“Please Charge Me” says Victim of CRA Bully Tactics
Canadians are less safe now than we would have been if David Elderfield had been allowed to finish his dream. The dream that turned into a nightmare for him.
I don’t know many people who demand that Canada Revenue Agency audit them. That’s what David immediately did when the CRA attacked his research and development company. And the CRA agreed to do that audit. But after the destruction of his company, Wayfare Identifiers, Inc., and seizure of his assets, the loss of his house, the damage to his relationships and reputation, David still has never been audited by the CRA. He estimates the CRA’s actions cost his group approximately $22 million based on binding investment agreements. Now his company is gone and with it the opportunity to make Canada safer. In a final plea for justice, he’s asking for the CRA to have him charged with a criminal offence and let the truth be determined in a court of law .
In 2005, without warning, the CRA seized the bank accounts of his company, WFI, and began a process that ended the development phase of a product that could have greatly improved our ability to monitor and inspect containers entering Canada’s ports. David and his business partner, Doug Martyn, had designed and engineered a system that they believed would significantly enhance security at the border, using technology to analyze cargo in 100% of the containers entering Canadian ports. He tells me that today, only about 4-5% of incoming containers are inspected using current methods.
Mr. Elderfield had done a prodigious amount of due diligence and sourcing of materials in preparation for a pilot project of his system that never materialized. He had met with government officials, border security and RCMP personnel to discuss the major risks they saw at ports and border crossings. He sought and received enthusiastic support from a number of prominent industry players who were prepared to participate in this pilot project. He also had lined up the necessary investment funds both from private and government sources. And, highlighting his own confidence in the project, he had extended his own personal loan to WFI of $1.3 million. He emphasizes that up until the moment when the CRA seized the company’s assets, WFI had not generated any revenues and therefore could not possibly have been guilty of tax evasion. It was a pre-production R&D company with great potential, not only for profitability but for improving Canada’s security, but at that stage it had not produced any revenue whatsoever. And, thanks to the CRA, it never did.
In 2005, WFI was preparing to launch its pilot project. WFI was formed in response to the world-changing events of 9-11. Following the collapse of the World Trade Center, David and Doug became passionately concerned about national and international security issues and began working to build a dynamic company that could make a difference at Canada’s vulnerable ports. Their efforts resulted in the invention of equipment and a system that they felt would greatly improve our ability to detect radiation, illicit drugs, arms and human cargoes.
They had achieved remarkable progress by 2005 and anticipated the company developing rapidly once the pilot project was complete. Then . . . the bank called. Automatic payments began bouncing. David discovered that the CRA had frozen his accounts. Things went downhill from there. The CRA contacted all WFI’s suppliers and financial institutions and demanded that they contact CRA before conducting any transactions with WFI. The combination of cash shortfall, the inability to pay suppliers, the taint on WFI’s corporate reputation due to CRA involvement and other factors put sand in the gears of progress. Immediately, WFI asked for that audit, for an opportunity to clear their name, to set the record straight and to get back on track for production and in-field testing. Once every week for over 17 months they contacted the CRA to try to schedule the agreed-upon audit. Three times the audit was promised but each time it was cancelled at the last minute.
Banks began calling in their loans due to calls from the CRA. Forced into foreclosure, David’s personal home was sold and the CRA took $35,000, an amount they stated in court was the final required payment. The Elderfields put the remaining money into the company that now held a binding valuation for 12 million USD from an investment fund. Then things got personal; the CRA⎯with no evidence⎯accused David of withholding personal income tax, based on income that he never received. Still no audit, no apology, no accountability from this powerful government agency.
David Elderfield has now lost his business, his potential income, his investment, his home and, unfortunately, his family. . . due at least in part to the stresses and strains of the collapse of his business and his dreams. Canada has lost an opportunity to improve our national security. The thought that the CRA or any government agency could act so callously regarding any case and act with so little regard for the rules of evidence is chilling, to say the least. The fact that the CRA could ignore for so long a call to audit a business that claimed (and still claims) to have been wrongfully accused of owing taxes is a huge concern. Every person accused of any wrongdoing is entitled to his or her day in court. Too often, government agencies assume autocratic powers and exercise those powers with flagrant disregard for due process. We’ve seen it, for example, with the occasional imposition of a social worker’s personal worldview in homes where foster children are receiving loving care from foster parents whose worldview differs from that of their case worker. The CRA’s handling of the WFI file is an egregious example of such bureaucratic overreach.
Arrogance and disregard for due process have no place in the public service. When a “civil servant” violates the rights of a taxpaying citizen for a fair and honest evaluation of facts, there must be accountability. The duty of care must be backed by compensation when agency personnel abuse their power to extract fines from citizens who are endeavouring to follow the rules. Mr. Elderfield deserves his day in court and he deserves compensation from the CRA if his claims are justified by 3rd-party examination of all the facts.
The CHP calls on the federal government to order an immediate audit of this case. Individuals within the CRA should be held accountable for wrongful acts. No Canadian citizen should be subjected to accusations of moral or financial wrongdoing without due process, without hard evidence and without an ability to appeal.
Here’s a detailed news story about the WFI case.
Mr. Elderfield’s personal account can be found here.
Here’s an article about other taxpayer concerns with CRA service.
The Christian Heritage Party is concerned about any misuse of power. We also have a better idea for taxation. If our Fair Tax were implemented, there would be no CRA. The CHP would replace the income tax and business taxes with a national sales tax on finished products. This would be a flat tax, equally applied to businesses and individuals at the retail level. To learn more about the CHP’s Fair Tax, watch this short video.
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