With tax season looming, a Conservative MP from Alberta is preparing to table a motion designed to tackle “grossly negligent actions” by the Canada Revenue Agency.
Global News has learned that Pat Kelly, MP for Calgary Rocky Ridge, intends to table a Private Member’s Motion on Thursday calling on the House of Commons Finance Committee to draft a new law — approved by all parties — that will better protect Canadian taxpayers from “harmful behaviour” by the federal agency.
More specifically, the desired legislation would amend the Taxpayer Bill of Rights, so that if the CRA is found to be grossly negligent toward a taxpayer, that person could seek legal remedy.
At the moment, the best a taxpayer can do is fight the agency in court if it disagrees with an assessment, incurring significant legal fees in the process. If the judge rules in their favour, the taxes are struck, but by then the person may have lost their livelihood.
“We’re not trying to pick on the CRA … we want to focus on the somewhat rare cases where gross negligence is at play,” Kelly said.
“Complaints of issues dealing with the CRA were among the very first contacts I had with constituents, and people in general, after I became a member of Parliament.”
According to Kelly, the motion was partly inspired by the case of B.C. resident Irvin Leroux. His story stretches back to the mid-1990s, when the Prince George businessman’s receipts were accidentally shredded by the CRA. The government concluded he owed $1 million, but Leroux said he did nothing wrong, prompting years of legal wrangling. After a bitter, multi-million dollar battle, the 72-year-old agreed to pay $10 towards the agency’s legal fees in January.
WATCH: 16×9 profiled Leroux and his case in 2012
With a Superior Court decision now on the books that clearly states that the CRA owes a duty of care to taxpayers, Kelly said the time is right for Ottawa to step in. He also cited the example of one of his own constituents, who filed his return and followed “to a tee” a scenario for deductions right from the CRA’s website. He was re-assessed anyway, and the deductions were rejected.
“If the CRA is going to coach a taxpayer into making an incorrect deduction, or decides it’s not right afterward, that’s not right or fair,” Kelly said.
In addition to requiring the CRA to stand behind the instructions on its website, Kelly’s motion on Thursday will also ask the Finance Committee to look into the role of the Taxpayers’ Ombudsman, potentially giving the ombudsman powers of investigation and enforcement. Currently, he or she can only make recommendations and help educate taxpayers.
Aaron Wudrick, federal director of the Canadian Taxpayers Federation, said his organization was aware of Kelly’s planned motion and thinks it’s a good idea. Unless there’s an incentive for the CRA to behave better, Wudrick said, it will always be more aggressive than necessary.
“I think a lot of the time when we talk about CRA there’s a lot of focus on cracking down on tax evasion,” he noted.
“But the flip-side is that there are a lot of innocent individuals where the CRA sort of abuses their power … it can ruin people’s lives.”