Ottawa lost average of $22 billion a year in unpaid tax from 2014-2018: CRA report

OTTAWA — A new report from the Canada Revenue Agency concludes the federal government is losing an average of up to $22 billion a year in unpaid taxes.

The agency analyzed tax collection from 2014 to 2018 for its first report on Canada’s “overall tax gap” released today.

The CRA estimates the net tax gap for those five years, or the amount of the money owed to the government that it did not actually collect, totalled as much as $111.2 billion.

Although the net amount of uncollected tax trended upwards over that time, with estimates ranging up to $23.4 billion in 2018 and $23.5 billion in 2017, the ratio stayed steady each year at nine per cent of federal tax revenue overall.

Unpaid personal income tax amounted to between $8.4 and $10.6 billion a year, the report says, with unpaid corporate tax estimated at $4.6 to $7.3 billion a year.

The CRA says compliance and collections efforts over the five years covered by the report recouped an additional $72.4 billion that would otherwise not have been paid.

The agency says intentional tax evasion or over-claiming tax credits accounts for some of the tax gap, but unintentional mistakes, ignorance and bankruptcy are also at play.

This report by The Canadian Press was first published June 28, 2022.

The Canadian Press