DROVER: The latest dirty trick from Canada's revenue agency

Devin Drover is the General Counsel and Atlantic Director of the Canadian Taxpayers FederationThe Canada Revenue Agency is pushing ahead with a capital gains tax hike that hasn’t been approved by elected representatives in Parliament. This is a direct attack on democracy.Last year, the Trudeau government proposed increasing the capital gains tax for the first time in years. The government did this through a procedural step called a ways and means motion.But here’s the catch: a ways and means motion is not a law. It’s simply a tool that allows the government to propose tax changes. It doesn’t give the government the legal authority to enforce those changes.In Canada, tax hikes require full parliamentary approval. This means the government must introduce legislation and debate and pass it through a vote by our elected representatives. That’s how our parliamentary democracy is supposed to work.But the Liberals never introduced the necessary legislation to make this tax hike official. Instead, Prime Minister Justin Trudeau prorogued Parliament to clear the way for a Liberal leadership race. By doing so, he left this proposed tax hike unauthorized.Despite this, the CRA is acting like the tax hike is a done deal. It’s pressing forward with enforcement plans, completely ignoring the fact Parliament hasn’t approved it.This is an outrageous overreach by unelected bureaucrats and it sets a dangerous precedent — especially when the law is dead on arrival.Parliament doesn’t resume until March 24, 2025. The opposition Conservatives, NDP and Bloc Québécois are all gearing up to topple the Liberal government. And polls suggest the Conservatives, who oppose this tax hike, are likely to form the next government.Yet the CRA is ignoring these political realities and plowing ahead. This isn’t just reckless, it’s unconstitutional. Canada’s Constitution is clear: No taxation without representation.Section 53 of the Constitution Act, 1867, enshrines this principle, stating all taxation must originate with the elected representatives in the House of Commons. This ensures taxes can only be imposed with the approval of those we elect to represent us.The Supreme Court of Canada reaffirmed this principle in the 1998 case Eurig Estate (Re):“The provision codifies the principle of no taxation without representation, by requiring any bill that imposes a tax to originate with the legislature,” wrote Justice Major. “[…] it prohibits not only the Senate, but also any other body other than the directly elected legislature, from imposing a tax on its own accord.”This isn’t just about one tax hike. If the CRA can enforce a tax based on a proposal that hasn’t passed Parliament, what’s stopping it from doing so again in the future? Taxation in Canada is supposed to be clear, transparent and grounded in law — not speculation or bureaucratic overreach.The stakes are huge. This capital gains tax hike would be an economic disaster, according to a new report from the C.D. Howe Institute. It’s expected to shrink Canada’s capital stock by $127 billion, destroy more than 414,000 jobs and reduce GDP by nearly $90 billion. Real per-capita GDP would drop by three per cent, with most of the damage happening in just five years.The CRA’s actions undermine the rule of law, erode trust in our democratic system and threaten Canada’s economic prosperity. Canadians shouldn’t be subjected to this kind of bureaucratic arrogance.If the federal government and the CRA refuse to back off, the Canadian Taxpayers Federation will have no choice but to take legal action. We will defend the rights of taxpayers and uphold the rule of law.Canadians deserve better than bureaucratic power grabs and economic mismanagement. Bureaucrats need to be reminded they work for taxpayers, not the other way around.“No taxation without representation” isn’t just a slogan. It’s a founding principle of our democracy and a constitutional right. Canadians must stand up to protect it.Devin Drover is the General Counsel and Atlantic Director of the Canadian Taxpayers Federation.

DROVER: The latest dirty trick from Canada's revenue agency

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