Canada’s federal budget 2016 earmarked nearly $444 million over five years for the Canada Revenue Agency to go after tax cheats, amid revelations that the government’s tax collector offered an amnesty to wealthy clients of KPMG who took part in the accounting giant’s offshore tax evasion racket.

“As the CRA has a proven track record of meeting expectations from targeted compliance interventions, Budget 2016 accounts for the expected revenue impact of $2.6 billion over five years from these measures,” the Liberal government’s maiden budget plan reads. “These amounts do not reflect the gain that will be realized by provinces and territories, whose tax revenues will increase as a result of these initiatives.”

Civil society groups, which have long been calling for tougher action against tax evasions as the amount of money stashed in offshore tax havens by Canadians hit $199 billion last year, applauded the move.

“Ramping up the Canada Revenue Agency’s capacity to tackle tax havens is a smart move that can pay off.” Dennis Howlett, Canadians for Tax Fairness executive director, said. “Now the CRA needs to mobilize a sophisticated campaign to target both the rich taxdodgers and the financial advisors who facilitate this trend.”

Canadian Tax Fairness has recommended using the extra money towards boosting the CRA’s capacity for investigation and enforcement of tax haven cases, prioritizing and prosecuting big tax avoidance schemes rather than focussing on charities, non-profits and smaller cases, proceeding with a stalled court case against KPMG’s activities on the Isle of Man, implementing a Tax Gap report, boost the CRA’s capacity for investigation and enforcement of tax haven cases.

Just two weeks ago, the CBC uncovered that the CRA under the former Conservative government had secretly offered amnesty to multi-millionaire clients of KPMG caught in an offshore tax racket on the Isle of Man, granting them immunity against all future civil and criminal prosecution and waiving all fines and penalties.

“In times of growing inequality, to see people caught hiding millions from the government get off without even a slap on the wrist is simply appalling,” NDP Finance Critic Guy Caron said following the revelations. “Failure to act on this case would send a message to the wealthy that they can get away with tax fraud without penalties—the Liberals need to act now.”

[Photo Credit: Elliott Brown]