Evidence of meeting #4 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was advertising.
A recording is available from Parliament.
5:05 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
The responsibility for determining tax expenditures and the impact resides with the Department of Finance.
5:05 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
You're spending $30 million and you, the Revenue Agency, have no idea how much the foregone revenue is.
5:05 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
This particular program is new. The $19.5 million, which is what's included in the supplementary estimates, will allow us to get ready to administer the program. In a year or so from now we'll be in a position to know what the take-up is.
5:05 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
Every program in the government has a rough workup. They figure out how much it's going to cost, the foregone revenue, and things of that nature. I would have thought that you, as the head of the agency, would have been at least privy to the figures as to how much Revenue Canada will not see by virtue of this program.
5:05 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
Again, what you're talking about is a matter of tax policy.
5:05 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
With the declining interest rate--I don't know what other members get on their savings account. If I had one, I don't think I'd be getting too much--my guess is that it's about 1% or 2% return on your average savings account. That means you're going to need at least $3 billion worth of investment in your first year just to get a rough equivalent to what you're spending on your program.
In terms of your projections, how much money do you think people are actually going to put into this?
5:05 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
What we're setting up is the infrastructure to accept them. The Department of Finance may have some estimates in terms of what the take-up would be.
5:05 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
It's a rather unsatisfactory position for you to be in, Mr. Baker, to not know how much it's going to cost, to not know how much the government is going to forego in revenue, and to not know how many Canadians are going to use the program.
Wouldn't you think that's rather unsatisfactory?
5:05 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
I certainly could be accountable for the costs. In developing this estimate, we've taken on board the best assumptions that were available at the time. I don't have them all in front of me, obviously. What our traditional experiences are in administering--
5:05 p.m.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
There are assumptions, and presumably people had some pretty serious conversations in the setting up and design of this program. I wonder if you could share with the committee whatever notes, conversations, memos--whatever--there were in terms of your anticipated costs, your foregone revenue, the anticipated ongoing costs of the program. Surely those are all reasonable requests on the part of a committee.
5:05 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
The part that we can accommodate would be the costs associated with administering the program. We could not comment, because we're not in a position to, on the foregone revenue.
5:10 p.m.
Liberal
5:10 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
In terms of the information that went into the determination of the $19.5 million, that we may be able to provide to the committee, but I'll have to verify what the operating assumptions were.
5:10 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much, Mr. McKay.
Any information you have on this, Mr. Baker, we'd appreciate. Thank you.
We'll go now to Mr. Hawn.
5:10 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Thank you, Mr. Chair, and thank you, gentlemen, for being here.
I'd like to talk about the Canada student loans collection program a little bit, not to challenge what's happening, but basically for edification on my part, and perhaps the committee's part. That process of changing over from using private collection agencies to CRA is still in transition, is that correct?
5:10 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
That's correct.
5:10 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
My understanding is there are about 10 private agencies out there that had previously taken part of...you know, the part that CRA couldn't collect was turned over to them and they collected some percentage of that. Is that correct?
5:10 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
I'll have to verify, sir, the exact number of agencies. There were certainly several agencies involved, yes.
5:10 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
That was their job, that whatever CRA, for whatever reason, got tired of chasing or couldn't collect would be turned over to those agencies and they would process or prosecute those on behalf of CRA?
5:10 p.m.
Commissioner and Chief Executive Officer, Canada Revenue Agency
The use of private collection agencies goes back to the time when HRSDC administered...well, they still do have overall policy responsibility for the student loan program. What has been transferred to us is the collection responsibility.
When it was originally transferred we adopted the operating practice of HRSDC, which was a combination of our own collection activities plus the use of private collection agencies. We determined, as Mr. Ralston explained, that we can do this for less cost to government by using our own infrastructure of collection officers.
5:10 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Do you have a dollar figure that this would save overall--just a rough order of magnitude?
5:10 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
In the budget of 2008, there was a table presented of the expected strategic review savings, and we projected $6 million in 2008-09, $13 million in 2009-10, and $20.4 million in 2010-11.
5:10 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
With CRA doing the collecting, do you have any idea how much CRA was able to collect before, a percentage of delinquent loans? Was it 80%, 85%? How much was turned over previously to the private collection agencies? Do you have any idea?