Finance Committee on June 21st, 2006

[Michel Dorais]

We'll complete the question, Mr. Chairman.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Dorais.

We'll proceed with Mr. Pacetti.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chairman.

I have just a couple of quick questions, again.

The previous witnesses from the CGA indicated that they would like to see somebody come in and do the audits for GST, and then somebody else doing the corporate tax, and perhaps somebody else doing the payroll tax. I would tend to disagree, because I think once you have an audit and you're going to have that interference, you would want one type of auditor. But from what I understand, you've been flip-flopping in terms of whether you just....

My experience has also been with Quebec. There, the GST is administered by the Quebec government, so it's a different situation.

But what have your results been, and what is your preference? Do we go to one man or a team of people who go into a company? I'm talking about small business, not necessarily large corporations.

[Michel Dorais]

Frankly, I was a little surprised, too, with the comments, because what we hear from business is, “Please don't send us three auditors in the same year; just send us one auditor to audit everything.” In the discussion we have when we harmonize tax or when we implement tax agreements on behalf of a province, business usually thanks us, because we have one auditor who comes and audits everything. So our tendency has been to do that.

Before, sometimes we would send auditors to audit just one element of the business. We've tended to get away from that and send an auditor to audit the entire set of books, and that's it; it's over with. When it's finished, it's finished. Business seems to appreciate that a lot more.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I have another quick question.

The booklet we received this year is on what you've accomplished in the last five years, but you also have your corporate business plan. Would that be a template for what your goals are? Could we use that as a template in how we evaluate you in a year or two years?

We're just going to be extending the mandate of the CRA. There's no mandate in five years to relook or revisit this file. But we do have a mandate where you deposit the annual report with us and we can bring you here every year. Is this a template that we can evaluate you by?

It's signed by the chairman of the board of directors. So is this a good document that we can use?

[Michel Dorais]

The summary of the business plans and the performance report are two key documents.

Do you want to add something?

[James Ralston, Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency]

Actually, the requirement in the act, when we produce the annual report, is that the report is meant to make reference back to the corporation's plans. So when we produce our annual report, hopefully it should be evident how it relates back to the previous business plan for the same period.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

There is just one question that we brought to the Auditor General in terms of collections. When it comes to amounts outstanding for agencies like yours, like a tax collection agency, what is the normal period that an accounts receivable should be overdue? In some companies it's 30 or 60 days, but I would imagine in your case it would be a much longer period of time. At what point do you start looking at it not being collectible?

[Michel Dorais]

It's hard to put a time limit on this. Contrary to business, we cannot say we're not going to do business with you because you're not paying. Also, when an account is under appeal and sometimes goes to court, it stays in the collectible for sometimes years.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I thinking of the cycle. I don't think you can start collecting before an item is even a year old.

[Michel Dorais]

There are some rules on when we can start collecting.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

If somebody says 50% of the items that are outstanding are over a year old, I don't think you can panic over that. There should be a threshold where you do begin not to panic but at least to worry about the amount being collectible.

[Michel Dorais]

The member is right, and he is putting his finger on one of the weaknesses of our system. The current computer infrastructure that we have gives us the debt, but it doesn't necessarily give us the age of the debt. We do have people, for example, in the accounts receivable who paid today for the year 2004, but they haven't paid for 2005, so they stay as a debt. You have to pull the file to know which year corresponds to what debt. That's what we need to correct.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So that is not a goal for you?

[Michel Dorais]

No, it's not in there. It's in the AG's report; she put her finger on that. We agree with that, and we have plans to renew the system.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Merci.

[The Chair, Conservative, Brian Pallister]

Merci, monsieur Pacetti.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chairman, I'd just like to clarify something.

[The Chair, Conservative, Brian Pallister]

Yes, Madam Ablonczy, please.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

With this discussion for additional information, just to save you time and trouble, I was only interested in information with respect to misconduct involving treatment of taxpayers. However, I would point out that I really can't accept that there were only four people out of 40,000 who treated taxpayers at a level that would call for some sanctions. I just don't accept that. I really think you need to examine that more closely.

[The Chair, Conservative, Brian Pallister]

To be fair to Madame Gauvin, who responded to that question earlier, you indicated to the committee that there are earlier thresholds at which, whether locally...some not declared and not recordable by you, but other thresholds that you could report back to the committee on. Isn't that correct?

[Lysanne Gauvin]

That's correct.

[The Chair, Conservative, Brian Pallister]

We'll look forward to that information being given back to committee members.

I thank you very much for your presentation today, Monsieur Dorais. And to the team, we very much appreciate your being here. We'll invite you to retire from your seats, and we'll conclude very quickly with some business items.

[Michel Dorais]

Thank you, Mr. Chairman.

[The Chair, Conservative, Brian Pallister]

I would like to report back to the committee--and this will be very brief--in respect of some activities that we'll be undertaking to encourage Canadians to take part in during the pre-budget consultative process.

We're just waiting for final approval on the travel budget that we had put in. Expect that as forthcoming. I look forward to spending some time together in the fall with all committee members as we do our work both here and across the country.

Also, the website will have posted an invitation to all Canadians to participate by way of applying to be witnesses or by way of making submissions to our committee. As well, a letter will go out to each member of Parliament. All of our colleagues will receive this letter, which outlines our encouragement to them to encourage others to be part of the process. We'll distribute the town hall meeting kit that committee members have had a chance to look at. I'm also going to follow up with all whip's offices and caucus chairs to encourage them to do some follow-up in whatever way they deem appropriate so that we do genuinely reach out and get as many people involved as possible.

I will say this, I think it's been made very clear to me from committee members that we want input, but we want input to be focused on the topics that we've outlined. In the past I've noticed a tendency, too often repeated by some of our witnesses, to branch into a number of areas of pet concern to them, which are not necessarily within the mandate of this committee or within our ability to address.

I believe in the inventory management principle of garbage in, garbage out, and I don't want garbage to come to this committee and I don't want this committee's time to be wasted. I do understand that we need to reach out in a broad-based way. We're going to try to strike a balance of those two things. We're going to encourage as many as possible to submit and to be part of the process, but out of respect to you, my colleagues, we want those presentations and that input to be focused somewhat on the topics that are within our jurisdiction. So we're going to proceed in that way.

Mr. Savage, please.