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Herb Metcalfe, former Liberal strategist, pleads guilty to tax evasion

Longtime Liberal organizer Herb Metcalfe pleaded guilty in September to income tax evasion, and was sentenced to house arrest and fined nearly $400,000 for evading taxes as an Ottawa lobbyist, the Canada Revenue Agency says in a recent release.

CRA says ex-director of Capital Hill Group received payments from 2002-2006 he didn't report

Longtime Liberal organizer Herb Metcalfe pleaded guilty to one count of tax evasion and was handed a conditional two-year sentence and a fine of $396,259. (capitalhillgroup.ca)

Longtime Liberal organizer Herb Metcalfe was sentenced to house arrest and fined nearly $400,000 fine for evading taxes as an Ottawa lobbyist after pleading guilty to tax evasion, according to the Canada Revenue Agency.

A recent news release from the CRA said Metcalfe was sentenced on Sept. 30 in the Ontario Court of Justice in Ottawa to a two-year conditional sentence, including 12 months of house arrest. He was also fined $396,259, which represents 100 per cent of the total taxes evaded.

Metcalfe pleaded guilty to one count of income tax evasion.

An investigation by the CRA found that Metcalfe, as director and employee of lobbying firm The Capital Hill Group Ottawa Inc., received payments and benefits from 2002 to 2006 totalling $1,366,411 that he did not report on his personal income tax returns.

"Metcalfe prepared his returns each year by hand, and knew, or was willfully blind to the fact, that the income he received was required to be reported on his returns, and that tax was payable on this income," the CRA noted in the news release.

Company calls it 'personal matter'

Joanna Carey, a spokeswoman for The Capital Hill Group, called the issue a "personal matter."

"This is a personal issue with Herb. He is no longer with The Capital Hill Group," she told CBC News.

Carey could not say exactly when Metcalfe left, but said it was "recent."

According to the website of the Office of the Commissioner of Lobbying of Canada, Metcalfe is listed as "currently inactive" with all 13 businesses or groups he had been a consultant for, including the Art Gallery of Greater Victoria, Egg Farmers of Canada and Nucor Steel.

When convicted of income tax evasion, an individual must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed. The court may fine them up to 200 per cent of the taxes evaded and impose a prison term of up to five years, according to the release.

NDP national revenue critic Pierre-Luc Dusseault called the incident "worrying" and said it shows tax evasion remains a big problem in Canada.

"Every year millions of law-abiding Canadians pay their taxes openly and honestly and those who do not should be held to account," he said in a statement. "In this situation, the Liberals need to go out of their way to reassure Canadians that they will no longer be taking Mr. Metcalfe's advice."

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