TORONTO — The federal government has warned Eritrea that its only diplomatic outpost in Canada will be shut unless it ceases all involvement in a discredited taxation scheme that has been linked to threats, intimidation and harassment.

In a diplomatic note obtained by the National Post, Canadian foreign affairs officials put the Eritrean regime on notice that its Toronto consulate must stop soliciting and collecting a “diaspora tax” for the tiny African dictatorship.

Should consulate staff do anything more than refer callers to an Eritrean government website, Ottawa will close the diplomatic post, said the diplomatic note delivered Thursday in a significant blow to Eritrea and its supporters.

“If the department continues to receive allegations that the consulate continues to solicit the tax, including through provision of amounts owing, requesting notices of assessment, and/or using agents or any similar activities, Canada will withdraw its recognition of the Eritrean consular post in Toronto,” the note said.

Described by a Canadian official as a “final straw,” the warning came after the National Post reported that, a year after Foreign Minister John Baird expelled the Eritrean consul-general over the issue, consulate staff continued to play a key role in collecting the 2% income tax from Eritrean expatriates.

Under the scheme, even Eritreans who had fled the repressive dictatorship were told to send their CANADA REVENUE AGENCY assessment notices to the consulate, which then calculated how much they owed. Those who decline to pay are denied basic services and face possible arrest should they return to Eritrea, while their friends and families in Eritrea are threatened and harassed, according to the RCMP.

The “diaspora tax” system has been condemned by the United Nations, which has asked member countries to end the practice. The UN has imposed strict sanctions on Eritrea over its clandestine backing of armed groups in the Horn of Africa, notably Al-Shabab, which killed two Canadians in Nairobi last year.

The consulate denies soliciting the tax, claiming it only provides “information” and that those complaining want to “destroy the Eritrean community.” But in phone calls secretly recorded by Eritrean-Canadians, consulate staff admitted they were still actively involved in the taxation program.

An affidavit signed by Wegahta Berhane Tesfamariam, a landed immigrant living in Edmonton, described how the consulate informed her she owed $1,200 in back taxes and that unless she paid her passport would not be renewed, meaning she would be unable to visit her husband in the United States.

The consulate instructed her to contact an agent in Edmonton named “Domenico,” who would arrange for her to ship the money to Eritrea. “He can connect you with other people who can take the money for you,” a consulate employee named Ketem said, according to the affidavit, which was sent to foreign affairs officials.

A Canadian living in Alberta who also recorded his calls said the consulate told him his wife and child would not be allowed to leave Eritrea until he paid up. A former political prisoner who fled the regime and now lives in Vancouver was told he could not have his university transcript unless he paid $6,000 in taxes.

The diplomatic note said the department “continues to receive serious allegations that the consulate of Eritrea in Toronto is violating its commitment to respect Canada’s conditions regarding the solicitation and collection of tax.

“Canada expects that the only action on the part of the consulate related to the 2% reconstruction and rehabilitation tax is to refer any inquiries about the tax to the government of Eritrea directly or to a government of Eritrea website.”

The senior consulate officer could not be reached for comment on Monday. The consulate has been without an accredited diplomat since the former consul-general’s expulsion last May. The consulate is currently staffed by locally engaged employees.

Every month, some 3,000 Eritreans flee the repressive  country, which HUMAN RIGHTS groups have called a “giant prison.”

National Post: Eritrea consulate receives ‘final straw’ warning to stop extorting expatriates in Canada