Finance Committee on March 1st, 2011

[Filipe Dinis]

Within the last 12 months.

[Paul Szabo, Liberal, Mississauga South, ON]

Really? You had a 10% increase in a year in human resources costs in investigations?

[Filipe Dinis]

We've realigned those resources from other priorities, as I indicated before. We just want to make sure that we are taking the necessary steps to deal with--

[Paul Szabo, Liberal, Mississauga South, ON]

Okay, but what I'm getting at is that all of a sudden the activities of CRA have had a significant shift in the last 12 months.

[Filipe Dinis]

That's with respect to the increased focus on investigations.

[Paul Szabo, Liberal, Mississauga South, ON]

On investigations, yes.

Now, I asked you earlier what happens when the economy is robust or when it's not doing so well, and how that affects your activities. You said that you didn't know.

[Filipe Dinis]

Well, Mr. Chair, in terms of the investigations--maybe I should bring clarity here--that's in terms of the internal investigations we do as opposed to the investigations from an audit perspective.

[Paul Szabo, Liberal, Mississauga South, ON]

What's the difference? An investigation is...the system seems to be frustrated or not working, and we have to fix it. This is non-productive work, really, other than trying to get recovery.

It's very significant.

I would have thought you would have known. That should be part of the education process here.

With regard to the shift into the HST, and relative to what was occurring during the GST, what was the experience with regard to investigations when we shifted into HST in a number of provinces in terms of the number of incremental...? When you change a system, people test the system out. What was the experience in terms of problems to be investigated?

[Filipe Dinis]

Mr. Chair, I don't have that response. It really is a program-focused question in terms of the compliance or levels of non-compliance with regard to the HST. I don't have that response.

[Paul Szabo, Liberal, Mississauga South, ON]

Finally, in terms of recoveries, when we do investigations, we often find that we can recover taxes owing and/or interest and penalties. What has been the recovery rate compared with the cost of the investigations?

[Filipe Dinis]

Again, that's very much, unfortunately, a program-specific question on our compliance programs area. I would have to get that information for you. I don't have the information.

[Paul Szabo, Liberal, Mississauga South, ON]

Do you have any idea whether or not we recoup the cost of investigations?

[Filipe Dinis]

Again, I'd hesitate to speculate. I'd want to get details--

[Paul Szabo, Liberal, Mississauga South, ON]

But you're the CFO. You have to know these things.

[Filipe Dinis]

Indeed I am the CFO. We are, however, a very large organization, and we have various programs within the agency. Unfortunately, I don't have the information as it relates to the compliance programs area, etc. I do commit to coming back to the committee with a response.

[Paul Szabo, Liberal, Mississauga South, ON]

Who would have that? Who would have that information?

[Filipe Dinis]

We have various programs within the agency, and they're headed by assistant commissioners of the various programs. One of the areas is the compliance programs branch. I would have to seek that information from that particular program.

[Paul Szabo, Liberal, Mississauga South, ON]

Or person; doesn't it funnel up to a person?

[Filipe Dinis]

Ultimately there is a person--that would be the assistant commissioner of compliance programs branch--but it's a large organization. That information has to be compiled and presented to the committee.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Dinis, I can tell you that I am not frustrated but I am surprised that you do not have personal knowledge, as the CFO, of the fundamental statistical performance measures of the CRA. That, sir, is very important to this committee, and I think we're going to need some explanation as to why. Unfortunately, it leads to a credibility issue. This committee has reflected that in some of its questioning.

I hope you understand that what's happened today is not acceptable.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Dinis, do you want to respond?

[Filipe Dinis]

I understand the need to provide the committee with proper responses, Mr. Chair, and we commit to doing that. I simply don't have all of the information on some of the questions that were presented today.

[The Chair, Conservative, James Rajotte]

Okay.

I have a few questions.

Ms. McLeod, did you have a brief one?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

I have one quick general question.

Mr. Szabo indicated surprise in terms of the fact that we have increased investigations. We have been studying tax havens right now and the whole issue around tax havens, and how having appropriate manpower and investigation pays off in actual spades in terms of recapturing some of that revenue loss. I was surprised when he expressed surprise about increased manpower in that area, when we clearly heard that we've increased manpower in that area.

Could you quickly respond to that piece? That is my only comment.

[Filipe Dinis]

Mr. Chair, as I indicated, there are two aspects to the investigations. One aspect is investigations of our internal employees and their not respecting the code of conduct. There, we have shifted resources to make sure that we are looking at the serious offences as opposed to the less serious ones. There has been a shift there.

In addition to that, there is always an increased focus on the audit activities and investigations on that front as well.