Corporations making over payments to the Canada Revenue Agency and refusing to accept their balance have been receiving up to seven per cent interest, thereby costing the government $90 million over the last three years, according to a report by federal auditor-general Sheila Fraser.
The report states the agency recognized as early as 1991 that certain corporations were depositing and leaving large balances on their accounts, leaving officials to wonder "whether this was being done to take advantage of the favourable interest rates."
While the agency has tried numerous times over the years to refund as many of the balances as possible, it was met with "limited success." In these cases, the agency accepted the taxpayer's decision, continuing to hold the balance in the taxpayer's account.
In response, the Canada Revenue Agency will work with the Department of Finance to see whether legislative change will be necessary to remedy the problem.
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