Finance Committee on March 27th, 2007

[William Baker]

The outreach program is still in its early stages, and in fact, we're seeking money through the main estimates to expand that.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Is this the first year in which they'll have to comply with the new rules, or is it the second?

[William Baker]

The changes announced under charities regulatory reform were in the 2004 budget.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So that would be the 2005 and 2006 cycles, so this would be the second year.

[William Baker]

That's right. It should be, I think, the second year, Mr. Chair. I could confirm that.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Is there a pattern of any egregious anomalies that have resulted in the first year's filings?

[William Baker]

I'm not aware of any pattern. There are and there have always been certain charities that run into difficulty. As I said, we work with the charity to try to bring them onside.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I agree with your comment that a lot of these charities are not run by sophisticated people, or if they are sophisticated people, they are doing it on volunteer time. And there is a cost-benefit analysis that goes with this sort of thing. People join charities to do good work; they don't join charities to spend their evenings trying to comply with absurd rules from Revenue Canada.

[The Chair, Conservative, Brian Pallister]

We'll continue now with Madame Ablonczy.

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

Thank you, Mr. Chairman.

My colleagues have covered a lot of ground. You said in your remarks that CRA's 2007-08 main estimates are seeking an increase of some 4.7%. I wonder if you could tell us how that would relate to increases in previous years.

[William Baker]

With the permission of the chair, I'm going to ask Mr. Ralston to talk about previous years, please.

[James Ralston]

What I could say is that typically, year over year, changes are somewhat unique. There are some common features. If collective agreements have provided for salary and wage increases, for example, those will be reflected. There will be, however, a lot of items, as we talked about, that are reflective of budgetary changes that new measures need to be provided for. That is a big determinant of the level of activity from one year to the next, and it would just depend on how much we've been impacted in those cases. Certainly, the changes this year and in the last couple of years have been heavily influenced by reduction measures--the expenditure review, procurement reform, and things of that nature--which, as I say, tend to dampen increases. It's very hard to generalize.

[William Baker]

Perhaps I might add to this, Mr. Chair. My apologies, that's a fair question, and I should have been able to give you the year over year. We'd be pleased to provide that to the committee.

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

I think that would be helpful. I do note that two-thirds of what you're asking for today is with reference to collective agreements--wage settlements.

The only other question I have is whether these estimates include hiring more staff, and if so, how many.

[William Baker]

When you look at what's in the increase areas, the only area I can identify where there would be some additional staff is that there is an amount of $18.5 million related to the ongoing implementation of previous budgetary measures. Some portion of that would be related to salaries.

To put this in perspective, for the agency as a whole, around 76% of our total budget is related to salaries, and about 81% of the operating part of our budget is related to salaries. One could reasonably assume--and again I could give you more precision--when we have to increase our level of effort to administer a new tax or greater increased audit activities or whatever, on average 75% or 80% will be directed toward staff.

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

Okay. That's helpful.

Thank you, Mr. Chair.

[The Chair, Conservative, Brian Pallister]

Thank you very much.

We'll conclude with Mr. Pacetti for a couple of brief questions.

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

Thank you, Mr. Chair.

Mr. Baker, if I compare the main estimates for this year to the total estimates after the supplementary estimates, the total for 2006-07 was $3.467 billion. So this year you're asking for $3.3 billion. Shouldn't they be looking at the $3.4 billion versus the $3.3 billion, instead of the $3.2 billion?

[William Baker]

Mr. Chair, I will ask Mr. Ralston to respond with your permission.

[James Ralston]

It's because of the remark I made earlier, that the increases that are due to supplementary estimates tend to affect only that year and that year only. They don't roll over automatically. So the end number, if you will, after supplementary estimates, doesn't automatically become the new opening number.

So that's why we tend to focus on—

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

No, I understand, but nothing in the $35 million is recurring from the supplementary estimates?

[James Ralston]

Very little of it, in point of fact, is reflected in the mains, but as I said in my earlier remark—

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

It will just be reflected in the next supplementary.

[James Ralston]

In the next supplementary, and the next mains after that.

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

My final quick question is this. In your opening remarks, Mr. Baker, in one of your last bullet points you say “an increase of $18 million for children's special allowance for statutory payment”. If I do the calculation, $21 a month for 65,000 recipients for 12 months, that means you're going to pay out $16 million for something that costs $18 million.