This is not the time to cut the federal role, which is what is anticipated, but broaden it. There is room to raise rates. But another approach is to broaden the tax base by extending the GST to financial activities and services; capping lifetime contributions to tax shelters, such as the tax-free savings account; introducing an inheritance tax; eliminating deductions for stock options and capital gains; tightening tax expenditures; and tackling tax evasion more vigorously—and this is my last recommendation. The strong game means that you get tougher on tax crime, not more lax.
In 2007 a departmental performance review of CRA noted that the reporting compliance sector conducted 27,000 audits of international and large corporations and recovered $5.7 billion. It also audited 321,000 small and medium-sized businesses and recovered $2 billion.
Clearly, CRA can be a profit centre for the Government of Canada if the staffing is maintained, yet the reporting compliance department will see a 25% reduction in staff, with more staff taken away from criminal investigations and auditing international and large businesses, and more people put on small and medium-sized businesses. At the same time, just weeks ago CRA announced it would be reducing red tape. This is the wrong direction to go in for a government that prides itself on being tough on crime.
Thank you.