The Canada Revenue Agency is facing renewed scrutiny after a report revealed that officials later issued nearly $5 million in tax refunds based on “fraudulent” returns.
According to court records obtained by CBC’s The Fifth Estate, the agency paid $4,958,716.63 in May 2025 to a British Columbia woman who allegedly earned about $54,000 a year from a cannabis and grain business in the West Kootenay region.
“Upon review by the senior program officer (at refund examination headquarters) it was determined (that one of the forms on file) was invalid, and the $4.9 million refund obtained from the mistakenly approved slip was improper,” the CRA said in court documents.
Records show the returns included a claim of foreign income of about $10 million and a matching tax payment, effectively suggesting a 100 percent tax rate.
Despite being flagged for manual review, no follow up action took place.
The agency identified the error two months after issuing the refunds, but court filings indicate no immediate action was taken.
Authorities now believe that no taxes were paid and the income claimed, allegedly linked to the “United Nations”, did not exist.
The CRA says the woman now owes $7.9 million, including interest and penalties.
