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Tax revenue is the underlying foundation of every aspect and activity of government, from search-and-rescue to trade promotion. Put simply: If government cannot fund, government cannot function. As a result, whenever a government advances a new policy or program, the first questions asked are inevitably “What will this cost?” and “Where will the money come from?”

How the government raises that money is every bit as important as how it spends it. Although there is a long list of revenue sources for the government, the overwhelming majority of funds pass through the CRA. So it follows that the CRA plays a uniquely important role in the functioning of the government of Canada, and as such, must be subject to a high level of scrutiny to ensure that it is managed in a competent manner.

It used to be that the CRA didn’t attract a great deal of attention, either from the public or from the government. As it is the only branch of government to turn a profit, there has always been a temptation to simply let it go about its business – “If it’s not broken, don’t fix it.” However, that confidence is being eroded as we see the growing number of overseas tax evasion disclosures.

The CRA repeats the same words after every incident: how they are working hard to catch tax cheats, that they take it very seriously and so on, but the rhetoric belies the fact that their efforts and results are disappointing in the extreme. For example, the CRA still refuses to measure the tax gap – the difference between what the CRA actually collects and what it should be collecting. Some of our biggest trading partners, the United States, Mexico and the United Kingdom, measure the tax gap because they believe it is an important tool to identify the size of overseas tax evasion.