‘Frankenstein’ Tax Informant Scheme Will Bypass The Law

Canada Revenue Agency faces questions over a “security state” scheme to bypass federal law in compiling a database of suspected fraud within the tax department. An MP and the union for senior staff questioned the ethics and legality of the program.

“This is startling; it’s Frankenstein-esque,” said Peter Bleyer, special advisor to the president of the Professional Institute of the Public Service of Canada; “Once you go down this crazy path you don’t know what you’re going to wind up with.”

The Revenue Agency is contracting private consultants to build an “internal fraud” surveillance system to track anonymous tips from its 40,000 employees on suspected wrongdoing by co-workers. In a contract notice, the agency said existing methods to investigate “fraudulent activity and inappropriate conduct by employees” are too restricted by the Access To Information Act and Privacy Act.

“Any information gathered during the course of an investigation into wrongdoing becomes accessible under these Acts; therefore, employees may be reluctant to come forward,” the agency noted; “An anonymous reporting channel, more commonly known as a tip line or hotline, provides employees with an anonymous means to report concerns such as allegations of fraudulent activity or misuse engaged in by fellow employees or management.”

Blacklock’s review of thousands of in-house Summary Discipline Reports on tax officials over a six-year period found only 3 suspected cases of criminal activity: an employee who improperly accessed 162 tax returns; another who falsified a $14,000 reassessment payment; and a third worker who altered family members’ tax returns and directed refund cheques to a personal bank account.

Bleyer said the new informants’ surveillance system appeared to be a disproportionate response: “Canada Revenue Agency is creating a problem where there is none,” he said.

“This turns the public service into a security state,” Bleyer continued. “It creates an atmosphere of secrecy and fear, and I’d point out the context in which this agency is operating. The government is so obviously interested in secrecy: that is the message coming from that centre.”

Revenue Minister Kerry-Lynne Findlay did not comment.

Evidence Will Be ‘Permanently Deleted’

The tax department in its notice to contractors stressed the informants’ database must not be shared with any third-parties – a blanket exemption that would include parliamentarians – and allow management to destroy records at will: “All information collected on behalf of the Canada Revenue Agency belongs to the CRA,” the agency wrote; contractors are to “maintain all allegations within the database until Canada Revenue Agency authorized reviewers or a CRA project authority request to have them permanently deleted from the database.”

MP Murray Rankin, New Democrat revenue critic, described the scheme as unsettling. “It is disturbing,” said Rankin, MP for Victoria. “The Access To Information Act has been held by the Supreme Court to be a ‘quasi-constitutional’ right. To see Canada Revenue doing an end run around that Act is very disturbing.”

The Access Act was introduced in 1983. Supreme Court Chief Justice Beverley McLachlin in a 2009 speech described the legislation as having “quasi-constitutional status”, calling it a “check on abuse of powers”: “The need for information is compounded by the inevitable tendency of governments and those exercising powers on behalf of the government to disclose only as much as they deem necessary,” Justice McLachlin said.

Canada Revenue would not explain the need for the surveillance system, and did not comment on what assurances it could offer that incriminating material embarrassing to government officials would not be destroyed. “That cuts both ways,” said the Professional Institute’s Bleyer. “They want to protect this information from who? Does it protect the informants or does it protect the government?”

“We need to talk to Canada Revenue Agency,” Bleyer added. “What is the intention of this? Is it really as crazy as it sounds? We’re going to take a close look at this.”

By Tom Korski

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