Small businesses are held to hard standards. File on time. Pay on time. Respond promptly or face penalties and interest. Hard standards are good. It’s time CRA was held to them, too. Photo by HYUNGCHEOL PARK/Postmedia

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I run an accounting firm that works with small and medium-sized businesses, which means my team spends part of every month inside Canada Revenue Agency reviews. Here is what it can look like from our side of the desk. A review that should take months stretches into years. Every so often, the file lands on a new agent, and we start over: re-explain the history, resend the documents, reargue points that were settled two agents ago. When numbers come back wrong again, we refile and wait months more.

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While that clock runs, other filings sit in limbo. Refunds are held. Balances under dispute keep accruing penalties and interest. Though the agency owns the delay, the meter runs on the taxpayer.

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Complaints to the Taxpayers’ Ombudsperson hit 3,558 last fiscal year, up 27 per cent from the previous year, according to the office’s annual report, released in June. The Auditor General’s own findings from last fall point in the same direction. Callers to CRA contact centres waited an average of 31 minutes, and agents answered individual tax questions accurately just 17 per cent of the time. Even on business tax and benefits questions, the agency’s own testing found agents were right only slightly more than half the time.

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For a business, a CRA delay is not an inconvenience. It is frozen working capital. A refund that sits for months is cash the business cannot put into inventory, payroll or growth. A disputed balance accrues interest on a timeline the business does not control, at rates no owner would accept from a lender. I have watched owners defer hiring because five figures sat in administrative limbo.

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Then there is the cost nobody invoices. When an agency’s own agents cannot reliably explain its rules, businesses stop relying on the agency and start paying professionals for answers the public system was supposed to provide. The quiet economics of the Auditor General’s account is that the cost of a public institution’s failure has been privatized. And it lands hardest on the smallest players: multinational have tax departments, dozen-person companies don’t.

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You might assume CRA’s dysfunction is good for my business. It is not. Once we file a dispute, we follow up every two weeks, sit on hold, and re-explain the situation. We billed that work once, and we do not charge clients for the agency’s delays. A second invoice for the CRA’s failure would only compound the insult. Nobody builds a firm hoping to shepherd a file to its fourth agent.

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There is also the distraction. In a small company, the owner’s attention is the scarcest resource on the balance sheet. Every hour spent re-explaining a file is an hour not spent on customers, staff or strategy. And the owners living this are people who follow every rule, remit every instalment and file on every deadline, but cannot get a straight answer or settled file in return. Theirs is the specific fury of a customer who pays for a service, receives dysfunction and is then charged interest for the privilege.