Thank you, Mr. Chair.
Thank you for the opportunity to continue our discussion. You've introduced people already, and they are people who can answer some of the more detailed questions that we talked about earlier.
I want to say that the protection of taxpayer information remains one of our highest priorities. If you look at our mission in the agency, it's to provide service to Canadians, fairness in the tax system through compliance and protection of information, so we take it very seriously.
In today's increasingly digital world, the rise in fraud and identity theft has become a global trend. We're not the only jurisdiction or the only organization that's facing it. Internationally, responses to these trends include the joint chiefs of global tax enforcement, J5, which the minister mentioned, convening a special working group targeting cybercrime. The agency, representing Canada, is an active member of the J5.
Despite the rigorous security controls already in place, the agency, like any organization, recognizes that it's not immune to these growing trends and acknowledges that privacy breaches and identity theft cause concern among those affected.
The agency does not publicly discuss tax schemes utilized by bad actors, to avoid inspiring other would-be fraudsters to follow suit. Nevertheless, it's important to note that a privacy breach does not necessarily mean that our systems have been compromised or that information has been extracted. In the vast majority of cases that we encounter, fraudsters access data external to the agency, attempting to exploit it by posing as real taxpayers, which we discussed in the earlier session.
That said, the agency has a multi-layered system of defences to identify, protect, detect and respond to threats like fraud, identity theft and tax schemes. We are successful in protecting hundreds of thousands of fraudulent attempts to gain personal and business taxpayer accounts.
To support transparency, we report all material privacy breaches to the Treasury Board of Canada Secretariat and the Office of the Privacy Commissioner of Canada. Admittedly, as we've discussed before, there have been some delays following the pandemic, but we do report them and consider ourselves to be very transparent in that regard.
We also report on privacy breaches at the end of each fiscal year in our “Annual Report to Parliament—The Administration of the Privacy Act”.
When fraud is suspected, the agency takes immediate precautionary measures on the taxpayer's account, such as blocking it to prevent transactions, and conducts in-depth reviews with the people involved.
Our identity protection service then takes over. This service is dedicated to both private and corporate clients. We offer an accessible, high-quality service to those affected by identity theft. When identity theft is reported, the agency offers credit protection and monitors the accounts of affected customers to prevent taxpayers from being victimized again.
In rare cases in which fraudulent funds are paid out, the agency takes every available enforcement action to return the funds to the Crown and to hold the offending parties accountable. This includes criminal investigations at our own operation, which could also be referred to the RCMP.
There is no silver bullet to protect against fraud or privacy breaches. That's why we have implemented these multi-layer safeguards, including multifactor authentication as a mandatory measure. This requires persons to enter a one-time password every time they access the agency's log-in services.
The agency also regularly performs security assessments such as vulnerability scanning, penetration testing and security risk assessments of the agency's digital services and systems. We regularly conduct routine checks to identify taxpayer credentials that may have been obtained by unauthorized external parties, and we take immediate steps to revoke these IDs to prevent them from being exploited by fraudsters.
In addition, we continually invest in security by enhancing our technologies, processes and controls to ensure the safety of taxpayer information. As fraudsters' tactics evolve, the agency adapts by remaining vigilant in its efforts to stay one step ahead.
Thank you, Mr. Chair.
We would be pleased to answer any questions from the committee.
