From: AlanBaggett@volcanomail.com   
      
    Canada Revenue Agency falling behind as uncollected taxes owed rise to $44   
   billion  :CRA SOTW   
      
   More Canadians and corporations failed to pay Canada Revenue Agency upon   
   filing returns   
       
   Dean Beeby • CBC News    
      
   The amount of tax that Canadians admit to owing Ottawa but haven't paid rose   
   to a record $43.8 billion this year, despite a Liberal government promise to   
   "stabilize" that sum.   
      
   And an internal Canada Revenue Agency (CRA) projection obtained by CBC News   
   says the amount of unpaid tax owed is set to hit more than $47 billion by 2020.   
      
   The steady increase in the tax debt — up by about $2 billion annually since   
   the Liberals came to power — comes despite a major investment in the 2016   
   federal budget to wrestle down fast-rising levels of uncollected tax debt.   
      
   The rise in the tax debt level over the last decade or so appears to be linked   
   to major staff reductions at CRA under the former Conservative government's   
   deficit-cutting program.   
      
   The 2016 Liberal budget gave the CRA $351.6 million over five years "to   
   improve its ability to collect outstanding tax debts."   
      
   And the agency says it's on track to meet its target of collecting $7.4   
   billion in additional tax debt over those five years.   
      
   But that effort hasn't stopped the total from growing — by 5.6 per cent in   
   2017-2018 alone, far faster than inflation or the economy itself.   
      
   Undisputed amounts   
   The agency currently does not collect about $8.40 for every $100 in taxes that   
   are due.   
      
   'Tax debt' refers to undisputed amounts of income tax, GST and other taxes   
   owed by Canadians – as well as penalties and interest – but does not   
   include taxes due that Canadians have challenged and not paid.   
      
   Unlike the fast-rising tax debt, that 'disputed' tax sum has stabilized at   
   about $14 billion over the last three years.   
      
   Tax debt is also distinct from undeclared taxes owed in the underground   
   economy, which Statistics Canada says hid some $45.6 billion in economic   
   activity in 2013. It is also separate from the unknown amount of tax evaded   
   through the use of offshore tax    
   havens and other tax dodges — something which other CRA programs are   
   pursuing.   
      
   Indeed, the agency says its success in rooting out some underground activity   
   and tax-avoidance has contributed in part to the growth in the tax debt.   
      
   But an internal document suggests the CRA still lacks the staff to keep up   
   with the growth in the uncollected tax amount.   
      
   "During the first four months of the 2017/18 [fiscal year], intake has been   
   higher than our capacity to assign accounts to officers," said an October 2017   
   update on 'Managing the Tax Debt.'   
      
   "The number of unassigned accounts increased YOY [year over year] (July) by   
   approximately 23%" — or about 350,000 unassigned accounts.   
      
   CBC News obtained the update through the Access to Information Act.   
      
   Half owed by individuals   
   Close to half of the unpaid tax debt is owed by individual Canadians.   
   Corporations and businesses account for the remainder, which includes unpaid   
   GST and payroll deductions not turned over to Ottawa.   
      
   The internal document indicates that more Canadians are filing their income   
   tax returns each year without paying the tax they owe. Last year, there was a   
   10 per cent rise in these so-called 'debit returns' — up by about 600,000   
   returns — which added $   
   1.2 billion to the tax debt total.   
      
   Jeremy Ghio, press secretary for National Revenue Minister Diane   
   Lebouthillier, said the agency "continues to develop and implement collection   
   strategies to improve its capacity to manage tax debt and avoid new debt from   
   accumulating."   
      
   Ghio noted that, until Budget 2016, the tax debt had grown by an average of   
   7.8 per cent annually. CRA's new resources helped reduce the growth rate to   
   5.6 per cent in 2017-2018, he said.   
      
   A CRA watchdog group said the rapid rise in the tax debt over the last decade   
   or so is a direct result of public service downsizing – a problem the   
   Liberals have still not resolved.   
      
   "It coincides directly with dramatic cuts to staff and office closures," Diana   
   Gibson of Canadians For Tax Fairness said in an interview from Victoria.   
      
   "We do not have adequate staffing levels to actually tackle the debt."   
      
      
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