Fix Bill C-31 — Stop CRA's 3 New Audit Powers From Hitting Ordinary Canadians

Bill C-31 gives the Canada Revenue Agency three new audit powers. It passed its main vote in the House of Commons in June 2026 — by five votes. It is now before the Finance Committee, and the Senate is already studying it in parallel so it can move quickly this fall.

Almost nobody in Canada is talking about it. Here's what's in it, why it exists, and what we're asking Parliament to change before it becomes law.

The three powers

1. A $50-a-day fine for paperwork. If CRA decides you haven't "adequately" answered a request for documents, it can fine you $50 per day, up to $25,000. The bill doesn't define "adequately." One auditor decides. No judge, and no independent review before the fine starts running. There is no minimum threshold — it can apply to any taxpayer in the country.

2. An audit that never has to end. Today, CRA generally has about three years to reassess you. Under this bill, that clock can freeze — with no end date. And in the newest version, your clock can freeze because of someone else: a family member, your company, a business partner who goes quiet.

3. An automatic penalty of 10% of your entire year's tax if a document fight goes to court and you lose — even if you never owed an extra dollar. Earlier drafts said "up to 10%," which let a judge reduce it. That flexibility was deleted. And its only threshold — $50,000 of tax in a year — describes a successful contractor or a retiree who sold a rental property, not an offshore fortune.

Why these powers exist — the honest answer

The government has a real problem, and we won't pretend otherwise. A small number of wealthy, well-advised taxpayers have learned to stall audits for years: produce boxes of documents but not the ones that matter, litigate every demand, and run out CRA's reassessment clock. When CRA finally wins the court order, there's no penalty for the years of stalling. The delay is free. These powers were written to end that game — and for those files, ending it is fair.

The problem: they built a hammer for a few hundred files and aimed it at 41 million people

Nothing in this bill limits these powers to the sophisticated files they were designed for. No minimum on the daily fine. An undefined standard, decided by one auditor. A clock that freezes because of other people's conduct. And when a court rules CRA should never have issued a freeze notice, CRA keeps the frozen time anyway.

Meanwhile, the powers are too weak to scare their actual targets: to a file with $10 million offshore, a $25,000 cap isn't a penalty — it's a parking ticket.

What CRA's own data shows

In 2026, CRA data released under access to information showed what the dispute system these powers would join actually looks like: 150,627 formal disputes filed in 2025 — the most ever recorded, triple four years earlier — a backlog growing by more than 60,000 files a year, published waits of one to two years (with some objections taking more than a decade), and, when disputes are finally resolved, 44 cents of every disputed tax dollar returned to taxpayers. For penalties: half.

A system that's corrected that often when tested should not be made faster without being made fairer.

What we're asking Parliament to change

We are not asking Parliament to kill the bill. We're asking it to fix the aim:

1. Real minimums — thresholds high enough that these powers only reach the large, sophisticated files they were written for.
2. Independent review first — no fine should start on one auditor's say-so.
3. Judges keep discretion — restore "up to 10%."
4. Symmetry when CRA is wrong — if a court says the notice shouldn't have existed, the taxpayer gets their time back, and nobody's clock freezes over someone else's conduct.
5. Make it actually work on the real targets — scale penalties to the money at stake, fast-track document disputes in court, and award costs against taxpayers whose challenges prove to be delay tactics.

This works. We've already proven it.

The first draft of these proposals included the worst power of all: CRA questioning you under oath, during a routine audit, with no judge and no lawyer. Enough professionals and ordinary Canadians pushed back — and it was removed before the bill was even introduced. Amendments happen. The margin holding this bill up is five votes.

What you can do (5 minutes)

Sign the national petition on Change.org — https://www.change.org/p/stop-cra-s-3-new-audit-powers-protect-canadian-taxpayer-rights
Send the letter. CRA doesn't write tax law — Parliament votes on it. Download our free MP letter (it asks for exactly the five fixes above), find your MP at ourcommons.ca, and send it.

This page is general information, not tax or legal advice. Campaign by Sunny Jaggi, CPA, CA, MTax — The Advisors Table.