposed the annual 1% equity tax on the assessed value of “vacant or underused property” owned by non-resident foreigners.MP Chambers noted Wednesday the $49 million in revenue represented only the assessments. “That is not collections by the way. That is amounts owing,” he said. “My understanding is they expected to collect $200 million in the first year and about $165 million every year thereafter,” said Chambers, adding tax collectors were “not bringing in what they believed.”Giroux said he agreed it was unusual for tax collections to be 20% costlier than assessments.“It seems to be high, to have numbers such as the ones you mention, that it would be costing so much to administer versus how much is assessed,” said Giroux, agreeing the $49 million assessment may also be optimistic. Assessed tax values were “often a significantly different number than what ends up being collected,” he said.Property owners subject to the tax are required to annually submit a lengthy questionnaire under threat of $5,000 fines and a 5% surcharge. Of 578,910 forms submitted to date a total 478,220 or 83%, “had no amounts owing,” said the Inquiry Of Ministry.The Liberal Party campaigned on the equity tax in the 2019 federal election. Finance Minister Chrystia Freeland testified at 2021 hearings of the Senate National Finance Committee.“This is an important measure. Housing is such an important issue for all of us,” said Freeland. “Given that our population is growing we must build, build and build again new housing every year. Housing must be there to provide shelter for Canadian families."“Housing shouldn’t be taken over by speculators. That tax is one of the measures we’re bringing in to ensure that remains the case.”

Budget officer warns Trudeau Liberals to count costs before introducing new taxes

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