By: Korie Marshall
There is a new term used by the Canada Revenue Agency – “Lerouxed,” which means being put in a no-win situation; even if you win, you lose.
It started with a Valemount businessman – Irvin Leroux of Irvin’s RV Park. Leroux recently became a hero of the Canadian taxpayer after suing the CRA. The judge agreed with Leroux, saying the CRA owed him a duty of care, something a judge has never said before in Canada.
But his fight is not over. He wants to get compensation from the Canadian government, and he wants to help other Canadians who have also had their lives destroyed by careless treatment from the federal tax agency.
Leroux, now 70 and living in Prince George, says it was his dream to open the RV park at the base of Terry Fox Mountain, retire here and have over 10,000 camper “friends” join him every year. Then a mistake by the CRA cost him everything.
“That RV Park was my dream come true,” Leroux told the Goat in an email. “We won the Tourism BC Superhost Award in 2003. Little did I know my own government and its corrupt, all-powerful, rogue agency would take actions that would cause me to lose it all.”
In 1992 Leroux developed his land in Valemount, creating a subdivision and the RV Park. In 1996, he says on his website www.leroux.com, an auditor from the CRA showed up to look at his records for 1993-95, and then took his business and other records, and misplaced them.
“He told me that someone put them on the pile that was to be shredded,” says Leroux. “Without my receipts to show my business expenses, numerous tax audits over several years concluded that I owed almost $900,000 in personal income tax, plus over $100,000 in GST, including interest and penalties.”
At one point, Leroux says he went to the tax court of Canada, who said the CRA actually owed him $24,000, but he’s never gotten any of it. In the meantime, Leroux says he either lost or had to sell everything to appease his creditors and pay for the litigation. He says he lost $4.5 million dollars in business and personal assets because of the actions of the CRA.
Karen Selick, litigation director for the Canadian Constitution Foundation, calls him a hero to the Canadian taxpayer. The reason is because after 18 years of fighting the CRA, Leroux won a decision in the BC Supreme Court that found the CRA owed him a duty of care – to not be negligent with him. In an open letter to Prime Minister Stephen Harper, Selick says the April 30, 2014 ruling by Madam Justice M A Humphries (Leroux v. Canada Revenue Agency 2014 SCSC 720) is precedent-setting – never before has the CRA been told by a court that it has a duty to individual taxpayers to treat them with care.
During the trial last September in Prince George, the CRA’s lawyer Elizabeth McDonald contended CRA auditors acted appropriately; that the documents were not lost but provided by Leroux in a piecemeal fashion, and the problem was Leroux’s failure to properly keep his books, his habit of making improper claims and filing appeals of his tax assessment after the deadline had passed.
The trial judge found insufficient evidence that the CRA’s treatment of him led to his financial ruin.
Selick disagrees with Justice Humphries. In a story in the Financial Post, she spoke to a Toronto tax lawyer who litigates against the CRA, and who said it is easy to understand how the large penalties and liens imposed on Leroux led to his financial difficulties.
Selick says the Canadian Constitution Foundation has been assisting Leroux since 2010, because their mandate is to advance the rights and freedoms of Canadians. “We’ve done that by establishing in reported case law that the CRA must treat taxpayers in a careful and non-negligent manner. But it is not within our mandate to get compensation for one individual when a judge has made a judgment call (erroneous in our view) that his mistreatment didn’t cause his financial disaster.”
So Leroux started a crowdfunding campaign at https://www.indiegogo.com/projects/road-to-justice-and-accountability to take his fight for compensation from the CRA to the BC Court of Appeal. The campaign raised over $23,000, enough to meet the first goal of $15,500 to pay for the court transcript. “The duty of care decision is only halfway to holding CRA accountable,” says Leroux on his crowdfunding website. “The other half is making them pay.” He says the CRA meanwhile is also challenging the decision “because a) they want me to pay their costs and b) they want to challenge the duty of care that was won in my case that now holds CRA accountable to Canadian taxpayers.”
After 18 years, Leroux’s battle goes on.
“I have won close to ten motions against the CRA, been awarded costs that I have never received and still they fight me with unlimited resources of the Department of Justice,” Leroux told the Goat. “CRA has destroyed many a family and business in this country and it is time to stand up for all taxpayers.”