Finance Committee on Nov. 15th, 2007

[James Ralston]

Yes, it certainly could happen. It would depend on the nature of the item, but many of these items do reflect the cost for computer programmers to reprogram our systems.

There are certain areas where—perhaps, the earlier question about interprovincial tax avoidance might be a good one—maybe it would mean that we would increase the number of auditors we have available to devote attention to that kind of activity. There certainly is that element. A portion of this money will go to salary costs.

[Mike Wallace, Conservative, Burlington, ON]

I haven't seen any major increases; you're managing with the same number of people, basically. My question is, have there been any spikes in it in the last couple of years?

[James Ralston]

Certainly, given the size of our base budget--and this represents a fairly small increment—it wouldn't be a noticeable change in our staff complement as a result of this.

[Mike Wallace, Conservative, Burlington, ON]

I notice you're responsible for the department for any GST rebates, for example, and so on and so forth, through the tax system. How does the 1% decrease that we've announced for January affect things?

[James Ralston]

Again, it's similar to what I've just described. There would be a certain amount of effort required to just reprogram systems. There would also be effort required to go in and change any publications that made reference to the old rates versus the new rates. We might need to provide information to our inquiries agents so that they would be able to deal with questions around the change.

To the extent that those kinds of preparations have a price tag, we have to seek the incremental funding for that.

[Mike Wallace, Conservative, Burlington, ON]

Based on previous experience, the performance indicators we used to use were reflected in the money we allocated, and we tried to meet those performance indicators. Again, performance indicators here are, in my view, old by the time we get to see them.

What are the expectations of the department in terms of...? Do you have performance indicators for how quickly you get back to it? If a tax return comes in on a certain day, how long...? What are you working toward? What's the goal?

[James Ralston]

Well, we--

[The Chair, Conservative, Rob Merrifield]

That will be the last question, so just carry on with a quick answer.

[James Ralston]

Again, when the finance folks were here, you made reference to the DPR and the RPP. We have our corporate business plan, which sets out our plans and also sets out a fairly large number of service standards, things like our goals for turnarounds on refunds or appeals or whatever. Then we report against our achievement in the annual report, which is a public document. But for management purposes we also track those very same measures on a more timely basis, quarter by quarter, to see if we're meeting the standards we've set for ourselves.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We have a couple of quick questions from Mr. Pacetti and then from Monsieur Bouchard.

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

Thank you, Mr. Chairman.

I just want to thank the witness. In the past, every time you've come before the committee and we have asked you for additional information, you have provided it to us. I want to put that on the record and thank you for that. It comes in quite quickly and is quite detailed. Thank you for that, and I hope you continue to do that. It helps our work a little bit.

I have just two quick questions. One is a follow-up to what Mr. Wallace was asking.

I pulled out, for example, the auditor's report and the comments regarding internal taxation. One of your comments.... I remember speaking about it when we had the review as well. We were looking to hire more professionals and expertise. Perhaps the money is not there. But do you not think there is any need for more money to get specialized staff? Is your budget sufficient?

[James Ralston]

In point of fact, in the 2007 budget, there was an amount given to us for increased enforcement activities. It was $15 million in 2007-08, and that's reflected as a portion of that $45 million item you noted already. Embedded in there is some for increased enforcement. Then for future years, the budget allowed $50 million per year. I think it was for three years. I can't recall how far into the future it goes.

What we have done is identify six different enforcement activities that we feel we would like to enhance, so we've apportioned that money within that. In part it will mean, in some cases, hiring additional staff to pursue that.

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

My last quick question would be on the second portion, under the transfers. You have a lot of transfers from Justice. I would assume that you already have enough internal attorneys or people to take care of these situations. When would you have to go outside your own department or organization? At what point do you say you can't handle this any more?

[James Ralston]

In this particular case, the transfers have to do.... I don't know if you are aware, but there have been some changes in the way the Department of Justice is being financed. Basically, we will now be expected to pay for legal services that we would otherwise receive free of charge, so to some extent this money is reflected as an increase in our budget to enable us to make those payments. But that's kind of a technicality related to the item in the subsets.

To get to your question, there is basically a section of the Department of Justice called tax law services. They work very closely with our appeals people and our enforcement people to handle the legal work related to income tax. It is a sizable contingent of lawyers that Justice devotes to that effort.

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

Has that always been there?

[James Ralston]

It always has been there, yes.

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

Okay, thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Monsieur Bouchard, the floor is yours.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman. Thank you for being with us today.

Deputy Commissioner, the Auditor General's Report makes reference to the fact that auditors working for the Canada Revenue Agency are well trained, and that everything seems to work well and be perfectly adequate. However, she makes an important point with respect to experienced auditors. Her report states that there is a lot of movement amongst staff, that many employees leave the Canada Revenue Agency and that training could be improved as regards experienced auditors.

So, my question is: has the Canada Revenue Agency made any assessment of the money the federal government could recover if it had more experienced auditors or auditors who are better trained or better able to comply with its own standards?

[James Ralston]

I referred earlier to the additional $15 million we're requesting in these supplementary estimates for auditors. We would have an idea based on historical patterns of what kind of additional revenue would be generated from having more auditors to do the work.

In terms of talking about the revenue impact of changing the level of experience or qualifications within our existing staff complement, to my knowledge we've not done any calculations of that sort.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

I would like to move on now to my second question, which is addressed to you, Deputy Commissioner.

I regularly hear it said in some regions of Quebec that you are cutting back your staff. For example, there is a Taxation Data Centre in my region of Saguenay—Lac-Saint-Jean. I am told that there have been cutbacks in staff, and I am hearing the same thing in other communities, such as Sherbrooke and Shawinigan. Moreover, certain services have been centralized in Ottawa or in larger cities. In addition, taxpayers, some of whom are in other ridings in Quebec—have told me about certain changes, such as the fact that taxpayers have to make an appointment in order to speak with an employee of the Canada Revenue Agency.

I assume that if this is occurring in a number of different regions in Quebec, it is likely to be occurring elsewhere in Canada as well. That suggests that the Canada Revenue Agency has a certain amount of flexibility. If there are cutbacks occurring in the regions, not only in Quebec but elsewhere as well in all likelihood, that means there is more money. So, I am surprised that you are asking for a Supplementary Budget.

I'd be interested in hearing your comments on that. Does that really give you any flexibility? Is there anything to be gained from cutting back your staff in certain regions—it is certainly the case in my area that there have been staff and even service cutbacks? If so, what is that money used for?

I invite your comments.

[James Ralston]

In terms of these supplementary estimates, the funds that are requested are very targeted to particular measures that emanate from the budget or other policy statements. As I indicated, we're trying to represent the additional costs to the agency of implementing those particular measures. They're not related to the kind of broader issue you've alluded to. These ones are very specific to identifiable policy initiatives.

In terms of your broader question, all I can say is that the agency is constantly trying to improve its operations. There may be staffing level adjustments from time to time. It's usually motivated by our need to try to optimize our budget around the many different activities we have to conduct.

WIth respect to specific kinds of operations, my position is basically that of the chief financial officer. I'm not really in the best position to talk about particular operational decisions. If you have a specific query, I can ask my operational colleagues to provide answers that we could get back to the committee with.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Thank you for the questions.

Thank you for coming in and answering those questions for the committee. We appreciate that very much.

With that, we will call this meeting adjourned.