Evidence of meeting #63 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.
A recording is available from Parliament.
4:20 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
It probably includes the amounts in appeals right now.
4:20 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Okay, so that's including the....
But when I see the trend over time, we've gone from $18 billion in unpaid taxes in 2006 to $29 billion six years later in undisputed and unpaid taxes. Now you're suggesting it's about $32 billion, two years later. Explain to me why that's not a worrisome trend.
4:20 p.m.
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
It is a trend that we're managing closely; however, I would add that we've taken on responsibility for the provincial sales tax from the Government of Ontario and we've taken on responsibility for corporate tax from the Government of Ontario. Generally, revenues are up, so there is a driver in terms of the overall revenue base going up.
4:20 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Now my colleagues are going to say that it's Kathleen Wynne's fault, and that's unfortunate.
But can you understand the broader perspective? I understand taking in Ontario, but we've almost doubled the unpaid and undisputed taxes owed to the Government of Canada in just eight years since the Conservatives took over. That's a spike. Are you expecting this to go down? Are we going to return to those heady days of being owed only $18 billion in undisputed and unpaid taxes?
4:20 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
There are a lot of efforts going on in collections.
What I can tell you is that the increase is in line with the increase in revenues. Just last year in 2013-14 we actually resolved $46 billion of the receivables envelope. If you would take a look at the portfolio from an aging perspective, those accounts over five years old represent about 15% and our target is about 18%, which we feel is acceptable.
We were benchmarked a couple of years ago through an international review done by Capgemini, against 10 other countries and we came up in the top two countries in many areas. For example, we have the lowest cost of collecting each dollar of debt. We collect the most debt as a percentage of our total tax revenues.
4:20 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Huppé.
I want to switch topics just a little bit around the $13.4 million spent on auditing charities. Is there a working definition that you can give to the committee of what “political activity” is, which the CRA is using?
4:20 p.m.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Yes, there is.
Political activities are those that seek to:
...further the interests of a particular political party; or support a political party or candidate for public office; or retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.
You'll find that information on the CRA charities website.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Has that definition changed at all over the last five years or is that consistent?
4:25 p.m.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
No, it has not.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Does the CRA study tax compliance costs, the tax burden for compliance in Canada more broadly speaking? Do you make any assessment of this?
4:25 p.m.
Deputy Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
We certainly make use of external assessments and take note. There have been some positive external reports around the tax burden on business, particularly with those measures around harmonization in Ontario, for example.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I have two last questions.
Quickly, have you done any assessment on the compliance burden on those charities that you've been auditing?
4:25 p.m.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Not specifically.
4:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Okay.
The last question, there was a corruption issue that came up with CRA when a $400,000 cheque was delivered to a Mafia leader who owed us $1.5 million. The minister at the time said that there would be an internal investigation. Do we know the status of this investigation, and will the results of it be made public?
4:25 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
They actually were, last December. The results of the investigations were published.
4:25 p.m.
NDP
4:25 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
We've looked at the observations. We made some modifications concerning our processes and made sure we had good communication.
It was basically human error, not following proper processes, that led to the cheque being released. We obviously took a look to make sure that we have enough rigour in our processes to ensure that these things would not happen again.
4:25 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
Mr. Huppé, I would like just one clarification. You mentioned an 18% figure. That's 18% of gross revenues, is that correct?
4:25 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
If you take a look at our overall receivables portfolio—what we could work on, the $33 billion that I was referring to—15% of our accounts are over five years. The target that we set for ourselves in the agency is that we want to make sure we manage the portfolio such that there is never more than 18% of our receivables that are over five years.
4:25 p.m.
Conservative
The Chair Conservative James Rajotte
Okay. I think the committee would find anything further on that topic of interest, if you want to provide anything further.
Thank you.
We'll go in the final round to Mr. Van Kesteren, please.
4:25 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Who would think that revenue would be such a fascinating subject?
4:25 p.m.
A voice
What's wrong with revenue? I like revenue.
4:25 p.m.
Some hon. members
Oh, oh!
4:25 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
What do you deem as an acceptable loss rate? If you have 18% on the books, what do you write off? In business we used to write off whatever the bad debts were.
What is a bad debt? What is acceptable?
4:25 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
I don't have the exact amount that would be acceptable as a percentage. We have very clear directives in the government as to what we can write off.