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Ferguson’s office looked at eight tax measures and found four of them were not evaluated.

In the case of the First Time Home Buyers’ Tax Credit, it found Finance identified some risks regarding the credit, which was introduced by the government to stimulate housing demand during the financial crisis in 2009. But, despite claxons going off, Finance did not evaluate the credit in the years after its implementation.

“The Department does not have complete information to determine if these tax measures are relevant and performing as intended,” Ferguson’s office concluded.

While it is the reputation of Canada’s venerable Department of Finance that will take the hit from the auditor’s report, the blame lies squarely with a government that has made a Swiss cheese from the tax code for political advantage.

Years of intense political pressure appear to have beaten down whatever challenge function used to exist at Finance. Hard questions are no longer asked about measures the Harper government would like to see enacted.

More fundamentally, Finance was never conceived as an audit department, evaluating tax credits in the same way that the Treasury Board tracks program spending. That burden has grown in line with the number of tax credits introduced in recent years.

Parliament should take back control of tax-based expenditure — demanding a full picture of what is being spent and what money spent through the tax system is accomplishing.

At the very least, there should be a review mechanism imposed on tax credits, similar to the five-year review under the Financial Administration Act for all grants and contributions.

As it stands, when it comes to tax-based expenditures, the Finance Minister has a great deal of power and very little accountability.

National Post

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