The Summer is just getting started up here, north of the 49th Parallel but from where I sit it’s looking like it’s going to be a long one. I’m talking about the length of Summer, not the length of the 49th Parallel. But since you brought it up, the 49th parallel makes up almost 1300 miles of the US-Canada border. File that piece of useless trivia away and instead, consider the feature image for this article, a promotional poster for the 2012 movie “How I Spent My Summer Vacation” which starred Mel Gibson, Meryl Streep, Julia Roberts, Jane Fonda and a long list of people I’ve never heard of.
Here’s a capsule summary of the movie:
The film, directed by Adrian Grunberg and co-written by Mel Gibson, follows a career criminal known only as “the Gringo” who is captured by Mexican authorities after a high-speed border escape. He is imprisoned in El Publito, a lawless and corrupt government facility that operates more like a small ghetto than a traditional institution of Democracy.
At this point, I want to make myself perfectly clear that the review was NOT, and I repeat NOT, in any way intended to be an allegorical reference to the Government of Canada in general and definitely NOT to the Canada Revenue Agency (CRA) in particular. Notwithstanding, I note that CRA can be short for Continually Raiding Assets. Just saying.
So. Up here, we pre-pay our income tax in installments based on the income in the previous two calendar years. Rumor has it that the same thing goes on in the U.S. These installments are due on March 15th, June 15th, September 15th and December 15th. Installments are only estimates, so if your income changes significantly one way or the other in the most recent calendar year, relative to the year before that, you can wind up overpaying on your future taxes or underpaying.
Here’s the catch: if you overpay, you don’t get any interest on the excess: you just get a rebate. If you underpay, you are charged daily interest on the shortfall, plus a penalty. Agents of the CRA may also come to your house and remove any gold crowns you might happen to have. Apparently, the concept of fairness and symmetry is not a big priority for the Federal Government when it comes to taxes and interest accrued. Timeliness is also pretty low on the totem pole.
Here is an example of the section of the Canadian tax code that pertains to the calculation of installment payments:
Read on.
My March 15th installment this year was sizeable and so was the June 15th installment. Nevertheless, I dutifully paid the March 15th installment and set up an automatic Preauthorized Debit (aka PAD) from my chequing account for the June 15th installment. Time passed.
On April 21st a substantial tax rebate from the CRA was directly deposited into my chequing account, meaning that I overpaid my taxes in 2025. I think. Figuring out whether you should pay the installments or just wing it and see which way your income is going to go for the rest of the year is sort of like going to Vegas. So right or wrong, I cancelled the June 15th PAD and received a letter of acknowledgement of the cancellation from the CRA. All good. Right?
More time passed and the morning of June 15th rolled around. I happened to check my bank account and was dismayed to see that the CRA had gone ahead and withdrawn the installment amount despite the cancelled PAD. I suspect the withdrawal happened approximately 50 microseconds after midnight.
I called the CRA and just for the record, it can take anywhere from ten minutes to two hours to navigate the nested layers of bureaucracy in order to speak to a human being. I finally reached a woman who was very nice and very sympathetic. We’ll call her Sympathetic Lady #1. I explained the situation. Unfortunately, SL#1 had no idea how or why the June 15th withdrawal happened. I reminded her that the government had formally acknowledged the PAD cancellation. She put me on hold for a few minutes then came back on and promised to promptly initiate the process of returning my cash.
I hung up, thinking that I’d likely see the $$ reappear in my account within the next couple of days. I thought to myself that all somebody in Ottawa had to do was get on a computer, fill out a form and hit “Enter” or maybe “Return”. I know, I know. You’re thinking to yourself: this guy is a naive, sheep-like dunderhead.
Two days later there was still no refund. I called the CRA again and reached yet another nice, sympathetic person. We’ll call her Sympathetic Lady #2. We discussed the highly asymmetric nature of the cash withdrawal timescale vs the cash refund timescale. We also discussed the concept of having to pay interest on money ostensibly owed to the Government vs not having to pay interest when the Government mistakenly scoops up your money and sits on it.
SL#2 put me on hold for a few minutes and then came back on and reassured me that the process had been initiated and the refund would be forthcoming. I know, I know. You’re thinking to yourself, this guy is even more of a naive, sheep-like dunderhead than I originally imagined.
Still more time passed and I called the CRA again, reaching yet another person who was as nice and as sympathetic as SL#1 and SL#2. We’ll call this lady SL#3. I asked her if she had any idea when I would get my refund. Once again, the highly asymmetric aspect of the unfolding situation (timescale and interest) came up in the conversation. SL#3 put me on hold for a bit and then came back on to say that it normally took the government much longer to return a large sum of money than it took to return a “few hundred dollars” and said the refund could take another 8 weeks to process. Apparently printing money takes a lot longer than I thought.
Anyway, after I recovered consciousness, SL#3 and I once again revisited the concepts of asymmetry and the concept of basic fairness was also introduced into the conversation. Not surprisingly, SL#3 put me on hold for a few minutes. When she came back, she reassured me that the refund process was underway and that I would definitely receive a refund within ten business days, starting July 13th.
Today is July 11th. The clock will start ticking this coming Monday. The problem is that some people think that civil servants only put out about one day’s worth of actual work between 9 AM Monday and 4 PM Friday. (LET ME REASSURE YOU THAT I AM NOT ONE OF THOSE PEOPLE!!) This might result in 10 business days morphing into eight weeks. (I AM IN NO WAY SUGGESTING THAT I BELIEVE THIS WILL HAPPEN!!)
But just to be on the safe side, I’m just not holding my breath.
P.S. I lied about Meryl Streep, Julia Roberts and Jane Fonda.
The Department of Lateral Thinking 