Canada Revenue Agency gets more teeth to catch potential tax cheats

The federal government is cracking down on potential tax cheats by introducing new measures to track cryptocurrency transactions and giving the Canada Revenue Agency more teeth to penalize taxpayers who refuse to disclose information it wants.

The budget tabled Tuesday also includes provisions to hold tax planners who help clients engage in tax evasion and aggressive tax avoidance as well as shed more light on donations to certain foreign charities registered in Canada and how that money was used.

In recent years, the CRA has come under fire for its track record in catching and prosecuting tax cheats. While the agency has successfully prosecuted small cases, critics say it hasn't done enough to catch larger cases of tax evasion and aggressive tax avoidance.

At the same time, governments around the world have been taking steps to share information with other jurisdictions in a bid to catch those who move money between countries or who use newer technologies to avoid taxes.

In her budget Tuesday, Finance Minister Chrystia Freeland moved to implement new international rules requiring more transparency in cryptocurrency transactions.

«Just as crypto-assets pose financial risks to middle-class Canadians, the rapid growth of crypto-asset markets poses significant risks of tax evasion,» said the budget.

«Regulation and the international exchange of tax information must keep pace with tax evasion threats in order to ensure a fair tax system.»

Starting in 2026, Canada will implement the Crypto-Asset Reporting Framework — developed by the Organisation for Economic Co-operation and Development — to require crypto-asset service providers located in Canada or which do business in Canada to begin annual reporting to the CRA.

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