A union-sponsored survey of more than 1,700 auditors and other tax professionals who work for the Canada Revenue Agency suggests that even the insiders believe the cards are stacked in favour of the rich.
Nine out of 10 surveyed agreed with this statement: “It is easier for corporations and wealthy individuals to evade and/or avoid tax responsibilities than it is for average Canadians.” That’s according to a summary of results released by the Professional Institute of the Public Service of Canada (PIPSC), which conducted the poll.
More than eight out of 10 of those polled agreed that “tax credits, tax exemptions, and tax loopholes disproportionately benefit corporations and wealthy Canadians compared to average Canadians.” And 45 per cent agreed that CRA’s mandate has been “compromised by political interference” (the survey did not define the term, leaving it up to members to interpret).
The online survey, conducted between Feb. 20 and March 6, included managers, forensic accountants, economists, statisticians and actuaries — the tax professionals who generally are assigned to the accounts of large corporations and the wealthy, rather than those of average taxpayers and small businesses.
“Nobody knows better how income from all sources is assessed and turned into tax revenue,” says the poll summary.
“These responses validate the widely held belief that those with the means are able to shirk their tax responsibilities while everyone else is left to pick up the slack.”
The survey was sent electronically to 11,599 members of CRA’s audit, financial and scientific group; 2,170 members — almost 19 per cent of the total — completed it anonymously, the union said.
The CRA was not involved in the project; communications were direct between the union and its members.
Budget cuts blamed
The poll analysis excluded responses from 429 computer-systems employees, focusing instead on the 1,741 tax professionals working directly in assessment and collection operations, including 1,384 tax auditors.
PIPSC also commissioned an Environics telephone survey of 1,000 Canadians in early July. It found that 79 per cent agreed with the tax professionals who believe the wealthy have an easier time dodging taxes.
So knowledgeable CRA insiders were even more likely than the members of the general public — by about 10 percentage points — to believe that Canada’s tax system favours the rich.
Three-quarters of the CRA tax professionals surveyed also agreed with the claim that “multinational corporations shift profits to low-tax regions even when there is little to no corresponding economic activity taking place in that jurisdiction.”
Quite staggering.– PIPSC president Debi Daviau on a survey of CRA tax professionals that concluded the system is skewed to benefit the wealthy
The PIPSC report on the poll blames the tax system’s flaws on staff cuts in 2012 by the former Conservative government of Stephen Harper, which at the time was trimming spending across departments to eliminate the deficit.
The Liberal government has since restored some of that funding, notably directing new money to collecting tax debts and chasing more offshore tax dodgers. But the union said there remains an annual budget shortfall of $500 million compared with funding levels in 2012.
The result, said the union, has been fewer auditors, less training and outmoded technology — and a CRA failing to keep pace with agile tax lawyers, accountants and consultants in the private sector.
“CRA professionals often feel outgunned by the people trying hardest to avoid taxes,” says the poll report, which also argues that the computer algorithms used to replace laid-off CRA workers have unfairly focused the agency’s efforts on small fry.
“This increased scrutiny of average Canadians came at the expense of the agency’s ability to target much larger tax avoiders, as the CRA ended up cutting some of the very experts it relied on to unravel complicated tax avoidance schemes.”
‘All kinds of loopholes’
PIPSC president Debi Daviau called the results of the poll “quite staggering.” The poll report confirms “there’s all kinds of loopholes that large corporations can take advantage of that little guys simply can’t,” she said in an interview with CBC News.
The union’s CRA contract expires in December and it’s not currently in labour negotiations; Daviau said the survey was not a ploy to protect members’ jobs. She said that as tax professionals, PIPSC members are in high demand in the private sector, where they can sometimes earn three times as much as the federal government is willing to pay.
Daviau said her organization is committed to ensuring all Canadians pay their fair share of taxes – and two forthcoming PIPSC reports arising from the survey this fall will recommend ways to make the system more equitable. That effort will include PIPSC members providing professional input on new legislation and policies.
The findings of the survey echo those of a December 2015 report by the group Canadians for Tax Fairness, which interviewed 25 anonymous CRA auditors, fraud investigators and senior managers who oversee audits of multinational firms.
“They said that despite government’s assurances that taxpayers are treated fairly, the CRA is anything but fair,” said the 2015 report. “They cited the lack of agency resources, stacked up against behind-the-scenes lobbying by deep-pocketed corporations and wealthy, well-connected families.”
Toby Sanger, executive director of Canadians for Tax Fairness, said the latest survey is a sometimes “disturbing” affirmation of those findings.
“If it’s the tax professionals that are really concerned … then we should be worried,” Sanger said in an interview.
Spokespeople for the CRA, which was provided with an advance copy of the PIPSC survey report, did not immediately respond to a request for comment.