Information & Ethics Committee on Nov. 21st, 2024

[Marc Lemieux]

—all of those that we had.

[Adam Chambers, Conservative, Simcoe North, ON]

I understand it's not your intention, but the result was that there was a miscommunication or a lack of communication between the CRA and the Privacy Commissioner. Is that a fair assessment, then?

[Marc Lemieux]

I don't know to what extent the Privacy Commissioner was not aware of when those breaches were reported by the OAG.

[Adam Chambers, Conservative, Simcoe North, ON]

That's fair. I'd like to move on.

With respect to the fraud, the GST schemes and the carousel schemes, when did the CRA first learn that this was a serious issue—not a date, but what year? Are we going back a couple of years? Is it just the last year? When did these schemes really come on your radar?

[Bob Hamilton]

The carousel schemes within the GST have been known in the GST community internationally for a number of years. On the severity of it, I'm not sure when it became—

[Adam Chambers, Conservative, Simcoe North, ON]

The question is, in previous years, has the CRA made any recommendations to the finance department to enact legislative changes to help prevent these schemes?

[Bob Hamilton]

We do two things—

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I have a point of order, Mr. Chair. I understand that you are very lenient, but I think that the tighter we can keep it, the better it is for this specific issue, and I would question relevance on this question.

[The Chair, Conservative, John Brassard]

Thank you for that.

Go ahead.

[Adam Chambers, Conservative, Simcoe North, ON]

GST carousel schemes are fraud. We're talking about fraud today. The question is, has the CRA made recommendations for legislative change to help combat these schemes? Have you spoken to the finance department about this?

[Bob Hamilton]

I can say that we have had discussions with our finance colleagues about this, because there are things that are done in other jurisdictions, but we also take responsibility ourselves.

[Adam Chambers, Conservative, Simcoe North, ON]

There has been no legislative fix for this, though, and we've known about it for multiple years.

[Bob Hamilton]

There has not been a legislative change.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

[Bob Hamilton]

What we have been doing is on the administrative side, trying to get in earlier to capture this—

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

In my final minute, I'll go back to these writeoffs that may be a result of fraud. Some of them are a result of fraud. There was a significant increase in the amount of corporate writeoffs, $4.9 billion in one year. You've previously disclosed the amounts. We talked about that today in terms of the largest amounts.

Do you think, as a matter of public interest, that we ought to consider amending section 241 to make public the names of corporations that receive very large tax writeoffs and that owe the Canadian public money?

[Bob Hamilton]

I don't have a view that I would express on that. Section 241 is in the law. That's a Ministry of Finance responsibility, but—

[Adam Chambers, Conservative, Simcoe North, ON]

That's right, but these writeoffs now are getting to serious levels: 11 corporate taxpayers wrote off over $1 billion. We don't know who those corporations are. As a matter of public interest, now that we're talking about real money, don't you think the public should know who these corporations are?

[Bob Hamilton]

Again, I don't really have a comment on that. We do our best to be as transparent as we can with what we have.

If you'd like, in a later questioning, perhaps Marc could outline a bit more about the writeoff process, but we concentrate on having a robust process to try to get debts collected.

[The Chair, Conservative, John Brassard]

Okay. Thank you.

Next is Mrs. Shanahan for five minutes.

Go ahead.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you, Chair.

I want to come back to the 31,000 cases and how that number evolved, because I was there at the public accounts committee. I don't remember specifically how everyone testified, but I remember that the real crux of the matter was why we had that sudden huge number of identity fraud cases emerging, obviously out of a very difficult time, COVID, and the fact that there were decisions made around doing a post-verification rather than a pre-verification. That was, of course, to make sure that Canadians had the money they needed to survive the lockdowns that we all needed to have to protect public health.

However, I can understand that put a huge pressure on the system. I know that in my own riding we came across cases where there was clearly identity theft, and bogus bank accounts were opened up. Because we're a small community, the banks were actually pretty good at recognizing the cases, and they froze the accounts. There were constituents who had not applied for COVID but who had COVID money in an account, in their name, and those accounts were frozen.

It was very interesting to see that there was the ability, there was some oversight, where possible, on that. I think the banks are very good at this. They recognize unusual activity in the opening of accounts and the use of accounts and so on, and certainly in any rapid closure of accounts and taking out all of the money.

I just looked, for fun, because we all get notices from the CRA, and someone was concerned that the onus is on the taxpayer to go and check their CRA account. I certainly recommend it to people, and I think as the apps become more user-friendly and so on, it's easier to do. However, just putting in “CRA”, I had a bunch of messages from them over the last year and a half, or whatever, that I had new mail that I should take a look at and check to see what it was. I appreciate that kind of service.

Now, maybe someone can give me a hint. Is there anything I should be looking for if it were a bogus message? We have certainly seen that kind of thing, and my constituents are very concerned about texts and so on that they receive that are clearly fraud.

[Marc Lemieux]

It's quite possible that some people will call saying that they are the agency. I would say, if you have a doubt, it's better not to divulge any information to those callers. If it happens—because sometimes we have to call taxpayers when we have identity theft—this is one of the exceptions where we would call someone.

If you don't feel good about that, if you have any doubts, don't take the call. Tell the person that you don't believe it's the CRA. If it's the agency, the person will explain to you the steps to validate that they are calling from there. They will give you a number. They will ask you to go on the website to find for yourself the 1-800 number that you should be calling. From there, someone will confirm to you that someone at CRA is trying to call you, and they could put you in contact with that person.

We have an identity protection service in the agency. There is a specific line for those cases. If you call the general inquiry line, when you listen to the message, you can press a number, and they will direct your call to the identity protection services. The wait there is quite short, and people will take care of your call.

If in doubt, call the agency. We are there, and we will be able to see if someone from CRA is really trying to reach you.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much for that, Mr. Lemieux. I have instructed my mother that, for anybody who's calling, asking her anything, she is to hang up that phone or not answer. She actually thwarted one of those grandparent schemes by doing that. What a tremendous relief it was.

[Marc Lemieux]

I would add that if you don't want to talk to someone from the CRA, they will send you a paper letter.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much.