Business·CBC Investigates

Revenue agency routinely failed to meet Access to Information deadlines on KPMG

The Canada Revenue Agency has routinely failed to meet deadlines under the Access to Information Act after receiving requests for documents about the KPMG offshore tax scandal and private lobbying meetings with the accounting industry.

Limited disclosure to date sheds light on meetings between CRA and tax industry

The Canada Revenue Agency has routinely missed deadlines to provide documents with information on the KPMG probe. (Sean Kilpatrick/Canadian Press)

The Canada Revenue Agency routinely failed to meet deadlines under the Access to Information Act after receiving requests for documents about the KPMG offshore tax scandal and private lobbying meetings with the accounting industry, according to a summary provided by the agency itself.

CBC News began making requests to the federal agency more than a year ago for information about compliance officials and their meetings with KPMG executives, Department of Justice officials, and industry lobbyists — yet deadlines to produce those records have repeatedly not been met.

In 2013, the CRA obtained a judge's order forcing KPMG to hand over the names of wealthy clients caught using an offshore tax dodge based on the Isle of Man, a small European island between Ireland and England. Earlier this year CBC News revealed the CRA offered a secret amnesty deal to those clients to avoid paying penalties — so long as they never talked about it in public.

In response to one CBC News request, officials issued a 360-day extension to provide the materials. The agency has missed deadlines legislated under the act for several other requests for information, with no indication of when the results will be provided.  And for one request that was eventually completed, it took CRA nearly 11 months to provide just three pages.

"In any normal functioning, transparent system, you would have had those within a few weeks," says Dean Beeby, a CBC News senior reporter specializing in Access to Information requests. "Three pages, that should have been delivered within 30 days or less."

The limited records that have been provided to CBC News suggest those that are still in the pipeline may contain valuable information.

One set of documents describes the lobbying efforts of a former CRA senior policy adviser working for accounting industry association CPA Canada to limit the powers of CRA auditors. Another set of documents reveals a group of tax accountants lobbied senior CRA officials on tax regulation and an "enhanced" relationship with the agency in the afternoon and hosted them for a private soiree at the Rideau Club in the evening.

CBC’s Dean Beeby says that there’s no way of knowing when the CRA might finally comply.

As for when the bulk of the documents might be produced, Beeby says there is no way of knowing when CRA might finally comply. Beeby says the act contains no penalties, so there is no incentive to provide documents in a timely fashion — even when the release of that information might provide the public with insight into controversial issues.

"It's like having a highway traffic act but not hiring any cops to enforce it," Beeby says. "It's on the books, but it doesn't have any consequences for people who violate the law."

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CBC News contacted the Prime Minister's Office, the national revenue minister, and the CRA commissioner for comment. The PMO and the minister didn't respond directly. 

The CRA responded on behalf of Andrew Treusch, saying the commissioner is not involved in the access to information system. "The ATIP process is managed independently ensuring that all requests for information are handled impartially and free from influence," a CRA spokesperson said.

CRA's media office also issued a statement that says it receives more than 6,000 requests for information a year and processes two million pages annually, which is the "second highest volume" across the federal government.

"The CRA makes a diligent and thorough effort to locate and retrieve all requested records in a timely manner," the statement reads.

"At the same time, the protection of privacy and the confidential information of taxpayers is also in the public interest and a high priority for the CRA." 

Prime Minister Justin Trudeau wrote mandate letters to his cabinet about openness and transparency, including one to Revenue Minister Diane Lebouthillier. (Sean Kilpatrick/Canadian Press)

During the 2015 election campaign, the Liberals promised to change the Access to Information Act, including giving powers to the information commissioner to order federal bodies to produce documents.

In November 2015, Prime Minister Justin Trudeau wrote "mandate" letters to his new cabinet, including one to Revenue Minister Diane Lebouthillier that called for a new era of transparency.

"We have also committed to set a higher bar for openness and transparency in government," Trudeau's letter to Lebouthillier says. "It is time to shine more light on government to ensure it remains focused on the people it serves. Government and its information should be open by default."

Vincent Gogolek, executive director of the BC Freedom of Information and Privacy Association, says if the Liberals follow through, it would be a "major improvement in the act."

He says there are ramifications to releasing information years after it is first requested.

Vincent Gogolek BC Freedom of Information and Privacy Association is pushing for reform of access to information laws in Canada. (CBC)

"At some point, information that you're interested in as a matter of journalism becomes information of interest to historians. And that's something we should not be allowing to have happen."

In 2015, the information commissioner's office reported that the CRA was the second most complained about government institution in 2014-2015.

The report says the CRA acknowledged it had a "serious information management and document retrieval problem when it comes to identifying and retrieving records in response to access requests."

CBC News has made more than 80 access to information requests to the CRA since the spring of 2015. The CRA has closed most of those files, stating it had no records pertaining to those requests, or the requests contained taxpayer information, which the agency isn't permitted to provide.

Of the more than 20 requests for which the CRA has said it has documentation, only a handful have been fulfilled. According to the CRA's ATIP report, 14 are overdue.

On May 10, the Commons finance committee filed a motion requesting CRA provide documents related to the KPMG Isle of Man case. Lebouthillier is scheduled to testify before the committee today.


Harvey Cashore

The Fifth Estate

Harvey Cashore is an investigative reporter with the CBC's weekly investigative program The Fifth Estate.

With files from Priscilla Hwang