Skip to content
Join our Newsletter

Victoria family cited in CRA crackdown on tax evasion

The Conservative government is not doing enough to crack down on tax evaders, say other parties on the heels of allegations by the Canada Revenue Agency that a wealthy Victoria family paid almost no tax over eight years related to an offshore tax “sh
KPMG’s building in Toronto.
KPMG’s building in Toronto.

The Conservative government is not doing enough to crack down on tax evaders, say other parties on the heels of allegations by the Canada Revenue Agency that a wealthy Victoria family paid almost no tax over eight years related to an offshore tax “sham” developed by a respected accounting firm.

On Thursday the CBC reported, based on court documents, that Victoria’s Peter Cooper and his two adult sons, Marshall and Richard, signed up in 2000 for a KPMG tax product in the Isle of Man that targeted “high net worth” Canadian residents.

Court documents show that the Cooper family paid little or no tax between 2002 and 2010, yet received almost $6 million from an offshore company. KPMG, which is both a tax and auditing firm, says any money the Coopers received were “gifts” and therefore non-taxable.

Reached at his home in Victoria, Marshall Cooper told the CBC he was unaware of Canadian tax laws when he emigrated from South Africa in the mid-1990s and used the best people for advice.

KPMG is representing the Coopers in their appeal in tax court. KPMG declined to speak to the broadcaster because the matter is before the courts.

Conservative MP John Duncan, who is running in Courtenay-Alberni, said in an email that his government “has zero tolerance for tax evasion.”

The government says the CRA audited more than 8,600 international tax cases between 2006 and March 31, 2014, identifying more than $5.6 billion in additional taxes that are being collected. “We have also increased the number of auditors,” Duncan wrote.

The government adds that in the fiscal year 2013-2014, the CRA resolved $46 billion in outstanding tax debt and that the CRA received more than 10,000 offshore voluntary disclosures.

But Murray Rankin, the NDP candidate for Victoria, said the Conservative government lacks political will and it appears it has not been aggressive in going after those who flout tax laws.

“The fact is that the expertise in the senior ranks of the CRA has been lost over the years,” Rankin said. “Endless cuts to the CRA budget have seriously eroded its capacity to go after complex international tax avoidance schemes like the one at issue.”

Rankin said aggressive international tax planning must be met with equally senior, experienced auditors. “If the NDP is elected, this will be a priority for us.”

Green Party Leader Elizabeth May said tax havens and tax credits used by extremely wealthy individuals and corporations are unethical, inequitable and detrimental to Canada’s economy.

May, the candidate for Saanich-Gulf Islands, said the Green Party would close all tax-haven loopholes. The CRA should be mandated to go after offshore accounts and use more forensic accounting, she said. May estimates about $3 billion in additional tax revenues could be recovered annually by closing tax loopholes.

“This latest scandal underlines how negligent Canada has been,” May said.

Saanich-Gulf Islands Liberal candidate Tim Kane said Thursday that tax cheats should be identified and dealt with accordingly.

“KPMG is a very reputable firm; therefore, their [alleged] involvement in such a scheme surprises me,” Kane said. “While Liberals have promised to bring greater fairness to the tax system, we know that this fairness goes both ways.”

In 2013, the CRA obtained a judicial order demanding KPMG hand over the names of all the wealthy clients who set up shell companies in the Isle of Man but KPMG Canada is fighting that decision in federal court, the CBC reported.

The CRA alleges in court documents that the KPMG tax structure was a “sham” and hit the Cooper family with an order to repay millions in unpaid taxes and penalties.

Both May and Rankin said this story is about just one family and one firm, which begs the question: How much more money is sitting in offshore accounts that could be contributing to Canada’s infrastructure, schools and hospitals?

“The CRA is alleging there must be other Canadians that have bought into the same sham transaction,” Rankin said. “Is the CRA pushing hard enough in court to get these names; this has been going on for eight years” he added. “I don’t think the government is pushing hard enough and it’s a huge economic loss ... Canadians are fed up with this.”

ceharnett@timescolonist.com