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Alberta lax on chasing down back taxes from corporate deadbeats: auditor – CP

by ahnationtalk on October 7, 2015632 Views

Source: The Canadian Press
Oct 6, 2015

By Dean Bennett


EDMONTON _ The auditor general says Alberta’s tax collectors are falling down on the job when it comes to going after corporate deadbeats.

Merwan Saher says in a report issued Tuesday that some corporations have unpaid tax bills going back eight years.

And he says the province is not using the tools at its disposal to make them pay up.

“There is a significant backlog (of unpaid tax files),” Saher told reporters on a conference call.

“There’s a series of administrative process problems that we think can be improved.”

Saher said he was unable to provide numbers or estimates to reflect the scope or size of the problem.

Finance Department spokesman Gerald Kastendieck agreed that it’s difficult to quantify, given that some files in arrears may qualify for a refund, have no income to pay taxes on or are no longer incorporated.

But he noted that about 1,000 unfiled returns were more than eight years old in a department that processed 250,000 files last year.

He said the department is already taking steps to improve procedures.

“We will continue to work with the (auditor general) to ensure government is pursuing unfiled tax returns as effectively and efficiently as possible,” Kastendieck said in an email.

Finance Department officials are responsible for making sure corporations file their tax returns within six months of their tax year-end.

The province can issue a formal demand to non-filers for the corporation to pay up and issue its own estimate of what is owed, known as a default assessment.

But Saher said the department doesn’t have a strong system in place to make sure corporations are paying up and isn’t using the default assessments.

Corporate taxes have become a hot-button issue in Alberta as Premier Rachel Notley’s government grapples with multibillion-dollar deficits in the face of low oil prices.

The province increased the corporate tax rate to 12 per cent from 10 per cent last spring. Corporate taxes account for just over 10 per cent of government revenue. This year, corporate taxes are forecast to bring in $4.8 billion.

Alberta Party Leader Greg Clark said there’s little point to hiking taxes if the government doesn’t have an adequate system in place to collect.

“I am extremely disappointed that the ND government did not even attempt to fix this problem before raising the corporate tax rates,” said Clark in a release.

Saher also said in his report that the province needs to do better to make sure those getting insured health services in Alberta actually live here.

He said the province checks for residency when it issues Alberta Health cards, which entitle the holder to insured services. But followup checks rely on self-reporting or on so-called migration reports from other jurisdictions that send alerts when someone has moved away from Alberta.

Saher said those migration reports are hit and miss and no reports are sent on Albertans who live for extended periods outside Canada.

He said other Canadian provinces and jurisdictions, except for Alberta and Manitoba, address the problem by issuing cards with expiry dates.

Health Minister Sarah Hoffman said she will have discussions about making changes such as expiry dates on cards, but always within the constraints of a tight budget.

“I don’t want to lock in my department (to changes) if there are extraordinary monetary implications that we can’t meet,” she said.


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