{"id":38159,"date":"2025-09-24T13:09:08","date_gmt":"2025-09-24T17:09:08","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=38159"},"modified":"2025-09-24T13:09:09","modified_gmt":"2025-09-24T17:09:09","slug":"what-you-missed-in-budget-2024-expanded-cra-audit-powers-and-penalties","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/corporate-tax\/what-you-missed-in-budget-2024-expanded-cra-audit-powers-and-penalties\/","title":{"rendered":"What you missed in Budget 2024: Expanded CRA audit powers and penalties"},"content":{"rendered":"\n

When Finance Minister Chrystia Freeland unveiled the 2024 budget to the House of Commons (the \u201c2024 Budget<\/strong>\u201d) on April 16, 2024, the spotlight was firmly on the government\u2019s intention to increase the inclusion rate on capital gains. Yet tucked away in the fine print were some of the most consequential tax enforcement changes in years \u2013 proposals to give the Canada Revenue Agency (the \u201cCRA<\/strong>\u201d) significantly expanded audit powers and new tools to penalize non-compliance.<\/p>\n\n\n\n

These measures, rooted in concerns first raised by the Auditor General in 2018 about delays in taxpayer disclosures, aim to close long-standing gaps in the CRA\u2019s ability to obtain timely information. For individuals and businesses, however, the implications are clear: more aggressive compliance obligations, higher penalties, and an audit process with a broader reach than ever before.<\/p>\n\n\n\n

Beyond capital gains: What the CRA can now do<\/h2>\n\n\n\n

The enhanced audit powers and penalties for non-compliance included in the 2024 Budget can be summarized as follows:<\/p>\n\n\n\n

Notice of non-compliance<\/h3>\n\n\n\n

A person who fails to comply with a requirement or a notice to provide assistance or information issued by the CRA could be issued a notice of non-compliance, which would become a new compliance tool. A person issued such a notice would also also be assessed a penalty of $50 for each day the notice remains outstanding, to a maximum of $25,000.<\/p>\n\n\n\n

A person issued a notice of non-compliance could request a review by the CRA and, if the notice is upheld, seek judicial review at the Federal Court.<\/p>\n\n\n\n

If a notice of non-compliance is issued and remains outstanding, the normal reassessment period for any taxation years to which the notice applies will be extended for as long as the notice remains outstanding.<\/p>\n\n\n\n

Questioning under oath<\/h3>\n\n\n\n

The CRA would now be entitled to oblige, through a requirement or notice, that requested oral and written information or documentation be provided under oath or affirmation.<\/p>\n\n\n\n

Compliance orders<\/h3>\n\n\n\n

While the CRA can already issue compliance orders, it would now be entitled to impose a penalty equal to 10% of the aggregate tax payable by a person for the applicable taxation years (where the tax owing exceeds $50,000).<\/p>\n\n\n\n

A compliance order could also now be issued by the CRA when a person has failed to comply with a requirement to provide foreign-based information or documents.<\/p>\n\n\n\n

Stopping the reassessment limitation clock<\/h3>\n\n\n\n

The application of stop-the-clock rules would be broadened to include situations where a person seeks judicial review of any requirement or notice issued by the CRA.<\/p>\n\n\n\n

CRA audit powers face scrutiny and political delays<\/h2>\n\n\n\n

These amendments were to come into force upon royal assent of the enacting legislation.<\/p>\n\n\n\n