Friday November 10, 2017

Budget watchdog considering legal 'saga' with revenue agency to test his powers

Parliamentary Budget Officer Jean-Denis Frechette waits to appear before the Commons infrastructure committee, Tuesday, February 21, 2017 in Ottawa.

Parliamentary Budget Officer Jean-Denis Frechette waits to appear before the Commons infrastructure committee, Tuesday, February 21, 2017 in Ottawa. (Adrian Wyld/Canadian Press)

Listen 13:12

Canada's budget watchdog is considering whether to use a 5-year battle to get information from the Canada Revenue Agency to test the limits of the new legislation outlining his office's powers.

"I call it a saga, a long saga."

Parliamentary budget officer Jean-Denis Fréchette says his office has been involved in a legal battle with CRA since 2012.

The PBO has been requesting information to evaluate Canada's "tax gap," which represents the difference between taxes that should be received and the ones that actually end up being collected, the latter being lower due to the underground economy, tax havens and mistakes made by Canadians filing their taxes.

The CRA has been refusing the PBO's repeated requests for income data, arguing sharing information would break confidentiality laws, even if Fréchette argues his office is only after numbers, not personal information.

"For now, I'm facing this kind of impasse and it's very difficult, but I never give up, never, never," he said.

"Maybe eventually we should test the new legislation. The timing is good, everybody is asking for the tax gap," Fréchette added.

That new legislation, which came into effect this year, is supposed to ensure that the office has expanded access to data, among other things.

Tax havens, which contribute to the tax gap, were in the news this week because of the Paradise Papers.

Fréchette says there is a cost to not knowing what the tax gap is.

"If you don't know, money eventually gets collected by CRA, you don't do really your job, or due diligence, in terms of voting on budgets, and so on,"

In an email, a spokesperson for Revenue Minister Diane Leboutillier wrote that the: "Canada Revenue Agency now has a dedicated team studying the topic and has released three reports on the tax gap since 2016."