Revenue Canada Works On Its PR

FTLComm - Tisdale - June 23, 1999
  Check out the picture and you will see no signs of vampire fangs or pocket pen protectors. My poor hearing prevented me from hearing who these guys were when the came to the door, I was on the phone doing a quote and ushered them down to my office. When I got off the phone they explained they were from Revenue Canada and I didn't have time for all those "OH! Ohs!"
Community Visit Initiative

Though the two man team did have a specific agenda there is no question that Revenue Canada is primarily involved in a positive "showing the flag" exercise. The handout they left states that the five objectives of the viist are to:

  • Enhance visibility in the community
  • Improve efforts to educate members of the public about their obligations
  • Get support from groups harmed by the underground economy
  • Demonstrate that action is being taken against the underground economy
  • Encourage voluntary compliance

The project has included visits to other communities and Melfort and Tisdale were the targets of this week's visits.

Underground Economy
  Primarily Revenue Canada is concerned about small businesses that do not file income tax and are not registered with GST. The objective of course, is to see the whole of Canada's economy working within the tax structure which in the long run is fair to all. Independent entrepeneurs who do not work within the tax structure present a problem of unfair competition to the rest of us and Revenue Canada wants everyone to voluntarily register with GST and file their tax forms.

Apparently the home renovation sector has been singled out as one of the more likely trades to evade the tax process and various measures are being taken to involve these people in filing and charging GST.
Effects of The Underground Economy
  It is remarkably easy to evade the long arm of the tax man and yet in Faster Than Light Communication's experience here in Tisdale we have seen little evidence of businesses or individuals operating outside of the federal and provincial tax structure. One of the main reasons is that it is in a business's best interest to be part of the system. GST must be paid on products and services but it is also deductible and for that reason alone a business could not afford not to fill in their monthly forms and in order to fill in those forms records have to be kept and that paper trail keeps everyone operating in the "fair and square" world.

The gray area for businesses like our own is in the bartering process. Something for something is often difficult to assess in value and is one of the areas that tax reporting may go un-noticed or even unrealised as an error. However, if businesses use their invoices to keep track of their transactions they can keep thing open and above board.
Canada Customs and Revenue Agency
  April 29, 1999 marked the passing of rhe Canada Customs and Revenue Agency Act and it is scheduled to be come an operational reality on November 1, 1999. The plan by the government is to streamline these two operations and of course reduce duplication.

When filling out the survey form with the two representatives one of the questions was a Canada Customs Export number and I pointed out that Faster Than Light Communications attempted to engage in trade outside of Canada but found that the Government red tape made it completely impractical for a small business like our own. Since we are a computer company our products are considered strategic and even selling inkjet refill cartridges to a customer in Amsterdam required an export license filled out as an original (no faxes) in Ottawa and required three two four weeks to carry out the transaction. Similarly sales to the US of memory and computer components ran into amazing difficulties as that mother of all jokes "Free Trade" has slowed movement of goods to the US to a crawl so that our sales to California took two weeks to get through customs.

It would be nice to think that the combination of Revenue Canada and Custom's Canada would see improvements in the ability for us and others to engage in international sales but I have serious doubts about this because the two things that hampered us were basic government policy. As a result of our experience we have made no efforts in the last two years to make sales outside of Canada even though our dollar and products make such sales more then competitive.
Fairness Plan

In February the Department of Revenue set out a seven point plan to establish fair practices with the people of Canada. You might want to take a look at this programme goto:

It makes one have some serious doubts when you consider the necessity to come up with such a programme. Did that mean that for all my life this department has been acting in an unfair manner? Is fairness such a problem that they actually have to have a policy about it? I would have thought that the concept of fairness should be at the very heart of a taxation system.

In the rhetoric of the fairness policy the tax-payer is referred to as the "client". Let that issue sink in a minute and you will realise the reason for the need to issue a fairness policy. Taxation as it was begun, is carried out by our representatives, our democratically elected members of parliament approve the laws which govern taxation as we, through our members of parliament, give consent to be taxed. That consent does not make us clients. In fact it is quite the reverse, revenue Canada exists at our pleasure and is instead in our service, acting on behalf of us and he who is served by servants is not a client. With a "client" service mentality it is clear that they Department of Revenue has made itself an entity and by so doing turned its master into a client.

GIFI - General Index of Financial Information
  This is an interesting concept with shades of language from the Vietnam conflict. In order to make things simpler and permit Statistics Canada to have a more straightforward means of identifying things, financial information can be reported using what is essentially a reporting code for financial statements. With the exception of insurance on non-resident corporations everyone is encouraged to use this reporting method. (I would be interested to know if banks with their remarkable lack of flexibilty and awareness would adopt this approach within the next century)

Cash becomes 1001, while retained earnings is 3600 and a bank loan is 3143. Revenue Canada has a frequently asked question section onits website about the GIFI.
  The Federal Government has established a policy to force businesses doing contracts to report their activity. If you would like to find more out about this go to their web site and check this programme out.
Web Sites
  Revenue Canada's Interenet Address -
  Specific Program Web Site -
  Specific Document -