Better results: The CRA at work for you
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Introduction
Canada has one of the highest voluntary tax compliance rates in the world, but there’s still a small minority choosing not to pay what they owe.
Tax evasion and aggressive tax avoidance deprive our country of important revenues that help fund essential programs and services such as health care, childcare, education and infrastructure.
Recent Federal Budget investments have enabled the Canada Revenue Agency (CRA) to invest in better tools and approaches to help receive and analyze more data to find more of those not paying their taxes.
Getting results
Focusing resources on the highest risk files means the CRA is tightening the net on high net-worth individuals, promoters, corporations and entities who try to avoid paying their taxes. This work is having an impact and the CRA is committed to giving Canadians access to the results of the important work the CRA is conducting to tackle tax evasion and aggressive tax avoidance.
It is important to note that, as a result of the COVID-19 pandemic, several programs were temporarily suspended as employee workloads shifted to focus on COVID-19 benefit administration and other essential workloads. Audit activity continued throughout the pandemic, but was limited to high-risk audits and exceptional circumstances, meaning results could be lower than reported in previous years.
| Description | 2014-2015 | 2015-2016 | 2016-2017 | 2017-2018 | 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 |
|---|---|---|---|---|---|---|---|---|
| Fiscal Impact - Agency | $11.7 billion | $12.7 billion | $12.5 billion | $13.6 billion | $14.4 billion | $12.7 billion | $12.2 billion | $13.2 billion |
| Fiscal Impact - Large business, international, offshore, aggressive tax planning | $7.8 billion | $8.0 billion | $8.0 billion | $7.9 billion | $8.6 billion | $6.4 billion | $7.7 billion | $8.0 billion |
| Fiscal Impact - Abusive tax avoidance & aggressive tax planning | $1.4 billion | $2.0 billion | $1.8 billion | $2.9 billion | $2.9 billion | $2.0 billion | $2.8 billion | $3.7 billion |
| Cases received for application of General Anti-Avoidance Rule (GAAR) (cumulative since inception) | 1,267 | 1,333 | 1,392 | 1,472 | 1,549 | 1,608 | 1,694 | 1,831 |
| Cases where General Anti-Avoidance Rule was recommended for application | 78% | 79% | 79% | 79% | 80% | 80% | 81% | 81% |
| Real estate audit assessmentsFootnote 1 | $169 million | $161 million | $263 million | $434 million | $527 million | $300 million | $426 million | |
| Real estate penaltiesFootnote 1 | $10 million | $7 million | $27 million | $57 million | $77 million | $54 million | $67 million | |
| # of Leads received | 30,596 | 32,171 | 33,036 | 32,170 | 32,137 | 34,016 | 62,855Footnote 2 | 41,178 |
| # of international exchanges under legal instrumentFootnote 3 | 1,212 | 1,075 | 892 | 1,838 | 993 | 963 | 682 | 1093 |
| # of records exchanged under the Common Reporting Standard (CRS)Footnote 4 | 1.46 million | 2.73 million | 1.84 million | 3.22 million | ||||
| # of offshore audits completed | 98 | 185 | 223 | 235 | 307 | 333 | 231 | 198 |
| # of written submissions to OTIP | 198Footnote 5 | 113 | 110 | 93 | 123 | 171 | 72 | 99 |
| $ in federal tax and foreign reporting penalties assessed through information received through OTIPFootnote 6 | N/A | $10,148 | $1.6 million | $31.5 million | $50.9 million | $62.2 million | $101.3 million | $112.6 million |
| $ of Third Party Penalties on promoters and tax preparers (all programs)Footnote 7 | $36.7 million | $212,914 | $44.3 million | $48.9 million | $22.4 million | $17.4 million | $1.8 million | $32.3 million |
| # of cases referred for criminal investigationFootnote 8 | 244 | 377 | 335 | 269 | 252 | 244 | 110 | 101 |
| # of search warrants executedFootnote 8 | 39 | 100 | 123 | 172 | 130 | 196 | 14 | 27 |
| # of cases referred to the Public Prosecution Service of Canada (PPSC) | 21 | 17 | 28 | 36 | 49 | 24 | 17 | 16 |
| # of files where criminal charges were laid under the Income Tax Act, Excise Tax Act, and/or Criminal Code | 30 | 19 | 32 | 52 | 61 | 33 | 25 | 16 |
| # of criminal investigations as a result of joint forces operations with other law enforcement agencies | 1 | 13 | 12 | 12 | 16 | 19 | 31 | 31 |
| PPSC Conviction rate | 96% | 88% | 89% | 95% | 92% | 94% | 95% | 88% |
| # of convictions for tax evasion and/or tax fraud | 95 | 50 | 37 | 27 | 22 | 32 | 36 | 23 |
| $ of federal tax evaded related to convictions | $12.5 million | $16.4 million | $32.7 million | $45.4 million | $4.2 million | $7.4 million | $10.9 million | $4.4 million |
| # of taxpayers sentenced to prison termsFootnote 9 | 34 | 22 | 24 | 14 | 12 | 13 | 15 | 10 |
| # of years of prison in total | 57.6 | 44.5 | 50.6 | 40.7 | 18.5 | 18.5 | 26.2 | 15.3 |
| Average jail term (in months) per jail sentence | 20.3 | 24.3 | 25.3 | 34.9 | 18.5 | 17.1 | 20.9 | 18.4 |
| $ of court-imposed fines | $9.7 million | $4.1 million | $10 million | $3.1 million | $2.6 million | $3.0 million | $5.2 million | $3.3 million |
How you can help the CRA
If you suspect a person, business or charity of tax or benefit cheating in Canada, report them to the CRA by submitting a lead to the Leads Program. Leads can be submitted by phone, mail, fax or online.
You can be eligible to be paid when you tell the CRA about offshore tax evasion and avoidance by using the Offshore Tax Informant Program (OTIP). If you are aware of deliberate international tax avoidance, let the CRA know.
You can reduce the impact of previous errors in your own tax returns. Under the Voluntary Disclosures Program (VDP), taxpayers can correct errors in their tax affairs. Recent changes make it tougher for those who intentionally avoid their tax obligations to benefit from the VDP, while maintaining the program for Canadians looking to correct tax filing mistakes.
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