Finance Committee on March 1st, 2011

[Filipe Dinis]

Yes. As it relates to that non-revenue aspect on the fiscal framework, in terms of the administration of the programs that we have in place in the agency, as you mentioned, whether it's the number of audits, or our ability to collect, etc., we do undertake a sort of forecasting and look forward in terms of our own operations. Yes, we do take into account the economic conditions of the day and factor that into our estimates.

[Paul Szabo, Liberal, Mississauga South, ON]

So what would happen with something like the voluntary disclosure program when times are good, versus times that are not so good for personal finance?

[Filipe Dinis]

Unfortunately, specifically related to how the voluntary disclosure program forecasts or looks at their planning aspect, I don't have that information, but I can provide it to the committee.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay. How about in terms of the number of investigations when the economy is robust or when it's not robust? What are your presumptions or historical experience with regard to the number of investigations that would have to be triggered?

[Filipe Dinis]

Again, in terms of the program itself, I would not want to share with the committee any information that's not accurate. I would have to get back to you in terms of the investigations, etc., and do the program experts see a shift in terms of the numbers.... I don't have those with me.

[Paul Szabo, Liberal, Mississauga South, ON]

Let's say generally. You must have some idea of that when the economy is in good condition versus a down economy. What does that do to the level of activity at CRA?

[Filipe Dinis]

Definitely in certain programs, probably there is a slight adjustment that is seen in terms of, for example, our collections activities. We need to continue to put emphasis on those and, in relation to that, the willingness to pay the fair share of one's assessment up front, so there's probably additional effort on the back end if you will on the collection side.

[Paul Szabo, Liberal, Mississauga South, ON]

What has been the experience with regard to whistleblowers?

[Filipe Dinis]

I don't have that information. I'd have to come back to the committee with that. That's a specific program within the agency and unfortunately I don't have that information.

[Paul Szabo, Liberal, Mississauga South, ON]

But it's related to investigations, which is related to your cost of operation and your human resources requirements. You need to have a sense, no?

[Filipe Dinis]

I don't have a sense of the volume on the whistleblower program, to be honest with you.

[Paul Szabo, Liberal, Mississauga South, ON]

All right. This is my last question, Mr. Chairman.

Last week, I had a gentleman come to me. It was an HST alleged fraud of $7 million. It involved two national corporations and someone who positioned himself as a broker in between. All of the information, stacks of information, were provided to CRA. There has been no response whatsoever. I can only assume that CRA has a policy with regard to confirming or denying receipt of information and whether anything is going on. Do you know what that is?

[Filipe Dinis]

There is likely a policy in terms of the procedures that need to be followed in a situation like that. Again, as the non-legal person within the CRA in my role, I don't have an answer for you with respect to what that policy is.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay. You have undertaken, or indicated you could...there are two or three things that I'd ask if you would please respond to, and maybe the clerk can confirm to the witness the questions that he could get.... I would be very interested to know, because we should have an understanding of, generally, when the economy moves through the spectrum of its performance, what the impacts are on CRA's activities and its human resources requirements. It's pretty critical.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Szabo.

Mr. Wallace, briefly, and then Ms. Glover.

[Mike Wallace, Conservative, Burlington, ON]

I need to apologize to my colleagues who are here at the table. I was looking at pages 68 to 81 for transfers. There actually is a page 66 and it does show the transfer, so it is in the book. Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Wallace, for that clarification.

Ms. Glover has the floor.

[Shelly Glover, Conservative, Saint Boniface, MB]

I think it's my turn.

I want to welcome you here again.

I do want to turn to page 66, if you wouldn't mind. I would like to understand the difference between what's in the estimate on the estimate sheet when we refer to the horizontal item, and what's referred to on page 66, the $63 million. I want to understand why the estimates indicate $57 million. I understand part of it is capital and part of it is the $54 million we've been referring to continually, but that doesn't reflect the $63 million that's on page 66. I'm just wondering what the difference is.

[Filipe Dinis]

Mr. Chair, the clarification on that particular page relates to the total amount. The $63 million is the total amount that is required for the implementation of the harmonized sales tax in Ontario and B.C. for the three departments/agencies involved. There is the Canada Revenue Agency, which is the $57 million, which is the one that's in our supplementary estimates (C), and I would suspect that under the Canada Border Services Agency and Statistics Canada, in their supplementary estimates (C), you would see an equivalent, those same amounts reflected in their particular supplementary estimates (C).

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you. I know that you referred to the Canada Border Services Agency earlier.

If we go back to the capital, the $3 million, I'd like to understand, because you said it was recurring. I'm curious and will follow up on Mr. Pacetti's question:what is that recurring capital expense?

[Richard Case]

We have yet to establish the requirement for future years with respect to the capital vote. That's something that will be discussed in the context of our 2011-12 main estimates and in future years. That full amount may in fact not be recurring. There is a significant amount of systems modification that had to take place this year in order to accommodate the new HST in Ontario and B.C. Those are capital types of expenditures because of their magnitude, and therefore—

[Shelly Glover, Conservative, Saint Boniface, MB]

I'm sorry, but I want to interrupt because I don't have much time. I'm a really direct woman, and I apologize for being that way, but if you're asking us to pay for something, I want to know what it's for. If we don't have an assessment of what it's needed for, then I frankly don't really want to put money into something when I'm not sure what it is. Can you tell me what it's for?

[Richard Case]

Yes. It is for our computer systems. We have a number of computer systems that need to be modified in order to accommodate the changes and the complexities related to the HST. Those are the investments that, under accounting policy, need to be capitalized and therefore reflected in that particular vote.

[Shelly Glover, Conservative, Saint Boniface, MB]

But what I'm not understanding is.... I'm with Mr. Pacetti on this. Computers are a one-time shot. Are you saying that you need software every year to the tune of $3 million, that it is a recurring expense?

[Richard Case]

We have not established our requirement for future years yet. This $3 million is just for 2010-11. That's the actual expenditure in 2010-11. That is the genuine capital investment that we have to make in 2010-11. It doesn't represent the ongoing amount.