Herb Metcalfe was given a conditional sentence of two years less a day, including 12 months house arrest, plus the fine, which equalled the taxes evaded.
Metcalfe is a co-founder of Capital Hill Group, a well-known lobbying firm. The firm said he has left the company.
"Herb is no longer involved with the Capital Hill Group or its operations,'' account manager Joanna Carey said in an email. "We continue to move ahead with business as usual.
Metcalfe pleaded guilty in the Ontario Court of Justice to a single count of tax evasion after a revenue agency investigation.
The court was told that Metcalfe received payments and benefits from 2002 to 2006 totalling $1,366,411 that he did not report on his personal income tax returns.
The revenue agency said Metcalfe prepared his returns each year by hand, and knew — or was wilfully blind to the fact — that the income he received was required to be reported on his returns and was taxable.
Metcalfe has long been a senior Liberal strategist and adviser and was prominent in the party's inner circle.
He worked on Stephane Dion's successful leadership campaign in 2006. Earlier he was campaign chair for Liberal John Manley.
Metcalfe was also a senior adviser to Dion leading up to the disastrous 2008 federal election.
In the 1970s and 1980s, he worked in the offices of several Liberal cabinet ministers before turning to lobbying.
"The Canada Revenue Agency pursues tax evaders to maintain public confidence in the integrity of the tax system,'' Vince Pranjivan, assistant commissioner of the Ontario region said in a news release.
"Canadians have to trust that our self-assessment system is working and that it is fair.''
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