Quebec authorities are stepping up investigations to oust La Belle residents, using fake Ontario addresses to save thousands of dollars in taxes each year.
Radio-Canada has learned that the Quebec tax collection agency, Revenu Québec, has conducted hundreds of audits over the past few years to find Ontario taxpayers who are actually based in Quebec.
The Sûreté du Québec (SQ) also got involved during the pandemic, conducting dozens of investigations and transferring files to the Quebec tax authorities.
Revenu Québec said it had recovered nearly $ 6 million between 2019 and 2021, including penalties and interest.
However, some critics say Quebec needs to do more to recover lost income tax revenue.
The situation is particularly unsettling in Outaouais, the most densely populated area on the Ontario-Quebec border. More and more residents are reporting their neighbors to the authorities, especially when families have been holding Ontario license plates on their vehicles for years.
Reporting is likely to escalate as more and more Ontario residents move to Outaouais, attracted not only by lower housing and electricity costs, but also by more affordable services for families such as day care.
Alluring deception
According to some tax experts, some Quebecers are tempted to use an Ontario address during the tax season. For a few high-income earners, the savings quickly exceed $ 10,000.
“It’s cheaper to be in Ontario at all levels, and it’s very important when you compare by income group,” said Eric Jellinas, a professor in the tax department at the University of Sherbrooke, in a French interview.
Accountants say Quebec specialists working for Ontario-registered companies can save even more thanks to the province’s low tax rate for small businesses with less than three employees.
Investigations are on the rise
According to a spokesman, the Sûreté du Québec has investigated around 50 people in 2020 and 2021 on allegations of tax evasion, mainly in Outaouais. SQ declined to provide further details, saying it was working in partnership with Revenu Québec on the files.
SQ’s investigations were fueled by the work of patrol officers who carried out inspections when minor trips were banned during the pandemic. SQ also conducted investigations following complaints from neighbors during the period.
Revenu Québec is well aware of this scheme and spares no effort to oppose it. – Genevieve Lorie, spokesman for Revenu Québec
Revenu Québec, for his part, said he had assembled a specialized team of auditors in 2017 to deal with the “fake address scheme” used in border regions.
“Revenu Québec is well aware of this scheme and is making no effort to oppose it,” said Genevieve Lorie, a spokesman for Revenu Québec. “The full recovery of Quebec’s due tax revenue is a priority for Revenu Québec. It is a matter of justice for all citizens and businesses who perform their duties. “
In the last three years, the agency has checked declarations of 447 people and issued notices – often over several years – to 179 of them. In total, Revenu Québec raised $ 5.7 million in additional revenue.
The Quebec finance minister’s office said it was well aware of “the phenomenon of tax evasion seen in border regions with other provinces”.
Difficult to determine
Newcomers to Quebec have 90 days to officially register their vehicles at the Société de l’assurance automobile du Québec. They begin to receive coverage under the provincial health plan after three months in the province and must pay their taxes in Quebec as soon as they establish their primary residence in the province, on December 31 each year.
Gélinas said that the main place of residence is determined by a series of objective criteria and not by the personal preferences of the taxpayer. However, the tax attorney says it may be difficult for Quebec authorities to identify Quebec residents who use Ontario addresses.
Quebec is the only province to have its own tax collection agency. Residents of other provinces simply file a return with the Canadian Revenue Agency, which handles federal and provincial components.
Jean-Paul Perrot, president of a group called the Impératif français, said authorities were complacent about the situation involving “fake Ontarians”. (Radio Canada)
Even in cases where a fake address is used, the CRA does not lose money.
“The federal component is paid anyway, and the provincial component is paid in Ontario, so there really isn’t anyone who will complain about it except Quebec,” Gelinas said.
A group called Impératif français has been complaining about the situation for years, saying authorities were complacent about the situation involving “fake Ontario residents”.
Jean-Paul Perrot, president of the group, said in a French interview that Quebec taxpayers are the victims, “given that they are the ones who have to pay taxes to these fraudsters, in addition to their own.”
Opposition calls for police blitz
Andre Fortin, the Liberal MP for driving Pontiac in Outaouais, said he regularly heard complaints about fiscal injustice.
“This is a scam,” he said in a French interview. “It’s all the regular taxpayers, the people who do things the right way, who pay the bill at the end of the day.”
Fortin added that according to his talks with SQ, investigations into these issues take several days.
Pontiac MP Andre Fortin says the blitz of law enforcement would send a clear message that fraud must stop. (Jacques Boasino / Canadian Press)
Provincial authorities need to send a clear signal to the population that they are taking the issue seriously and increase the number of active investigations, he said. Authorities must, among other things, target people who have settled permanently in their homes during the pandemic.
“A blitz would send a message. There are many people who, if faced with the threat of being caught, who would do the right thing,” he suggested.
Fortin said it was currently impossible to quantify Quebec’s tax losses. He is convinced that the total amount significantly exceeds the amount recovered in recent years by Revenu Québec.
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