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
The whistleblower has always been anonymous, and it remains very suspicious that the very organization he created would turn on him after receiving an anonymous letter that they admitted may not have been credible.
World Economic Forum founder Klaus Schwab stepped down from his chairman position at the organization on April 20, 2025, amid accusations of fraud. Our computer had forecast that the WEF would enter a declining trend with the 2024 ECM turning point. This staged coup happened about 37 years after the first Davos meeting (8.6 x 4.3). From our model’s perspective, this was right on time. Now, Schwab and the WEF are working to repair ties.
An anonymous whistleblower claimed that Klaus Schwab and his wife collaborated with USAID to steal tens of millions in funding. The whistleblower has always been anonymous, and it remains very suspicious that the very organization he created would turn on him after receiving an anonymous letter that they admitted may not have been credible. Something like this would never be acceptable in any court of law, especially if it’s anonymous. It would be the worst or the worst hearsay, where you cannot even point to who made the allegation.
Back in April, the WEF said its board unanimously supported the decision to initiate an independent investigation “following a whistleblower letter containing allegations against former Chairman Klaus Schwab. This decision was made after consultation with external legal counsel.”
Now, the WEF is attempting to repair its relationship with its founder ahead of the next Davos meeting. Bloomberg reported that the WEF would like to “normalize their relationship [with Klaus Schwab] in order to safeguard the forum and the legacy of the founder.”
Peter Brabeck-Letmathe has replaced Schwab for the time being, but is less of a commanding force. Schwab’s sudden departure has caused instability in the organization and its ongoing mission. Board members are concerned that support for the organization will begin to decline as this situation remains unresolved.
The World Economic Forum’s annual revenue in 2024 was 440 million francs ($543 million), with the majority of proceeds coming from member companies and fees. Yet, the number of people registered to attend the 2025 Davos event is on par if not slightly exceeding the number of participants from the year prior.
Schwab’s departure has damaged the Davos brand. There is a possibility that the organization is attempted to rebrand after Agenda 2030 failed. The WEF attempted to move away from its zero tolerance stance on ESG initiatives after they became widely unpopular among the big industry players and shifting governments. The brand has attempted to integrate the importance of digital transformation and AI to remain relevant as the tech gurus grow in power and popularity. Those who are familiar with Klaus Schwab know the phrase, “You will own nothing and be happy.” These words have been widely unpopular and caused a type of sinister chaos to surround the brand that was once respected as the high-brow institution of globalist elites.
European Central Bank President Christine Lagarde was slated to replace Schwab in 2027 when her term ends, and all reports claimed that he was prepared to remain in the chairman role for an additional two years to ensure Lagarde could take his place. What changed seemingly overnight that would cause the organization to discard Schwab before he was due to retire?
Schwab denies any misconduct and filed lawsuits against the whistleblowers, calling the accusations “calumnious” and “unfounded.” He believes “character assassination” was the premise of the claims.
I am no fan of Klaus Schwab, as everyone knows. I disagree with his theories from start to finish. Nevertheless, something doesn’t smell right here. This appears to be an internal coup, perhaps to distract attention from the question of alleged funds for the WEF from USAID, or to try to salvage the failed Agenda 2030. Perhaps they will claim that no misconduct had occurred since DOGE did not raise concerns or there is a possibility that those behind the internal coup are concerned that Schwab’s counter lawsuit could uncover new corruption. The investigation into Schwab has not concluded, but after only three months, the WEF would like to wrap it up. It appears that the WEF does not want to welcome Schwab back; rather, they would like to ensure an amicable resolution to maintain both the brand’s reputation as well as the founder’s.
Governments are not real estate developers, and Canada should take note of the failure of New Zealand’s cancelled program, highlights a new MEI publication.
“The prospect of new homes is great, but execution is what matters,” says Renaud Brossard, vice president of Communications at the MEI and contributor to the report. “New Zealand’s government also thought more government intervention was the solution, but after seven years, its project had little to show for it.”
During the federal election, Prime Minister Mark Carney promised to establish a new Crown corporation, Build Canada Homes, to act as a developer of affordable housing. His plan includes $25 billion to finance prefabricated homes and an additional $10 billion in low-cost financing for developers building affordable homes.
This idea is not novel. In 2018, the New Zealand government launched the KiwiBuild program to address a lack of affordable housing. Starting with a budget of $1.7 billion, the project aimed to build 100,000 affordable homes by 2028.
In its first year, KiwiBuild successfully completed 49 units, a far cry from the 1,000-home target for that year. Experts estimated that at its initial rate, it would take the government 436 years to reach the 100,000-home target.
By the end of 2024, just 2,389 homes had been built. The program, which was abandoned in October 2024, has achieved barely 3 per cent of its goal, when including units still under construction.
One obstacle for KiwiBuild was how its target was set. The 100,000-home objective was developed with no rigorous process and no consideration for the availability of construction labour, leading to an overestimation of the program’s capabilities.
“What New Zealand’s government-backed home-building program shows is that building homes simply isn’t the government’s expertise,” said Mr. Brossard. “Once again, the source of the problem isn’t too little government intervention; it’s too much.”
According to the Canadian Mortgage and Housing Corporation, Canada needs an additional 4.8 million homes to restore affordability levels. This would entail building between 430,000 to 480,000 new units annually. Figures on Canada’s housing starts show that we are currently not on track to meet this goal.
The MEI points to high development charges and long permitting delays as key impediments to accelerating the pace of construction.
Between 2020 and 2022 alone, development charges rose by 33 per cent across Canada. In Toronto, these charges now account for more than 25 per cent of the total cost of a home.
Canada also ranks well behind most OECD countries on the time it takes to obtain a construction permit.
“KiwiBuild shows us the limitations of a government-led approach,” said Mr. Brossard. “Instead of creating a whole new bureaucracy, the government should focus on creating a regulatory environment that allows developers to build the housing Canadians need.”
The MEI viewpoint is available here.
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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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