The government wants to share more of your tax information
But buried on page 37 of a “supplementary information” document provided by the government on Tuesday were some key changes to how, and when, Canadian authorities can share your tax information.
None of these changes are in place yet. The government has merely announced its intention, through the budget document, to pass legislation and make the alterations.
But privacy advocates say that bundling these proposals into the budget bill means they won’t get the scrutiny they deserve.
Here’s what you need to know.
The proposals are linked to the sharing of Canadians’ tax information (held by the Canada Revenue Agency), both with authorities in other jurisdictions and with Canadian police.
Over the years, the government has signed on to several dozen international tax treaties, tax information exchange agreements and the Convention on Mutual Administrative Assistance in Tax Matters (which has 117 signatories). Partners include the U.S., Brazil, Belgium, France, Israel, Russia and China.
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These agreements open the door to varying levels tax information sharing, but the Department of Justice has reportedly identified some areas for improvement. As a result, the government wants to expand the CRA’s ability to share personal tax information to assist law enforcement bodies abroad.
Right now, the CRA can do this only when the alleged crime involves tax evasion. This change would mean that the CRA could also share tax information when someone is being investigated for acts that, if they were committed in Canada, would constitute “terrorism, organized crime, money laundering, criminal proceeds or designated substance offences.”
Secondly, the budget proposes that the legal tools already available under the Mutual Legal Assistance in Criminal Matters Act (like court orders) could be used to obtain and share tax information “for criminal law purposes.”
“It will be necessary for the Department of Justice to obtain two court orders from a judge (one to gather information and a second one to send it to the other jurisdiction),” noted a official at Finance Canada on Thursday.
“The requirement to obtain two court orders provides significant protections to the rights of the person whose information is being sought.”
Finally, the budget also makes a proposal linked to the Excise Act, which covers the taxation of products like tobacco and alcohol. The government wants to grant Canadian police bodies the ability to get a court order and access confidential information under the Excise Act. That’s a power they already have under the Income Tax Act.
Why is the government doing this?
The government argues that the changes linked to international investigations are “vital to the global fight against serious crime.”
There’s also a problem of consistency and fairness, the budget annex notes.
“While many of Canada’s mutual legal assistance partners are able to share tax information in response to a request from Canada for mutual legal assistance, Canada lacks the legal authority to reciprocate,” it reads.
Finance Minister Bill Morneau also defended the moves on Thursday, saying they target criminals.
“We believe that this sort of effort is one that’s advancing our cause of ensuring tax fairness and ensuring that we don’t have people doing things that might be quite inappropriate, in terms of things like terrorist financing or money laundering,” he said.
What are the potential problems?
Canadians will want to know if they could be “thrown under the bus by Canadian police authorities,” according to Michael Bryant, executive director of the Canadian Civil Liberties Association.
He says he wants to have reassurances from government that search and seizure laws and the privacy laws of Canadians will be respected.
“Will Canadians be notified in the event that their information is being shared with another country? That’s a questions Canadians are going to want to ask,” Bryant said.
He said we need to know more details on the how the laws will effect specific crimes outside tax evasion.
“Are we helping other countries prosecute Canadians for cannabis?” he questioned.
One major concern is the fact that the provisions are part of the budget.
He says provisions on protections about Canadians’ privacy should be debated separated from the budget.
“We need to see it in a bill and it needs to be a bill that’s debated separate from the budget bill because everybody on Parliament Hill knows very well that budget bills in majority governments pass,” Bryant said.
*with files from Rebecca Joseph
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