CRA

New data reveals Canada Revenue Agency has gone after very few companies for abusing a COVID wage subsidy program that acted as “massive wealth transfer”

“As with any compliance audit program, the less intricate audits are generally among the first to be concluded and more complex cases take longer.” “The government could do a rigorous analysis of how many jobs were saved.” “There was no requirement that the subsidy be used to subsidize wages.” “If CEWS funds are not saving many jobs, that means they end up instead in business revenues, and maybe even profits.” There was nothing criminal about taking the money and laying off workers and paying your executives.” “Audits are on-going and cases pertaining to anti-avoidance penalties and promoter penalties can be challenging and time-consuming,” the spokesperson said. But the so-called “executive compensation repayment rule” was convoluted and applied to only a fraction of the recipients over a narrow period of time, Macdonald said. “That’s outside the scrutiny of the public, but not the government,” he said. “There was a big gap between the ‘letter of the law’ and the ‘spirit of the law,” Macdonald said. “The CRA can go after a business that was intentionally fraudulent and made up employees in order to get the subsidy. Although Finance Minister Chrystia Freeland told the House of Commons finance committee in March 2021 that “legally, the wage subsidy can only be used to pay employees” and that “it can’t be used for any other purposes,” no such restriction actually existed. “The absurdly low number of companies penalized for misuse is either evidence of how poorly designed the program was, or evidence that the government has chosen to just laugh off the misuse,” said D.T. Cochrane, an economist with Canadians for Tax Fairness.