National Revenue Minister Kerry-Lynne Findlay defended the decision Tuesday, explaining that she believed officials at the agency wanted to improve efficiency.
“Their reasons would be their own but certainly I believe it’s for efficiency reasons,” said Findlay, after promoting previously-announced federal tax incentives at a residence for seniors in an Ottawa suburb.
“In terms of the agency itself, they made their internal decision. That decision was taken before I became minister and my expectation (is to have) a robust system that continues to go after those who evade tax and those who are involved in aggressive tax planning that is inappropriate. And as long as that system remains robust, I’m confident we can move forward.”
Findlay, who was appointed as revenue minister by Prime Minister Stephen Harper in July, also defended $8 million in new spending at the agency from the 2012 federal budget to crack down on charities. The measures have been promoted by ministers in the Harper government as an attempt to investigate political activity by environmental organizations.
But despite the new spending, only one charity, Physicians for Global Survival, saw its charitable status revoked for exceeding requirements that prohibit a charity from spending more than 10 per cent of its budget on political activities to advocate for a cause.
“As far as numbers, it isn’t about numbers,” said Findlay. “It’s about who’s complying and who isn’t and again, I expect and anticipate a robust system for looking at charitable organizations as far as their political activities are concerned.”
A spokesman for the agency also said it was “too early” to evaluate results of the new spending, in terms of sanctions leveled against charities, since it was still in its “early stages.” But he explained that the money was used to create some new reporting and compliance rules for charities as well as websites and “educational activities.”
Meantime, the elimination of the agency’s Special Enforcement Unit, established in the 1980s to fight organized crime, was highlighted in a Radio-Canada investigation that featured former federal auditors who criticized the cuts and alleged that the agency was infiltrated by criminal organizations. The television network’s investigative show, Enquete, reported that the dismantled special unit worked closely with police and was involved in several high-profile raids and dozens of arrests in recent years.
The report interviewed an auditor from the unit who said he was forced to knock on the door of a reputed figure connected with organized crime in Montreal, Nicolo Rizzuto, to retrieve a September 2007 cheque from the agency for about $400,000 that was apparently sent in error.
The commissioner of the agency, Andrew Treusch, said in a statement last week that it had launched an internal investigation into the incident. Treusch said that he had not been advised of any criminal wrongdoing in his initial inquiries into the transaction.
The agency, which has also recently announced plans to crack down on Canadians who hide money in overseas tax havens, has predicted a reduction in its workforce of about 3,000 employees over the next three years, down from an estimated 41,144 in full-time equivalent workers in 2012-13.
The agency offered a general explanation about its decision to eliminate the unit and transfer its roles over to a general branch responsible for compliance and enforcement programs, but was unable to immediately provide the detailed justification for the changes.
Dennis Howlett, executive director of an advocacy group called Canadians for Tax Fairness, said that some cuts were justified as the agency moves to accept and process more online tax reforms by computers, but not at the levels announced by the department.
He also suggested that investments to increase audits of charities were introduced for the wrong reasons.
“Most of that, I think, was politically motivated, to go after environmental groups because of their opposition to pipelines,” said Howlett. “Many charities and international development agencies and so on are put in an untenable situation of not really being able to fulfill their purpose if they’re prevented from speaking out politically about some of these issues.”
Original Article
Source: canada.com
Author: Mike De Souza
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