He followed a debunked conspiracy theory to claim a tax refund.
uncertain
He → follow → refund
So why did the CRA agree to a $40M payout?
asserted
CRA → agree → payout
Agency scrambling to recover fraudulent payments issued to ‘sovereign’ groups
In the summer of 2023, northern Ontario ironworker Jonathon Pearce filed bogus tax returns to the Canada Revenue Agency, falsely claiming he was owed refunds going back several years totalling more than $40 million.
asserted
he → scramble → million
Internal records obtained by CBC's the fifth estate show the agency did not check the veracity of the returns and two weeks later began sending out the refunds in instalments to Pearce's bank account, including a $10-million deposit on Aug. 8, 2023.
asserted
agency → obtain → Aug.
Pearce, a longtime resident of Temiskaming Shores, 500 kilometres north of Toronto, initially declined an interview.
asserted
Pearce → decline → interview
But when fifth estate co-host Steven D'Souza knocked on his door recently, Pearce said he was as surprised as anyone when the millions landed in his personal bank account.
asserted
millions → knock → account
"I thought [the CRA] would turn around and say, 'I'm sorry, sir, this doesn't work that way.'
asserted
this → think → ?
Next thing you know, [I was] getting a refund," he said.
asserted
he → know → refund
"Well, this is an easy way to create money."
asserted
this → create → money
A fifth estate investigation has found that Pearce is one of a growing movement of so-called "sovereigns" who believe Canada as a country does not exist.
asserted
Canada → find → country
Following debunked online conspiracy theories, they have successfully duped the CRA into repeatedly handing over millions in bogus refunds, taking advantage of massive gaps in the agency's fraud detection systems.
asserted
they → follow → systems
A CRA affidavit obtained by the fifth estate shows that Pearce himself contacted the agency's call centre 10 days before he got the refund.
asserted
he → obtain → refund
An agency investigator who later listened to the recording stated that Pearce outlined the tax "scheme" and his conspiracy beliefs.
asserted
Pearce → listen → scheme
Despite Pearce's phone call, the agency still deposited millions in his bank account.
asserted
agency → deposit → account
- Watch the full documentary, "The Sovereign Swindle," from the fifth estate on YouTube or CBC-TV on Friday at 9 p.m.
After the agency looked into how Pearce got his refund, leaked records show it identified that between May 2023 and January 2024, nearly $300 million in bogus claims were linked to the same tax scheme as Pearce.
uncertain
million → watch → Pearce
It is unclear how much was paid out.
uncertain
much → pay → ?
One auditor later wrote there was no validation process in place to "verify the legitimacy" of the requested refunds before they go out.
asserted
they → write → refunds
Heather Evans was appointed commissioner of the Canada Revenue Agency on July 13, 2026.
asserted
Evans → appoint → July
Evans declined an interview with the fifth estate.
asserted
Evans → decline → estate
In a recent statement to the fifth estate, the CRA said it is "unable" to know how much money in total the agency has paid out in bogus returns to sovereign citizen groups, also known as "tax protesters," because it does not track fraudulent returns by "personal views or intent."
asserted
it → say → views
The commissioner of the Canada Revenue Agency, Heather Evans, declined an interview.
asserted
commissioner → decline → interview
The minister responsible for the agency, Finance Minister François-Philippe Champagne, told the fifth estate he was unaware of the specific allegations.
asserted
he → tell → allegations
"We have a robust process to make sure of the integrity of what we do at the CRA, but we'll be looking into that," he told co-host Steven D'Souza outside a recent cabinet meeting.
asserted
he → have → meeting
An in-depth review of Pearce's Facebook profile shows he follows a debunked online conspiracy theory falsely claiming that every Canadian has a secret trust set up for them when they are born worth millions.
asserted
they → show → them
According to the fallacy circulating online, only people with specialized knowledge are able to unlock the funds.
uncertain
people → accord → funds
Former CRA investigator Shawna Roy says the theory is ludicrous and that there is no pot of money assigned at birth.
"That is not a thing," she said.
asserted
she → say → birth
The government does "not have a trust assigned to you" when you are born, Roy told the fifth estate.
asserted
Roy → have → estate
Former Canada Revenue Agency investigator Shawna Roy thinks there needs to be more checks and balances at the CRA to stop bogus refunds from being sent out.
asserted
Roy → think → refunds
Pearce, however, said he believes more strongly in the debunked conspiracy theory than ever because the CRA did, in fact, give him the money.
asserted
CRA → say → money
"If the CRA gives me money, who are you to f–king question it?" Pearce told D'Souza.
asserted
Pearce → give → D'Souza
"As far as I'm concerned, it was between me and CRA.
asserted
it → concern → me
If CRA had a problem, they wouldn't have given me the money.
asserted
they → have → money
In his return, Pearce filed T4A slips, which are typically used to report extra income.
asserted
which → file → income
In his case, Pearce did not report any income, but erroneously stated he had paid millions in taxes since 2016 and wanted it refunded.
asserted
it → report → 2016
CRA's conduct 'enraging,' says former investigator
Roy told the fifth estate Pearce's views are not based on fact or law and that he clearly filed a bogus tax return at the expense of the public purse.
asserted
he → say → purse
She said it is concerning that three years later he appears not to have been charged with tax fraud.
asserted
he → say → fraud
"I can't comprehend it, I can't make sense of it."
asserted
I → comprehend → it
Roy said if the agency had done even a little due diligence, it would have known that a factory worker requesting a $40-million refund would probably not qualify for one.
asserted
worker → say → one
"I think it's enraging."
asserted
it → think → ?
- If you have tips on this topic please email, in confidence, Harvey.Cashore@cbc.ca or fifthtips@cbc.ca or call or text 416-526-4704.
asserted
you → have → 4704
…and 48 more, not listed.
The Aporia
