CRA scrambled to announce 11th-hour 'bare trust' reporting pause, internal emails suggest

A last-minute decision to pause «bare trust» reporting requirements left officials at Canada's tax agency scrambling to inform the public about the changes, internal emails suggest.

The Canada Revenue Agency (CRA) announced in March — with just days to go before the filing deadline — that Canadians with bare trusts would not be required to file a T3 tax return form under new reporting rules for trusts that took effect this past tax season.

A bare trust relationship is one where a person, known as a trustee, has legal ownership of a property or asset but doesn't hold beneficial ownership. In such a relationship, a «trustee can take no action without instructions from that beneficiary and the trustee's only function is to hold legal title to the property,» according to the government's definition.

While some bare trust relationships can be complex, others can be rather simple — such as a shared bank account or a parent being named on the title of a child's house in order to help them qualify for a mortgage.

Internal emails, obtained through an access to information request, show a flurry of back-and-forth discussions among CRA officials in the days leading up to the announcement. Much of the discussion was centred on the wording of the announcement itself.

The announcement was posted on the CRA's website the afternoon of March 28. But the documents attached in the emails suggest public servants began working on the wording of the announcement on March 25, just over a week before the filing deadline.

CBC News asked the CRA when the decision to pause the filing requirements was made internally. The agency didn't pinpoint when that decision was made.

Documents suggest the government still planned to go through with the filing