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Group launches petition calling on Prime Minister Trudeau and Revenue Minister Lebouthillier to call public inquiry into CRA’s relationship with big accounting firms – more than 15,000 have signed already

Proposed House Finance Committee hearings a “kangaroo court” – partisan politicians can’t investigate past governments impartially

Ethics rules, enforcement and penalties for former government employees also need to be strengthened to ensure they don’t sell their inside access and knowledge

FOR IMMEDIATE RELEASE:
Thursday, April 14, 2016

OTTAWA – Today, Democracy Watch launched a petition on Change.org calling on Prime Minister Trudeau and Revenue Minister Diane Lebouthillier to call a public inquiry into the Canada Revenue Agency’s relationship with big accounting firms. The petition already has more than 15,000 signatures.

The House of Commons Finance Committee is considering holding hearings on the relationship but a partisan committee dominated by Liberals can’t impartially investigate what happened during a previous Conservative government.

“An independent, impartial public inquiry is needed to find out the whole truth about whether the CRA’s relationship with big accounting firms has allowed their wealthy clients to get away with cheating on their taxes,” said Duff Conacher, Co-founder of Democracy Watch, and Visiting Professor and LL.M. candidate at the University of Ottawa. “The House Finance Committee holding hearings on the situation is not enough to find out the whole truth because committees are kangaroo courts made up of partisan politicians judging other politicians and past governments.”

As the CBC has reported over the past six months, dozens of people have left the CRA or the Department of Justice and gone to work for the big accounting companies. Top CRA officials regularly attend behind-closed-door events with top accounting company officials. As well, Cabinet ministers have also played questionable roles at events, and the Canadian government even works in partnership with the accounting industry association.

Also as the CBC has reported, the CRA also failed to aggressively pursue a case against a tax-evasion scheme involving KPMG and some of it wealthy clients, and the CRA offered a secret amnesty to some of those clients.

Democracy Watch also called on the federal government to change federal laws as soon as possible:

  • to increase the cooling-off period for former federal government employees from one year to up to five years based on their last one year up to five years in their job (on a sliding scale depending on whether they are a junior or senior employee);
  • to require all employees to notify the Public Sector Integrity Commissioner when they leave government so the Commissioner can ensure they don’t take jobs or share information with individuals or entities they watched over when they were in government, and;
  • to establish strong penalties for former government employees who violate key ethics rules (there are no penalties now), and to give the Integrity Commissioner the power to impose the penalties.

“The ethics rules and enforcement for CRA and all former federal government employees are too weak to ensure they don’t secretly sell their inside access and knowledge to companies or others they watched over, and the lack of penalties for violating post-employment rules makes the system a sad joke,” said Conacher. “The cooling-off period for former employees must be increased, and they should be required to tell the Integrity Commissioner what they are doing during their cooling-off period, with the Commissioner empowered to impose strong penalties on anyone who violates the rules.”

The Values and Ethics Code for the Public Sector (which covers the CRA and all government institutions) requires public servants to avoid even the appearance of a conflict of interest, and the Policy on Conflict of Interest and Post-Employment requires government institutions to prevent situations “that could impair either the integrity of the public service or the public’s perception of its integrity.”

However, the Policy (Appendix B) only specifically prohibits senior government employees, for only one year after they leave their job, from working with anyone or any entity that they had significant official dealings with only during the last year of their job, and to disclose what jobs they take during that one year only to their deputy head (who can exempt them from the cooling-off period).

The CRA’s own Code of Integrity and Professional Conduct also requires avoiding even the appearance of a conflict of interest, and says CRA’s employees and former employees can never “communicate any information or share any proprietary knowledge that you obtained while on the job, and that has not been made public by the CRA.”

However, the CRA’s Directive on conflict of interest, gifts and hospitality, and post-employment says all employees only have a one-year cooling-off period after they leave their job that prohibits them from working with anyone or any entity that they had significant official dealings with during the last year of their job (and it can be reduced or waived by their manager), and they are not required to notify anyone about their work after they leave, and there are no penalties for violating any post-employm`ent rule.

Even worse, the most senior government officials at the CRA and all government institutions – people who are appointed by Cabinet like deputy ministers and commissioners and heads of institutions – are only required to comply with the much weaker rules in the Conflict of Interest Act. The Act allows Cabinet ministers, their staff, and Cabinet appointees like deputy ministers, to make decisions they can profit from, and while the Act requires a one- to two-year cooling-off period after they leave their position, they don’t have to notify the Conflict of Interest and Ethics Commissioner about who they are working for during that period. There are also no penalties for violating any of the ethics or post-employment rules in the Act.

“The ethics rules from the top to the bottom of the federal government, and enforcement of the rules and penalties for violations, are all dangerously weak – they need to be strengthened, and until they are unethical relationships between politicians and government officials and lobbyists will continue to undermine our democracy,” said Conacher.

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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
info@democracywatch.ca

Democracy Watch’s Government Ethics Campaign