Evidence of meeting #2 for Finance in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
Acting Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
All I can say is certainly we would be working with CFIB and others to do whatever we can to minimize whatever burden it would be on the private sector.
Conservative
Garth Turner Conservative Halton, ON
Do we have a clear message from you today, though, that the costs are deductible?
Acting Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Yes, it's a legitimate business expense to accommodate this change.
Conservative
Garth Turner Conservative Halton, ON
I want to see if we can send a message out to our small-business community here.
So all costs would be deductible. If I have to replace my cash registers because my cash registers are not programmable, is the cost of my new equipment going to be 100% tax-deductible?
Acting Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
You could probably make that decision with or without the GST. If you felt you needed to buy a cash register in order to run your business, then you could do that now, but certainly you would be able to do it as part of the GST conversion as well. There are no special provisions because of the GST change, so if it's allowable now, it will be allowable on July 1.
Conservative
Garth Turner Conservative Halton, ON
So if I'm running a Future Shop and I have to reprint flyers, or if I'm Mattamy Homes and I have to reprint my sales brochures because of the change, all of this is a legitimate business expense. So in essence, compliance costs should be zero.
Acting Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
I think most small businesses would argue that there are certainly costs in terms of their time and effort--diverted time and so on. That is a cost to them. It may not be a financial cost, but it's certainly a cost, and there's no dollar compensation for that, of course.
Conservative
Garth Turner Conservative Halton, ON
That's very interesting. I think that's a great message to send, that the compliance costs for the GST are basically zero.
Thank you very much.
Conservative
NDP
David Christopherson NDP Hamilton Centre, ON
Thank you very much, Chair.
Thank you all, again.
I neglected this the first time, but since this is my first public interaction with the agency as the critic for the New Democratic caucus, the first thing I want to say is that I and the caucus have great respect for the amount of work you do and the kind of work and the need for precision. When you compare our collection system to those around the world, many would give their right arm to have the problems we have. So I want to acknowledge that, and I look forward to working with you.
Having said that, going back to my role as the critic, I do want to take on this notion again that less is more, because I spent a lot of years in the Ontario legislature listening to that very argument and watching the quality of life and services and programs in Ontario fall further and further and further. We're cutting services here; there's no other way to describe it.
I do have to say I may need a bit of clarification. Did I understand, Mr. Dorais, that you suggested that maybe this wasn't being fully implemented? You said something about the cash policy, about no longer accepting cash, then you said something else about the rest of the service cuts. But I have to confess I didn't hear it all. Are the inquiry counters being closed down as originally planned, or are there any changes to that?
Commissioner, Canada Revenue Agency
In our view, they're not cuts in services. We modified the way we give service to the public. We're redirecting some taxpayers--the taxpayer who wants to pay cash is being redirected to banking institutions. When taxpayers have simple questions--for example, they want a copy of a certain form--they will be able to download the form at any of the Service Canada agencies or any of our offices through the use of a terminal.
What we are doing is increasing the level of service to people who have to speak to someone because they have a complex issue or they have special needs, and we're providing the facilities for that.
NDP
David Christopherson NDP Hamilton Centre, ON
Thank you.
I don't want to be rude, but my time is tight.
The answer to my question is no, the change is going through as proposed. Herein lies my difficulty, because in my estimation and certainly in that of my constituents in downtown Hamilton, this is still a cut in service. They now have that opportunity. It's a right they have to go in and ask something and get an answer, and that's not going to be there in the future.
It's easy to say, well, go online. That's not so easy for an awful lot of people who aren't familiar.... There are still an awful lot of people living in poverty who don't have the technology in their homes that many people take for granted. For seniors, it's not necessarily their first choice to do something as important as their personal taxes, but I'm also thinking about new immigrants. Every government, every party, talks about the importance of assisting new immigrants to settle into our communities and to become integrated, and information is one of the most important things they need. So it seems to me that this is counterproductive to that. We ought to be making government services as user friendly as possible, particularly for people who don't understand the lingo, who maybe don't understand the technology, or who have various other disabilities.
It is not only that. While I have a moment, I want to get on the record that it is clear that in a system like this the more you can get things right at the front end, in terms of the input end, the less money it's going to cost the agency to process, to make changes or revisions. It seems to me that this is all counterproductive and is an exercise in meeting an artificially declared, bottom-line cut.
In your estimation or the agency's estimation, this may be the lesser of all evils. That doesn't make it any less evil in terms of it being a service cut. It is something that Canadians had, and the government is taking it away. I see this as a huge problem, particularly for the segments of our society that I've outlined.
I'll give you a chance to respond to that, sir.
Commissioner, Canada Revenue Agency
Mr. Chair, in fact the member and the agency--
Conservative
Diane Ablonczy Conservative Calgary Nose Hill, AB
On a point of order, Mr. Chairman, I think it's not fair to ask the officials to comment on the nature of evil, because they would have had no experience of it personally.
Conservative
The Chair Conservative Brian Pallister
Okay. Thank you for that.
It is not a point of order, though, so we'll go back to Mr. Dorais.
Your response, sir.
Commissioner, Canada Revenue Agency
I was about to say, Mr. Chair, that the agency and the member do not disagree at all, and the example of new immigrants is a good one. Today, as we speak, a new immigrant who, let's say, has an issue of language, because it's difficult to understand, walks into an office and nobody speaks the language. If he can make an appointment, maybe we can do something to accommodate the new immigrant and have someone who speaks the language, and we'll be able to give better service. That's the whole point of the exercise.
Conservative
The Chair Conservative Brian Pallister
I'll just use my prerogative here and add a couple of quick questions for you.
Just for clarification, is it correct, as you said earlier, that $650 million goes to assessment of non-filers each year?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
What I said was, out of the total agency expenditures, we allocate those expenditures across our operating programs, and that would include an attribution of a certain amount of “overhead costs”. So the percentage of that grand total that goes to a program that we've referred to as filing and remittance compliance is $615 million. That represents 19% of--
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
It is $615 million.
Conservative
The Chair Conservative Brian Pallister
Just for clarification, the reporting compliance section is $1.1 billiion, you said?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Yes. It is $1.097 billion, to be exact.
Conservative
The Chair Conservative Brian Pallister
So it is fair to point out that you spend half as much assessing non-filers as you do assessing those who file. You spend twice as much money evaluating the compliance of those who file as you do those who did not. Is that correct?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Perhaps just to complete the picture, if I may, in addition to the two programs I mentioned, we have a program called assessment of returns and payments processing. The cost allocated to that program is $758 million, 23% of the total. We have a program that addresses client assistance, and there's a total of $310 million attributed to that, 10% of the total. We have a total of $319 million that goes to our benefit programs, for 10% of the total. Finally, we have $129 million that goes to our appeals program, and that represents 4% of the total.
Again, just to repeat, these figures have overhead costs allocated to the front-end programs, if you will.
Conservative
The Chair Conservative Brian Pallister
Thank you.
My final question was for you, Mr. Dorais. In your introductory remarks, you referenced that the agency collected over $300 billion in revenue at a cost of slightly more than one cent for every dollar of revenue. What assurance could you give the committee that this price is competitive for a tax collection agency in the world today?