An immigrant of Chinese ethnic background who came to Canada in 1993 and went to work as a financial advisor to immigrants has asked the federal government to take immediate steps to stop widespread tax evasion by immigrants. He says that Canadians worry about Health Care, their aging population, the national debt, and the future costs of education and pensions. But they do not draw the necessary connection between these matters and the benefits that could be realized by stopping tax evasion by immigrants.
He acknowledges that other people are guilty of tax evasion, but that immigrant tax evasion is significant. This evasion is affecting current government finances, and will be an important factor in government's ability to support important national programmes such as Canada's Health Care system.
According to him, the problem is being caused by “our government's generosity in accepting immigrants without monitoring their obligations”. This has resulted in serious abuses of our tax system by “the majority of newcomers”.
He says that immigrants come here to enjoy Canada's quality of life, but do not declare their earnings. Some come here to give birth and citizenship to their children. Some come for high-quality education and to save money on it that they might otherwise have to pay as non-residents. However, Canada does not require immigrant graduates to pay back the costs of education if they leave Canada. Also, Canada does not object to their return when trouble arises in their overseas locations—as occurred in Lebanon this past summer.
He claims that Canada's housing boom has provided many opportunities for money laundering, bribery and cash for fugitives fleeing from crimes in their home countries.
The financial advisor estimates conservatively that in the past year alone, the tax evaders have cost Canada $500 Million. (This is a significant part of the reported annual spending of Citizenship and Immigration.) Over the past 16 years, the tax evasion figures have amounted to billions of dollars.
He states that it is common to see quasi-single parents with children at schools and universities. These people live in good homes and own premium vehicles. However, they report low self-employed incomes or mere interest incomes to Revenue Canada and are, in effect, “indulged in this behaviour by Revenue Canada, CCRA and CRA. They hire good tutors for their children, enjoy free provincial health care insurance and services, and are given CTB and GST rebates. This is a Win-Win situation for them and a Lose-Lose situation for Canada.
This widespread abuse is unfair to “mainstream honest Canadians of dual income families” who have limited resources to better their children's education and who earn just enough to survive. Their children have to compete against children of recent immigrants and increasing numbers of overseas students for scarce post-secondary spaces.
He advises Canada to monitor its immigrant choices much more carefully and avoid “wait and see” and “grab and go” immigrants.
From his work, he has seen that immigration consultants, including lawyers, accountants, and ex-government officials, are making fortunes by providing to immigrants methods of reporting assets so that the immigrants qualify as immigrants, but are automatically eligible for social benefits.
He says that a number of weaknesses are being exploited and have to be dealt with:
(a) The Canadian Revenue Agency has too great a workload. Ways have to be found to do more investigations.
(b) Too many loopholes exist in tax laws.
(c) Dual nationality policy is incomprehensible on income tax.
(d) Lack of communication exists between Canada's Department of Citizenship and Immigration and the Canadian Revenue Agency.
(e) The Canadian Border Services Agency is ineffective in apprehending Maple Leaf Card holder violators.
(f) Immigrants resort to privacy and human rights claims in order to escape probes and audits.
(g) Fraudulent family re-union applications are too easily approved.
According to the financial advisor, with proper monitoring, Canada could be in a much better financial situation. Former Finance Minister Paul Martin initiated an inquiry into Canada's “Foreign Asset and Overseas Income Reporting Rules”. However, it was incomplete and was “manipulated by people with political purposes to gain votes”.
Canada's federal government needs to enact legislation with long-term policing strategies for all types of tax crime. These would benefit all levels of government.
He says that by tackling tax crime, Canada can improve its financial future; finance the protection of its environment; safeguard its healthcare and pension programmes; maintain high education standards and minimize brain drain; eliminate national debt more quickly; and buy back iconic Canadian businesses such as The Bay, Fairmont Hotels, Intrawest, and others.
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