Interest payments to corporations ‘unacceptable’: Hughes

OTTAWA – The Auditor General announced on Tuesday that corporations collecting interest of up to seven per cent on tax overpayments have cost the government more than $90 million over the past three years.

Carol Hughes (Algoma—Manitoulin—Kapuskasing), New Democrat National Revenue Critic was outraged to hear that such huge interest payments were diverting money from the public purse and lining the pockets of corporations.

“In an era of fiscal belt-tightening, news like this is unacceptable,” said Hughes. “We are going into deficit to be able to weather the economic storm, only to find out we have to make these payments because the companies like the interest rate better than the rates they are offered by financial institutions.”

At the heart of the problem are corporations leaving large balances in their accounts and receiving interest rates in the five to seven percent range. The Auditor General pointed out that the Canada Revenue Agency has attempted to refund the balances left in these accounts but these efforts have had “limited success.”

"When the Auditor General tells us that the Canada Revenue Agency has known about this since 1991 it certainly paints a sombre picture,” added Hughes. “The agency should have made this known sooner. I don’t think Canadians will appreciate the inattention of the CRA or the opportunistic behaviour of the corporations involved.”