The Canadians who have been defrauded would rightly lose confidence in the institution of government generally.
Also, in this case, the Canada Revenue Agency has extraordinary powers and extraordinary access, and can be the vector by which individuals end up jailed or fined, have their wages garnished and assess massive penalties. This organization—this minister—opted instead to lie by omission to Canadians. Canadians were expected to believe that everything was okay, because they weren't told any different.
Does it cause irreparable harm to the institution of government when this information is concealed from Canadians?