Different Tax Rules for Wealthy and Powerful

Brian Mulroney will surely be best remembered for the suitcase full of thousand dollar bills he received in a New York hotel room.

The riveting image of the former prime minister accepting wads of cash from a notorious lobbyist — admitted by Mulroney under cross-examination at a 2009 public inquiry — was so eye-popping that it completely eclipsed another fascinating aspect of the story: the sweetheart tax deal Mulroney got from the Canada Revenue Agency after he failed to report the cash.

Although Mulroney had hidden the cash payments (totalling $225,000) from tax authorities for six years, his lawyers managed to cut a deal that allowed the former PM to avoid any fines or penalties, and only required him to pay half the taxes he would have paid if he’d obeyed the tax laws — laws that chumps like you and me are legally obliged to obey.

It certainly looked like favouritism to a former PM. But another possibility is now emerging: that’s just the CRA’s standard kid-glove treatment for the wealthy and powerful.

That conclusion is harder to avoid in light of recent revelations that 26 wealthy Canadians were offered full amnesty from prosecution or penalty after they were caught hiding at least $130 million in offshore tax schemes set up by the giant accounting firm KPMG.