Finance Committee on March 18th, 2010

[Stephen O'Connor]

At the current time, we're doing an integrated revenue collection system, for example, which is allowing us to integrate the revenue collection process.

Previously our revenue collection activity tended to be a little bit too vertical. We would look at a taxpayer's account and their T1 return, make some phone calls to them about what they owe us, and hang up the phone. Somebody else in the organization would realize that they also owed us GST money. Perhaps they're running a small incorporated business and owe us some T2 money.

These aspects were not integrated, so one of the processes, one of the investments we're running now, is an integrated system that would allow the collection agent, when the name is put up on the screen, to identify that not only does this person owe us money on the T1, but they also owe us money in these other areas. That way, the agent can pursue the person for the total debt, not just the single debt, while the agent has the person on the phone.

[Thomas Mulcair, NDP, Outremont, QC]

With all due respect to the agency, I can assure you, Mr. O'Connor, that what I'm about to say shouldn't be taken personally at all, but I suspect that many Canadians have just listened to your explanation and are wondering how a system that costs $5 billion a year and that is not integrated could possibly have been put in place. I have to say that I am at a loss for words when I hear an explanation like this.

Basically, I knew beforehand what your answer was going to be. I find your candour refreshing. You answer our questions clearly and I appreciate your professionalism. However, setting that aside, I do think that the public, and in particular young people, are scrutinizing the government's actions. When they see themselves saddled with two-year deficits in the order of $100 billion, they want assurances that we know what we are doing. Frankly, I think that before increasing your budgets, you should have looked for money within existing budgets. It's a classic response on your part to say that if we do not secure new money from the Treasury, we will have to sacrifice another activity. That's a classic response, because you control the purse strings. However, if the answer was to find new funds, while improving service to the public at the same time, I'm sure you would manage to do that.

[The Chair, Conservative, James Rajotte]

Merci, Monsieur Mulcair.

We'll go to Ms. Hall Findlay again, please.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Chair, my colleague will ask a quick question first. We're sharing.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Now that the end of the month is coming--I just have a quick question--everything has been spent thus far, I would imagine?

[Stephen O'Connor]

It's not quite everything, but an amount of this has been spent. We did do some risk management on this project.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Can you elaborate a little more on what exactly hasn't been, and will surpass the date, the end of March?

[Stephen O'Connor]

We still have these IT contractors working and we're still building the software, so I can't give you a percentage number as to how much of this $6.3 million is still to be spent this year, but in relative terms it's probably somewhere around one-twelfth, or something in that range. It's perhaps one-fifteenth of that amount.

[Filipe Dinis]

Mr. Chair, the only thing I would add to what Mr. O'Connor has just said is that we obviously operate from April 1 to March 31, so it's from now until March 31. As Mr. O'Connor has mentioned, some of this amount of money has been spent, but the plan is to fully spend this amount as required for this particular initiative, and for no other purposes than this initiative.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

So it's over the next few weeks.

Okay.

[The Chair, Conservative, James Rajotte]

Ms. Martha Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you.

Given the IT focus, can I ask you a question about the government enterprise network services approach...?

Was that a rolling of the eyes?

[Stephen O'Connor]

Yes, it was.

[Voices]

Oh, oh!

[Martha Hall Findlay, Liberal, Willowdale, ON]

Could I impose on you gentlemen to confirm whether or not your department is engaging in the GENS initiative? Maybe that's just a first quick question: is CRA involved in GENS?

[Filipe Dinis]

I'm not aware of our involvement. We may indeed be involved, but it would be our IT folks who would be able to respond to that. I'd have to say I'd like to come back to you on that one. I can't respond either way.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Then maybe, as was mentioned earlier, when we have other representatives back....

May I ask why there was that particular look when I asked the question?

[Stephen O'Connor]

It was purely and simply because I didn't recognize the name of the activity you were describing.

We have a tendency in the agency to have our own names for these projects, so we may be doing this but under our own different name.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Well, I ask because the GENS project is in fact coordinated out of Public Works and Government Services as an effort to integrate IT throughout the entire government, and when you're talking about this not insignificant money for IT and software—professional services and software—it actually is a legitimate question.

Do you know whether a part of this is in fact part of the GENS program? I know you mentioned SAP, but is it part of the GENS program or not?

[Stephen O'Connor]

This particular initiative is not. I would have known, if it were.

Are we participating in other aspects? We do participate with Public Works on a large number of Public Works-led projects.

What's underlying here is another example, however, of an integrated IT service. We do provide to CBSA IT services. When CBSA was created in 2003 and we went about splitting up the previous Canada Customs and Revenue Agency into the two component pieces, it was in a way much easier to divvy up the actual employees—“you're a customs person, and you're a tax person”—but when it came to our IT systems, they had become so integrated that it would have been enormously expensive at that stage to actually duplicate the IT systems and applications that were in play.

So in a serious manner, we are one of the shared IT services that didn't go under the banner of a shared service, but we are effectively a shared service arrangement with Canada Border Services Agency. They remit to us something in the range of $140 million a year for the IT services that we provide on their behalf. We have one integrated set of infrastructure. A number of our applications—certainly, for example, this system, our corporate administrative system—serve both the Canada Revenue Agency and the Canada Border Services Agency.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you.

[Filipe Dinis]

Mr. Chair, if I may, let me add as well that we are part of a large community in terms of moving towards the upgrade of our administrative system. Some departments and agencies have gone ahead of us, but we're on the front line of moving forward. As part of that greater community we are sharing lessons learned as well as taking best practices from those who went ahead of us vis-à-vis the application and the implementation of the various modules that are involved in this upgrade. It's not as if we're moving along solo. We are indeed part of a greater community wherein we're sharing best practices.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Monsieur Pomerleau, pour cinq minutes.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair.

Good day to both of you. First off, I would like to thank Mr. Mulcair for bringing one very important fact to light, namely that we tend to think that there is no money to be found within our administrations. In my opinion, there is money to be found without having to request supplementary estimates simply by doing better than we are usually do. But you are asking for supplementary estimates today and we will address your request.

I would also like to thank my colleague, Mr. Carrier, for pointing out that, on a policy level, there are millions of dollars to be had simply by getting those who don't pay taxes to start paying. We're talking about millions of dollars. I know that this isn't your responsibility, that it comes down to the policies likely ordered by the Department of Finance and applied by Revenue Canada or by the people in your organization that formulate policy. In my opinion, it has a lot to do with being “penny wise and pound foolish”. We focus a great deal on the small sum of $10 million that is needed, but not a lot on the hundreds of millions that go uncollected.

That said, I have two very specific questions for you concerning your rationale for requesting $10 million, less the amount that you will be transferring. You maintain that financial systems need to be improved. For the benefit of the people tuning in at this time, I would like you to give us a few examples of improvements to financial systems. You want to support the financial decision-making process. I thought that the Department of Finance has primary decision-making authority, rather than Revenue Canada. Could you explain to us exactly why that is and why you added the word “post-horizontal“? What's that all about?

[Filipe Dinis]

Mr. Chair, as requested, I'll give you a few specific examples of what this money is being invested in for improving our financial stewardship.

One of the items that Mr. O'Connor mentioned was the multiple spending authorities. More particularly, what that initiative does is allow us within the agency to basically create and track, at various levels throughout the whole organization, the various dollars and cents we receive within the $4.6 billion. We're now able to create a salary and operating capital envelope, if you will, as well as track our statutory amounts that come in to the agency.

Not only that; with this implementation, managers throughout our organization will have a clear understanding throughout the year of their spending patterns, if you will. There will be some warnings that will be generated once a particular budget is spent up to 75%, 80%, or 90%. These added elements of automation will allow us to better report from a transparency perspective on our spending patterns as they relate to the various buckets.

The other item that I wanted to touch on quickly is a module called project systems. Again on the financial side, we will now be able to track—and we have a capital budget, as you will see in our main estimates, of approximately $136 million on an annual basis.... These represent investments that we make annually, and many of them are multi-year. What this added tool will allow us to do is track that particular money.

In other words, we are able to fence the investments that we make internally, so as to be able to report accurately upwards to our senior management in the agency.

The third quick item on the financial side is something we call salary forecasting. Basically, what this will allow us to do is build on our ability to forecast our expenditures from a salary perspective. Obviously, with 44,000 employees in the agency and a salary budget representing close to 80% of our overall budget, a tool like this goes a long way, in terms of our ability to forecast expenditures on the salary side.

Those are three examples from the financial perspective that were put in place. As it relates to the horizontality, some of these elements will be used not only by the CRA but by CBSA as well. In particular, the multiple spending authorities module is one item that is being implemented for the benefit of both CBSA and the CRA.

Lastly, I'll touch on one of the workload management tools that we're putting in place on our HR side that will enable us to deal more effectively and efficiently from a compensation perspective. Obviously, again, with a large staff complement like ours, there are significant amounts of compensation and salary-related transactions. This module will help us to prioritize the workload.