Capital Gains:
It is not a black and white line whether you will get away with capital gains tax or not. If you buy crypto, and sit on it for a longer period of time, you have a stronger case. If you are buying and selling frequently your case becomes weaker the more frequently you trade.
Chance of being audited:
The government goes after "hot topics" pretty aggressively. During the real estate boom a few years back the tax break related to a home being a "residence" was widely being abused. The government hired 100s of new people to drive around and monitor houses to see if they actually had people living in them.
If you have used any of the Canadian exchanges, this is the easiest way for the government to get your information when they decide to review crypto. Evading taxes is a bad idea. Evading if you used a Canadian exchange, is playing with fire.
If you declare as capital gains, it is possible that they'll go after that as well. If trading takes up a "considerable amount of your time" they'll argue that it's your job. As a job, you are responsible for paying up to ~53% income tax.
There is a 3 year window in which the government can come after you once you file your taxes. The 3 year period only applies if you are not involved in anything they deem to be malicious. If you are filing wrong purposely, or evading in any form, they can come after you at any point after the 3 year period. The penalty is 5% yearly interest on the outstanding initial amount. It compounds daily.
Source: I had a meeting with 3 of the upper team members at
EY in January. Each had a different area they specialized in. This information is a summary of some of the topics we discussed.
