Aftermath of COVID, our tax system & the CRA

The Aftermath of COVID, our tax system and the CRA
By: Harpreet Wadehra, CPA, CA

During the initial stages of COVID-19, our lives were turned upside down. At one point, no one (yes, no one!) knew what was happening, what was going to happen and what actually happened.

It seems like a blur. My thoughts have been tucked away for some time. Today, I thought of reflecting on what has transpired over the last two years. I’ve internalized and realized a lot, yet I will share only some of my pre-dominant thoughts. Think of this as a ‘venting session.’


1. Reality check – there was really a pandemic

First stage of realization is accepting the truth. The truth is that there was a pandemic. Whether you believe in its existence, the treatment of it, the vaccine mandates, air travel restrictions etc – you cannot deny that covid existed. We have been subject to lockdowns, restrictions with travel, food etc. Lets accept this reality and finally move on.


2. There are no simple answers

Remember those days when life was black and white? Answers were a ‘yes/no’ and when we actually had an answers to our questions? Well, those days are long gone. Nothing is simple, there is never a quick question and never a quick answer.

For example, when a client calls and asks, “I am buying a car, should I lease it or buy it?”, I don’t think I have ever answered that question with a one-word answer. Ninety-nine percent of the time the answer is, ‘it depends.’ It depends on the lease payments and purchase price. It depends on the interest rate or implicit lease rate offered. It depends on the percentage of the car used for business. It depends on the other vehicles you have. It depends whether it’s a zero -emission vehicle. It purely just depends.


3. Government “assistance”

Various levels of government offered a lot of funding and programs to assist taxpayers/businesses maneuver through the pandemic. The reality is that some taxpayers/businesses received money/benefits that they were not entitled to. Some taxpayers/businesses received benefits which they did utilize and used to sustain themselves during the pandemic. However, the sad reality is also that some taxpayers/businesses that needed assistance, did not receive anything.

I believe these programs were horribly crafted, horribly distributed and horribly accounted for. There were several situations where taxpayers/businesses that received funds should not have received them as they did not need them. There were situations were taxpayers/businesses that needed them (i.e. start ups) were not eligible for them. There were situations where talented taxpayers/businesses were taking advantage of the funding via inactive companies. When large amounts of funds are being distributed, there should have been basic measurers in place to ensure that taxpayers/businesses were active and regularly filing tax returns. How can funds be distributed to taxpayers/businesses that did not make it a priority to file income tax returns on time? How can we trust that the monies will be returned in a timely manner? These some of the few easy indicators!

Yes, government assistance was provided, but lack of accountability into collecting these funds will put us in a fiscal deficit for years and years to come. Sad reality.


4. Complications of our tax system

I fail to understand why our tax system is so complicated. Why are there are so many exceptions to a rule that even a general practitioner cannot give advice? I understand that exceptions exist because of “tax avoidance” strategies made primarily by those who can afford to have smart advisors create creative tax plans, but have we ever thought why taxpayers try to find ‘loopholes’?

A common income tax strategy is income splitting with spouse. Well, why can’t we have a system like the US where spouses’ income is combined to come up with a family income (option to file this way). This would avoid so much hassle with drafting strategies for income splitting, spousal credits, transfers etc.

I don’t mind paying my fair share of taxes – we have a health care system to pay for, roads, infrastructure etc. My issue is when these tax dollars go into mindless bureaucratic departments that take so long to resolve situations that an average person gets frustrated with the situation and keeps fighting for a few months and then gives up. When the situation is finally resolved, we forgot why we were upset in the first place! I have personally had CRA representatives provide me with incorrect information. I have personally argued with CRA representatives about the timeline for processing a client’s income tax return ( often times the answer is, this is within the stipulated 180 days policy). A taxpayer cannot get their mortgage approved because they are waiting for their NOA. A student who has a simple tax return and is not getting their refund due to CRA flagging the return? No one can explain what the hold up is related to. Why does our tax administrative system have to be so laborious?

Why aren’t simple tax returns filed automatically online? Why do we wait for a taxpayer to file their return? If a return is simple, it should be filed automatically and the taxpayer file a form to claim certain credits? How much money, time and sanity would we save by not having to reply to CRA audit letters? If the CRA has certain information, then just share it with the taxpayers!

I am not saying these are the solutions. I am just questioning why no one is looking at our overly complex tax system to evaluate whether a complete U-turn is needed. How long can we go in the wrong direction before we realize we are getting further and further away from our destination?


To conclude, life is sometimes complicated and other times made complicated. I feel we are forced to live in a system which is overly complicated for no reason. Lets reflect and evaluate and see if a new approach is needed!


The opinions expressed in this article are those of the author.


Connect with Harpreet by calling 905.790.0657 Or email or visit us


  • Happy

    Remember it wasn’t a virus that created lockdowns and mandates, it was the government.

    It was not the virus which was unprecedented, it was the response.

    Now we know these policies were only destructive and we should NOT forget and we should question and make people accountable for what they did.

    It will happen again if the government gets away with it in some other form. It was the largest wealth transfer ever. There was definitely some planning involved at some stage. We were all lied to.

  • Munish

    Thanks for posting this valuable opinion. I completely agree. Overly complex system serves in favor of Govt. and bureaucrats; it justify over 50,000 CRA staff that eat up taxpayers money. Money that Ottawa receives it waste at least half of it and the rest is spend for health care, infrastructure etc and that too it spends very poorly.

    Take any example, how CPP contributions being increased 4.95% for many decades, and now to 5.95% slowly. If someone contributes for 38-45 years contribution of 11.90% (5.95%+5.95%) ones salary this person and his employer will contribute max $7,500 for 45 years will only qualify $1,300 monthly pension (inflation adjusted $3,150per month in 45 years) or 15,600 yearly (38,000 inflation adjusted at 2% in 45 years from now) will receive for roughly 20 years based on 85 life expectancy and retirement at 65. meaning contributions of 373k (7.5 x45 years) only grew to 220k FV meaning a negative growth and still wealth managers will be paid in millions and no one will questions the integrity of the system? Invested same just without any investment knowledge in S&P500 7.5k / year over 45 years at 8% (historic growth for almost 80 years) will provide with 3.1 million value to tax payer which can equate to a 295k yearly income if done privately vs Government pension of 15.6k (38k inflation adjusted) per year that too with restrictions and family can not get it if tax payer passes away or wants to early access his own money. This is an example of how government is using legislation to play against taxpayers which can not make sense of this overly complex system.

    If tax system is simple CRA’s (tax administration branch of Finance Canada) 50, 000 staff can be replaced with a private company of 5000 employees doing their job much more efficiently and will and will save tax payers billions of dollars which are being wasted. India has done successful experiments one of the example being TATA replacing government bureaucrats in passport offices making services quicker, efficient and costs effective for the tax payer . If we don’t learn quickly, question the Govt. Canadians taxpayers will face consequences for decades to come if government keeps getting stronger and takes control of areas of human freedom for which it has no capability to take charge of. Canadians are already facing consequences in cost of living crisis, rental crisis, helathcare overburdened and wait time crisis, passport offices and govt services without any exceptions.

    COVID was used by government as great opportunity for wealth transfer, which tax payers will pay over the coming years or decades.

    As one nobel laureate said “no body spends someone else money wisely except that person” SO NOT ASKING GOVERNMENT TO SOLVE OUR PROBLEMS IS THE ANSWER. UNTIL WE ASK THEM TO HELP THEM WITH THIS OR THAT THEY WILL KEEP TAKING CONTROL OF AREAS WHICH THEY MANAGE POORLY AND WASTE RESOURCES AND TAXPAYER DOLLARS. Only allowing a very limited responsibility to government such as national defense, public safety, justice and letting it do this efficiently and having strong control in place for a change of any authority same as private companies.

    This is just my opinion.

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