If you fail to report income, unintentionally or not, don’t presume the CRA will simply find out and assess you for the difference. Always correct any errors as soon as they come to your attention, because if CRA finds out before you tell them, you may be subject to penalty, as well as interest (if applicable).
If you repeatedly fail to report income, penalties are even more severe: if you neglected to report some of your income in, for example, the current tax year, and also neglected to include some income in any of the three prior tax years, you will be hit with the “repeated failure to report income” penalty – which is 10% of the unreported income for the current year.
If you knew or should have known (“under circumstances amounting to gross negligence”) that the income should have been reported, you may face the “gross negligence” penalty – which is 50% of either the understatement of tax payable or the overstatement of tax credits claimed associated with the unreported income.
If it’s any comfort, you cannot be subjected to both a gross negligence penalty and a failure to report penalty!
But see also the 2015 federal budget’s proposed amendment to the Repeated Failure to Report Income Penalty, which would apply to 2015 and later tax years.
Source: Jamie Golombek, Financial Post. “A missing T5 slip can end up costing you big time in penalties.” Accessed September 23, 2015. http://business.financialpost.com/personal-finance/taxes/a-missing-t5-slip-can-end-up-costing-you-big-time-in-penalties.