The amount of unpaid taxes that Canadians owe the federal government reached a record $43.8 billion this year, confirms new data released by the Canada Revenue Agency (CRA).
A CRA forecast projects that the amount of unpaid taxes owed will exceed $47 billion by 2020. This news comes after the current Liberal Government of Prime Minister Justin Trudeau promised to crack down on tax cheats in Canada.
The steady increase in the tax debt — which has been growing by about $2 billion a year since the Liberals came to power — follows a major investment in the 2016 federal budget to locate and collect tax debt owed by individual Canadians and corporations.
The rise in the tax debt level over the last decade is linked to major staff reductions at CRA under the former Conservative government's deficit-cutting program. The 2016 Liberal budget gave the CRA $351.6 million over five years to improve its ability to collect outstanding tax debts. And the agency says it's on track to collect $7.4 billion in additional tax debt over those five years.
But that effort hasn't stopped the total amount of tax money owed to Ottawa from growing — by 5.6% in 2017-2018 alone, far faster than inflation or economic growth. Tax debt refers to undisputed amounts of income tax, GST and other taxes owed by Canadians – as well as penalties and interest – but does not include taxes due that Canadians have challenged and not paid.
Tax debt is separate from undeclared taxes owed in the underground economy, which Statistics Canada says amounts to $45.6 billion. It is also separate from the unknown amount of tax evaded through the use of offshore tax havens and other tax dodges — something which other CRA programs are pursuing.
