Stung by criticism that it has been winking at offshore tax evasion, Prime Minister Stephen Harper’s government has just promised a crackdown on Daddy Warbucks scofflaws that was skilfully packaged to have the ring of toughness to it.

Revenue Minister Gail Shea warns that miscreants with undeclared taxable assets offshore should come clean and “declare all their assets now before the agency (Canada Revenue Agency) comes after them.” Her colleague Max Bernier, minister for small business, boasts that a “SWAT team” is being readied to chase them down. Certainly, that’s what hardworking, taxpaying Canadians might hope. There’s nothing more demoralizing than seeing people scam the system.

But for all that, Ottawa’s crackdown looks to be more bark than bite. The opposition New Democrats and Liberals have ridiculed it as “window dressing” and a “shell game” designed to defuse public criticism more than anything else.

While that may be harsh, the Conservative government does appear to be trying to spook wealthy tax dodgers into voluntarily declaring their assets with a crackdown on the cheap. Of the $30 million Shea announced for new measures to track down tax evaders and aggressive avoiders — spread over five years, no less — just $15 million is new money; the rest is recycled. And the so-called SWAT team is shaping up to be a 10-person outfit at best. Meanwhile, the CRA is expected to trim $300 million from its budget in the next three years and cut 3,000 jobs, a prime victim of federal deficit-cutting.

While it’s good to see Ottawa taking some action, it’s hard to believe this modest initiative can have much impact on a hugely complex offshore tax-dodging industry. Canadians for Tax Fairness, a group that campaigns for sharing the burden more equitably, estimates that affluent Canadians have put $160 billion into offshore havens, costing us nearly $8 billion a year in foregone tax revenues. The scofflaws among them have a lot invested in not being easily rattled into declaring their assets.

To be fair, Ottawa is also bringing in new requirements that banks report to CRA international transfers above $10,000, making it easier to track assets. The government will require people with large assets abroad to provide more information in tax filings. And it is rewarding people for turning in cheats. As well, it has had some success boosting the number of voluntary disclosures in recent years.

All this gives Ottawa reason to hope that it can recoup $2 billion or more in the next few years.

But globally, offshore tax havens have burgeoned into a $20-trillion business that in the government’s own words encompasses everything from “complex corporate schemes, individuals using offshore jurisdictions of concern, ‘tax havens,’ or tax shelter schemes that are used to avoid or evade tax.” Are we to believe that a small CRA team is going to be able to police so wide a waterfront? That’s a stretch.

There’s also the matter of collecting on the taxes that are tracked down. CRA proudly says it has audited 7,761 offshore cases since 2006 and identified some $4.58 billion in taxes owing. What’s less clear is how much the government has managed to collect.

Rather than the solution that Ottawa is touting to a multi-billion-dollar problem that undermines public confidence in the tax system and its fairness, this is but the first step toward a fix. It could have been bolder.

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