Opinion
Taxpayers DO have the right to remain silent
A taxpayer-friendly unanimous Federal Court of Appeal ruling came out this week in MNR v Cameco [2019 FCA 67]. At issue was whether or not the Minister (through the CRA) has the authority to compel oral answers to oral questions from taxpayers or their employees.
In his ruling, Justice of Appeal Rennie stated “…the Minister does not have the power to compel a taxpayer to answer questions at the audit stage…”, however, it may be in the best interest of the taxpayer to provide reasonable answers to reasonable questions in order to expedite the process. The full entire ruling can be found and read here
This ruling simply re-confirms, that even in an audit, you (and your staff) have the right to remain silent, and that the Minister’s powers are limited to physical evidence.
An exception to this is you are required to provide assistance in locating and providing that physical evidence, which may need to be orally.
Personally, when dealing with a very large number of taxpayers on our own office, we want to be certain that the file that the CRA is talking about is the same file in front of us. As such, we are a firm believer in the Canadian Home Builders’ Association motto that is ironically supported by the Government of Canada: “Get it in Writing.”
I am not advocating answering no questions, as the Minister (CRA) still has the ability to issue reassessments, thereby shifting burden of proof to the taxpayer further to disprove the reassessment.
I am, however, advocating at a minimum to get those questions detailed, and in writing. This will help to provide clarity and allow for proper thought in your answers as opposed to stating something with unintended consequences.
Here is a little example of what happens when you don’t get it in writing: in my dark-side days as a field auditor with the (then called) CCRA, we used to ask prying questions that the taxpayer had no idea they were answering.
For example, in one particular circumstance I was reviewing a file where it was suggested that the taxpayer was doing under-the-table cash jobs. This meant I would have to be creative in figuring out the taxpayer’s cost of living, and ruling out other sources of income.
Meeting in a quiet restaurant in a small Saskatchewan town, I was eventually able to have the taxpayer relaxed enough to think that we were having a normal conversation. Just a couple of ‘Riders fans that aren’t a fan of Ottawa, but hey, I have a job to do. When the taxpayer started complaining about the government, I joined in:
“Hey, I hear you. I’m not some suit from Ottawa. I’m from Regina. I mean both the feds and the province already get enough out of me from tax on my smokes.”
I don’t smoke.
The taxpayer didn’t know that, but the anger was timely because the province had just raised up the cigarette tax the previous year so packs were well over $6 a pack.
“Yeah I know”, the taxpayer said, “I smoke a pack a day”.
Music to my ears as a tax auditor, the taxpayer just told me that they need ($6 x 365) = $2,190 of after-tax income just to feed their cigarette habit.
I continued, “That’s terrible! Between getting our money on that, and getting it at the casino, it’s just crazy how much they make it hard to enjoy our weekends.”
“Yeah, I don’t win nuthin’ at the casino either,” the taxpayer stated.
To me I heard ‘I didn’t have any non-taxable casino winnings. In fact, the taxpayer likely had lost money in the year. This means the taxpayer needed to have more disposable income to gamble.’
The conversation continued for a good 30 minutes. Once I was armed with more knowledge of the taxpayer’s lifestyle and spending habits, I went to work. Bank statements, receipts, mileage information, fuel costs, type of vehicle, etc.
We would use information tools not only from Statistics Canada for price of fuel in different regions, we would also use websites like www.fueleconomy.gov that provide different estimated fuel consumption based on type of use and mileage going back to cars from the 1980s. Then we work backwards to see if the numbers made sense with respect to the taxpayer’s vehicle and costs.
When it was all said and done, I used the results of our conversation against the taxpayer. When I was finished, I found over $30,000 in an income variance between the taxpayer’s living costs and change in net worth compared to what was reported. Not only that, but the taxpayer had already backed themselves into a corner because of the questions that were answered which I had documented.
My guess is that in conclusion, the taxpayer thought they should have got the questions in writing instead of meeting me at a restaurant.
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Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html
From the Fraser Institute
Approximately three years have passed since the end of the initial phase of the COVID pandemic that saw large swathes of the economy shuttered for most of the 2020-2021 period. And it’s almost nine years since the 2015 federal election, which resulted in a majority government for Justin Trudeau’s Liberals. So, it’s a good time to do a pulse check on Canadians to see how they’re faring and feeling about the country.
Overall, the news isn’t particularly cheerful, on either front.
Dealing first with economic prosperity, the big story is that Canada’s population has been growing faster than the volume of output produced by the economy (defined as gross domestic product, adjusted for inflation). This means the economy has been shrinking on a per-person basis, prompting some analysts to coin the term “per-person recession” to describe the performance of Canada’s economy since 2022.
The trend has been stark in the last two years, but it started earlier. The absolute level of per-person output is smaller today than in 2018 in seven of 10 provinces including Ontario. More importantly, income and earnings growth has been essentially stagnant for most Canadians over roughly the last decade. Canada has also fallen further behind the best-performing advanced economies on productivity, per-person income and real wages.
What about public attitudes? A recent Ipsos survey finds 70 per cent of Canadians think the country is “broken,” an opinion especially common among young adults. Older Canadians have a more positive view of things. A Statistics Canada survey shows a significant drop in the percentage of Canadians reporting high levels of “life satisfaction.” The same survey shows that 40 per cent of respondents between the ages of 25 and 54 say it’s difficult to meet their financial needs.
The shock delivered by the recent bout of high inflation no doubt has contributed to this gloomy assessment. And it doesn’t help the public mood that housing has never been less affordable, that crime is on the rise, and that basic health-care services are harder to access than they were five or 10 years ago.
Other data paint a more nuanced picture of how Canada is doing. The Organization for Economic Cooperation and Development (OECD)—a collection of mostly rich countries—publishes a “Better Life Index,” which aims to gauge overall citizen wellbeing. In the most recent iteration of the Index, Canada beats the OECD average on income, employment levels, education attainment, life expectancy at birth, and environmental quality, among other indicators. Our relative ranking has slipped in some areas—a worrisome sign—but overall, Canada puts up a decent score.
Still, stagnant real incomes and an economy that’s expanding more slowly than the population is not an ideal place to land. To do better, Canada will need at least a few years of stronger per-person economic growth. This will require a turnaround in our notably lacklustre productivity record and a sustained pick-up in business investment. Revisiting the federal government’s ambitious immigration targets may also be necessary, as Trudeau government ministers have publicly (albeit somewhat sheepishly) acknowledged.
Getting the economic fundamentals right is essential to making progress on most economic and social indicators. As the OECD notes, “while money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being.”
Author:
News Item: A senior government official told CBC News the government is in the final stages of drafting “major legislative and regulatory changes” to better position CBC for the future as it grapples with seismic developments in the news and broadcasting space.
Having shovelled billions into the maw of CBC for almost a decade to keep its creaky mandate going amid “seismic developments” it seems an odd decision for the Liberals to now re-define that same mandate. With less than a year left till an election (it could be a lot less) in a bureaucracy where time is measured in decades (unless it’s climate) the idea of getting anything this profound done before Pierre Poilievre gets his hands on the Corp is risible.
Poilievre has made clear his intentions to stop the billion-dollar gravy train to CBC. Clearly the rethink is a political feint to assuage its aging progressive base that remembers the good old days of Peter Gzowski and Don Harron. Sure, the model is broken, but if we call Poilievre a mini-Trump and demagogue Elon Musk often enough (and have our paid scribblers repeat the charge) can we turn this scow around in time to save our hides? Desperate times call for disparate measures.
So what is going on here? Has Team Trudeau just realized that the gig is up for the CBC’s traditional media structure? Do the threats about jailing purveyors of alternate narratives indicate they’re doubling down for their pals in big Telcos? In dumping CEO Catherine Tait have they gotten the message that global communications giants don’t give a flip about the Liberals’ protectionist plans?
Example: Netflix is pulling its financial support of programs in the Canadian film and TV sector due to the new Online Streaming Act, Trudeau’s hapless attempt to make foreigners prop up Canada’s failing print and TV production. Out of sight, out of mind. Spotify also announced it was increasing prices in Canada— because of you-know-what.
While French-language Radio Canada might still have a cultural argument in Quebec to make for its continued existence, no such imperative faces English CBC services anymore. The private production side and the digital world are perfectly capable of finding the next Schitt’s Creek or Pottery Challenge without air cover from the feds. So the Libs survival strategy now is attack, attack, attack.
Perhaps if enough captive media slappies demonize Poilievre (“The Conservative leader’s rhetoric seems tailored for a media climate that rewards maximum drama” whines CBC) protectionist intimidation could halt the growth of internet opposition.. Likely not. As blogger Mike Benz notes, “The best way to start the story of Internet censorship is with the story of Internet freedom.”
Will pumping CBC’s tires/ banning internet critics actually stem the tide? CBC’s national news division is compromised beyond recognition. In concert with the huge private telecommunications firms they’ve also hollowed out local/ regional economies, leaving skeleton operations beholden to head offices in Toronto and Ottawa. And now that independent podcasts and sites emerging since the 1991 privatization of the the internet are filling these gaps Trudeau thinks it’s time to re-think CBC so it can finish off his antagonizers?
While the precise strategy of Trudeau’s hubris remains opaque, in the United States the issue between old media and new media is now existential. With Elon Musk coming out in favour of Donald Trump and a new coalition with RFK Jr. Hillary Clinton has raised the banner of jailing those whom she believes purvey “disinformation and misinformation” (translation: things she disagrees with) .
In the past the Grift Queen needed only to make some phone calls to insider media to get her agenda bannered across the major press. Her acolytes would go to the Sunday Morning TV panels to spin her take on affairs. The FBI would cower. Now she’s a remnant of a toppled order. She seems to be saying, why can’t they all be like Kamala Harris and follow my orders?
But new digital media defies her by aligning with Trump. One need only look at the polls indicating that the 18-35 year olds are moving toward Trump to see the demographic peril for the Clinton/ Obama insiders. No wonder the U.S. Defence department and Homeland Security are funnelling millions to prestigious American universities to “study” what can be done about “misinformation” from critics like Trump. Spolier alert: jail time.
Their old order is dying. Even reliable squishes like Facebook’s Mark Zuckerberg are having second thoughts about Harris. This past Saturday SNL savaged Harris, Biden and Tim Walz in a skit that was unthinkable even six weeks ago. And that pillar of Democratic orthodoxy 60 Minutes broadcast a damning clip with Harris in which host Bill Whittaker asked her tough questions— which she fumbled. (CBS quickly scrambled to bury the clips.)
You’d almost think the Media Party are looking to distance themselves from a Harris train wreck. So Clinton and her shell-shocked allies want arrests and pronto. Indeed Musk confessed this week that should Kamala Harris prevail next month he will probably be in jail in six months from the new administration taking office.
One of the favourite claims of the old media looking to rough up Trump/ Poilievre is the Hitler meme. We are told that they read his book, follow his agendas and want to eliminate their racial enemies. But the more apt comparison of eras is not Germany 1933-45 but revolutionary France in the late eighteenth century.
There, dissolute snobs with a hereditary claim to being obeyed suddenly found themselves outflanked by people they hardly deigned to acknowledge let alone understand. Expecting protection from the trappings of their power they never saw the Reign of Terror till it walked up the stairs of their palaces. The guillotine ended their pleas for privilege.
It may not be that bloody in modern terms. But the last gasp of a dying elite will look a lot like Marie Antoinette clutching her pearls on the way to meet Madame Lafarge.
Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.
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