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The Canada Revenue Agency is using the court system to attempt to collect $100 million it says Islanders and Island businesses owe to the federal government for unpaid taxes.
It’s unsurprising to Mark Marshall, a licensed insolvency trustee with Allan Marshall and Associates.
He deals daily with people owing or trying to pay off taxes that have been sent to collections. The move is often a last resort after contacting the debtor is unsuccessful, issues have been discovered or a payment arrangement hasn’t been made. It’s a situation that causes a lot of stress, he said.
“A lot of times, people will deal with their stress by … ultimately not addressing it,” he said.
WATCH | More than 16,000 Islanders owe unpaid taxes:
Islanders owe the CRA over $100 million in unpaid taxes
It’s almost time to file your taxes and CBC recently asked the Canada Revenue Agency how Islanders are doing when it comes to paying on time. Turns out, not good. The CRA says many people in this province haven’t filed in years. CBC’s Laura Meader has more.
Through legal action filed in the courts, the CRA is attempting to collect $100 million from 16,366 people on P.E.I.
Nationally, about 3.3 million people owe $24.8 billion. And those are just the amounts that have gone to court —total tax debt owing for Canadians is $136 billion.
Documents filed in P.E.I. Supreme Court show a wide range of amounts owing, some in the tens of thousands and others more than one million.
Many who owe are self-employed
Marshall explained there are mechanisms in place to compromise CRA debt, allowing Canadians to make a payment plan.
He said roughly half of the people he meets with have CRA issues, “some large, some small.”
Many of those who owe have started their own businesses, but don’t always hire a bookkeeper or an accountant until it’s too late, Marshall said.
“You always have to stay on top of that stuff, right out of the gate.”
Marshall’s advice is to speak to a trustee before the debt goes to the courts.
“My suggestion to anybody is regardless if you owe any money, get things filed, get them on record.”
‘People not paying their fare share’
P.E.I. Senator Percy Downe says though unpaid taxes aren’t unique to the Island, they’re still a big problem.
It means government can’t lower taxes or invest in what would improve Canadians’ quality of life, said Downe.
He said there are unpaid taxes across the country with a lot of overseas tax evasion, which he said the CRA does “a horrendous job” tracking down.
“Those that hide their money overseas to avoid paying taxes in Canada means that the rest of us have to pay more to make up the shortfall.”
P.E.I. Senator Percy Downe says though unpaid taxes aren’t unique to the Island, they’re still a big problem. (Laura Meader/CBC)
He pointed to Project Jade, launched by the CRA more than a decade ago, which found 106 Canadians had accounts tied to a bank in Liechtenstein that resulted in $20 million expected in back tax and penalties, as well as an investigation that found 1,785 secret accounts in Switzerland.
“When we have people not paying their fair share of taxes, we don’t have services that we’re counting on,” he said.
In an email to CBC News, a spokesperson for CRA said all reasonable efforts are made to recover debts, but when debts remain unpaid, it works with Canadians to establish payment arrangements.
“If it is determined that a taxpayer has the ability to pay their debt in full and it remains unpaid without an acceptable payment arrangement, the CRA may take legal action to recover the debt,” the spokesperson wrote.
