You're correct but that isn't the answer he wants to hear.fuji,
You know not of what you speak. As someone who is actually in the tax business, the penalties are generally 50% of the tax owing plus penalties. Hence, if you knowingly did not declare income three years ago, your penalties and interest will be equal to the income tax owing. Additionally, the taxpayer will also need to pay considerable fees for legal and tax representation .Also, the Canada Revenue Nazis may press to have you convicted criminally.