Times are changing as the Canada Revenue Agency (CRA) specially requested taxpayers for their consent to share personal details, such as their address, with Election Canada by putting a ‘check mark’ in the box located on their income tax return. With Bill C-51, also known as the Anti-Terrorism Act, the CRA will be able to share income tax filings, which includes the financial details provided, with 16 governmental agencies.
This bill has been in the limelight for quite some time facing significant protests from Canadian citizens. Many consider it to be against the Universal Declaration of Human Rights. However, the government seems to consider this sharing of information as important to ensure national security. Here is a brief overview of the tax filing implications of Bill C-51 prepared by AG Tax analysts.
What is Bill C-51
Bill C-51 is part of the ‘Anti-Terrorism Act’ introduced by the Parliament of Canada. Out of the many measures outlined in this bill to protect Canada, one is the sharing of information by the CRA. Once the bill becomes law, the CRA will be able to provide the financial information and tax filing details of taxpayers, without any required permission or consent from the taxpayer, to sixteen government bodies including the Canadian Security Intelligence Service (CSIS); Royal Canadian Mounted Police (RCMP) and Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) all of which already had access to this information upon request.
Previously, the CRA provided taxpayer-related information only in specific situations and only when absolutely necessary. However, under this bill the CRA would need to share information if there are reasonable grounds to suspect that a taxpayer is a threat to Canada’s security and information available through the CRA could help benefit the investigation.
The thirteen government bodies newly added to the list are:
- Canada Border Services Agency
- Canadian Armed Forces
- Canadian Nuclear Safety Commission
- Communications Security Establishment
- Canadian Food Inspection Agency
- Department of Citizenship and Immigration
- Department of Finance
- Department of Foreign Affairs, Trade and Development
- Department of Health
- Department of National Defence
- Department of Public Safety and Emergency Preparedness
- Department of Transport
- Public Health Agency of Canada
Although departments would not routinely check information about a taxpayer’s income, donations or other monetary transactions, the vague wording of the new bill is problematic. Just about anything in your tax return could be categorized as nefarious. If, for example, a taxpayer donated to a religious charity that the government deems suspicious, the taxpayer could be investigated without their knowledge. Experts say this could render an individual’s personal financial information less secure than it already is in today’s electronic age. The CRA has faced various security breach issues in the last three years and making information more widely available will likely result in more of these breaches.
A technology lawyer with the Canadian Internet Policy and Public Interest Clinic, Tamir Israel believes that passing of the bill would not only lead to the information being shared with multiple organizations/individuals but also increase the frequency of the information being shared, which spikes the risk of the financial information being leaked. One of the reasons being that in order to have the information readily available, the CRA would most likely group relevant information into a central pool for the 16 organizations access, which would eliminate the gatekeeping abilities of CRA, and a pool of significant information in one place would be an ideal target of hackers
However, Cathy Hawara, director-general of the CRA’s charities directorate has a different opinion, as per Cathy, the information sharing would occur only on a case-by-case basis. “It’s not going to be possible to come in and ask for a whole list of detailed information about taxpayers where it’s not clear to us at all how this is related to the requesting organization’s national security mandate,” she said.
That being said, as CRA’s main responsibility is to protect taxpayer information, one can assume that the government and CRA are aware of the security concerns, and prepared to take the necessary measures to secure the taxpayers data, and prevent harm to law-abiding citizens.
AG Tax LLP Can Help
If you wish to discuss further on the above issue, or have any tax-related queries or need assistance with tax planning or filing please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian tax laws and can provide you the right guidance to handle your tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canadian, and other international tax laws. We can assist with:
- Canadian Personal and Corporate tax returns
- Cross Border Taxation and Business Planning
- U.S. Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- Estate Planning, Inheritance tax advice
Please contact any of our offices across Canada at 604-538-8735 (Greater Vancouver), 780-702-2732 (Edmonton and Alberta), or 416-238-5920 (Toronto) to arrange for an appointment to discuss your tax related queries.
Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.