Federal judge rules out independent probe into CRA allegations

A federal judge has turned down a request for an independent investigation into allegations of misconduct at the Canada Revenue Agency (CR), where whistleblowers claimed a senior official helped push through a secretive tax deal for a wealthy corporate lobbyist.

Federal Court Justice William Pentney said the Public Sector Integrity Commissioner had no legal duty to launch a full investigation, according to Blacklock’s Reporter.

While the concerns were serious, the judge found the CRA had already looked into workplace issues internally and said Parliament gave the Commissioner discretion over when to pursue a formal probe.

The case centred on Ted Gallivan, a longtime CRA executive who moved in 2021 to a $238,000-a-year role at the Canada Border Services Agency. Gallivan was accused by five CRA managers of favouritism in handling tax deals with corporations that held offshore accounts. The claims, which date back to 2020, have not been proven in court.

One manager alleged there was a pattern of “manipulating tax outcomes” that bypassed usual safeguards meant to protect fairness and integrity in the system. Managers said they were pressured to approve documents they disagreed with, while one employee was told “Ted wants this done” after refusing to approve a deal made by another of Gallivan’s divisions.

Another staff complaint accused Gallivan of working behind the scenes to secure “sweetheart tax treatment” and questioned the motivation: “Prestige? A feeling of power? Influence? Future favours? 10M in a Swiss account? It doesn’t matter. It’s wrong.”

Gallivan did not respond to interview requests. Then-Revenue Minister Diane Lebouthillier said she had no knowledge of the tax settlements. Her office noted at the time that the Minister respects the CRA’s independence and does not interfere with taxpayer files.