The latest data showed the Canada Revenue Agency doubled the number of audits aimed at small businesses starting in 2016.According to Blacklock’s Reporter, these statistics align with ongoing complaints the Agency tends to pursue what is perceived as 'low-hanging fruit' rather than focusing on multinational corporations with sophisticated tax avoidance strategies.In an Inquiry of Ministry, presented in the House of Commons, the Agency confirmed the number of audits conducted on small and medium-sized businesses across the country had increased from 13,331 in 2015 to more than 28,000 by 2017, doubling during that period.The Inquiry stated the number of audits dropped below the 2015 levels, but this decrease was attributed solely to the impact of COVID-19.“Due to the COVID-19 pandemic, several programs were suspended,” wrote the Agency. “Employee workloads were shifted to essential services such as the COVID-19 benefits programs and COVID-related call centre activities. Audit activity continued throughout the pandemic but was limited to high-risk audits and exceptional circumstances.”The data revealed since 2015, the number of auditors employed by the Agency has remained constant at 2,600. However, the number of audits conducted doubled, but the average number of criminal prosecutions against tax cheaters has remained at 60 or fewer per year.Data were disclosed at the request of New Democrat MP Richard Cannings (South Okanagan-West Kootenay, BC), who asked, “With regard to the Canada Revenue Agency small and medium-sized business enterprises directorate, from 2015, how many audits were completed?”The updated statistics come after receiving complaints from the public and conducting internal research that indicated the Agency primarily targeted small businesses with minor tax issues.“Canada Revenue Agency dedicates too much energy to minor issues with small businesses and individuals rather than larger, bigger ticket items,” said a Corporate Research report on focus groups with small business owners and accountants.“Items like mileage for vehicles, medical expenses, child care and donations were all viewed as small issues that generate few dollars but engender unnecessary mistrust and anxiety toward the Agency among clients,” wrote researchers. “In contrast, some question how much energy is put toward tackling the more significant tax avoiders.”Former provincial auditor Senator Elizabeth Marshall (NL) stated at a 2018 Senate National Finance committee hearing Canadians had a shared belief that auditors tended to focus on easier targets.“The impression that’s being left with many taxpayers is you’re picking the low-hanging fruit,” said Marshall.During that time, the Agency denied engaging in any aggressive tax enforcement of small taxpayers.“We don’t blindly make just a money decision,” testified then-Assistant Commissioner Ted Gallivan. “There have to be decisions about the fairness of the regime.”“It feels to the individual taxpayer like the Canada Revenue Agency is disproportionately focused on them because we’re mailing them a letter and asking them for receipts,” said Gallivan. “We audit 300 multinationals and get far more revenue from it, but Canadians don’t necessarily appreciate that.”
The latest data showed the Canada Revenue Agency doubled the number of audits aimed at small businesses starting in 2016.According to Blacklock’s Reporter, these statistics align with ongoing complaints the Agency tends to pursue what is perceived as 'low-hanging fruit' rather than focusing on multinational corporations with sophisticated tax avoidance strategies.In an Inquiry of Ministry, presented in the House of Commons, the Agency confirmed the number of audits conducted on small and medium-sized businesses across the country had increased from 13,331 in 2015 to more than 28,000 by 2017, doubling during that period.The Inquiry stated the number of audits dropped below the 2015 levels, but this decrease was attributed solely to the impact of COVID-19.“Due to the COVID-19 pandemic, several programs were suspended,” wrote the Agency. “Employee workloads were shifted to essential services such as the COVID-19 benefits programs and COVID-related call centre activities. Audit activity continued throughout the pandemic but was limited to high-risk audits and exceptional circumstances.”The data revealed since 2015, the number of auditors employed by the Agency has remained constant at 2,600. However, the number of audits conducted doubled, but the average number of criminal prosecutions against tax cheaters has remained at 60 or fewer per year.Data were disclosed at the request of New Democrat MP Richard Cannings (South Okanagan-West Kootenay, BC), who asked, “With regard to the Canada Revenue Agency small and medium-sized business enterprises directorate, from 2015, how many audits were completed?”The updated statistics come after receiving complaints from the public and conducting internal research that indicated the Agency primarily targeted small businesses with minor tax issues.“Canada Revenue Agency dedicates too much energy to minor issues with small businesses and individuals rather than larger, bigger ticket items,” said a Corporate Research report on focus groups with small business owners and accountants.“Items like mileage for vehicles, medical expenses, child care and donations were all viewed as small issues that generate few dollars but engender unnecessary mistrust and anxiety toward the Agency among clients,” wrote researchers. “In contrast, some question how much energy is put toward tackling the more significant tax avoiders.”Former provincial auditor Senator Elizabeth Marshall (NL) stated at a 2018 Senate National Finance committee hearing Canadians had a shared belief that auditors tended to focus on easier targets.“The impression that’s being left with many taxpayers is you’re picking the low-hanging fruit,” said Marshall.During that time, the Agency denied engaging in any aggressive tax enforcement of small taxpayers.“We don’t blindly make just a money decision,” testified then-Assistant Commissioner Ted Gallivan. “There have to be decisions about the fairness of the regime.”“It feels to the individual taxpayer like the Canada Revenue Agency is disproportionately focused on them because we’re mailing them a letter and asking them for receipts,” said Gallivan. “We audit 300 multinationals and get far more revenue from it, but Canadians don’t necessarily appreciate that.”
