Finance Committee on Feb. 10th, 2009

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

I'm not sure what the additional IT information would be. It's not like you're giving a deduction for these tax-free savings accounts. It's not going to touch CRA policy at all. It's just a question of, again, I would assume, forms, is it not? What kind of IT information would you be—

[James Ralston]

I believe we also have to track, because there's a certain amount of eligibility, which if—

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

You don't sound too convincing with “I believe” and “I think”. We're having a hard time.

[James Ralston]

This is one of the measures where if you don't use your allotment in a particular year it carries forward for use in another year. So we need to be able to capture not only the information from the financial institutions, but we have to keep track of the individual taxpayer accounts in terms of how much available room they have for these kinds of contributions. That's the kind of thing.

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

So it's not just up to the financial institutions to do that.

[William Baker]

The financial institutions will be administering the vehicles for the investments, of course. They're all, as you know, actively advertising these as we speak.

But take the $5,000 in a given year. It's not required that the individual taxpayer do the entire $5,000 worth of business with a given financial institution. They may choose to work with several.

We are the place where it will all have to be reconciled to keep the active balances, to measure the outflows and the inflows, because as you know, if in a given year you take $3,000 out, you can put it back in the next year. So we have to keep the accounting of that.

I should add, if I might, that this falls outside the regular tax assessing system. So we actually have to create inside the agency a parallel process to allow us to keep track of all this.

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

Now that makes sense.

My next question is going to be that I don't think with $19.5 million you have enough. As you said, this is creating a whole new database and a whole new infrastructure in IT. I think this is just another one of those Conservative policies that's going to be a nightmare, consuming more money than it's actually going to benefit.

That said, I have a quick question on advertising. There's a lot of advertising that goes on. Why would you not have had a provision for the $6 million for tax filing season 2008? The $1.2 million I can probably understand with the public agency, but my concern is mainly with regard to the $6 million out of the $7.2 million, that annual reoccurrence where you're going to be advertising that people have to file their tax returns.

[William Baker]

It's true that just about every year there's some form of advertising around the tax-filing season. It changes every year, too, depending on the new tax measures that are introduced through the budget. So every year, as a matter of standard course—and I believe this is true for advertising across the Government of Canada—you're required to make a separate submission and get approval for that.

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

Wouldn't it already have been in the main estimates?

[James Ralston]

Maybe three years ago now there was a time when we did have an annual amount budgeted for advertising, and then the government changed the administration of advertising and centralized it. I think reference was made to that already when the finance people were here. So at that point in time an amount that was typically in our main estimates was transferred to the central fund of government, and now we must reapply for that each year to get a portion.

As Mr. Baker has mentioned, we will generally get our requests granted, but it isn't a guarantee and there have been years in which we haven't done advertising.

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

I guess the question at the end would be how much of that advertising money is to promote the Conservative government policies once again.

[William Baker]

The advertising that will be carried out tries to accomplish two things. One is to advise the public of the availability of particularly new tax measures--and we've had a lot of them in the last few years--so that they're aware of them.

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

But it probably costs you more money than taxpayers are actually saving.

[William Baker]

I wouldn't have an answer to that.

The other part is that we also--

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

I can help you with that. There's a high probability that that's what's happening here. Just for the fitness tax credit you're spending over $1 million to advertise.

[William Baker]

If I might add, we also use the advertising to try to reinforce to taxpayers the advantages of electronic filing, as well as inform them of the availability of our services in terms of information.

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

Okay, thanks.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Pacetti.

Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

Good day to all of you.

As part of your budget analysis, did you give any thought to improving the compensation system for CRA employees? I'm asking the question because the Shawinigan Tax Centre is located in my riding. Employees at the centre and perhaps others elsewhere in Quebec—that is, if there are others elsewhere—are encountering major problems getting paid. Some are waiting as much as 12 weeks before collecting a paycheque. This problem dates back to last year, when compensation services were centralized. It would appear the same problem has surfaced again. It affects a sizeable number of part-time workers.

Have you thought of a way to resolve this dilemma? Do you intend to revert to the old system where compensation services were decentralized? Or, do you intend to maintain the status quo, that is a centralized service that continues to cause problems, not only for CRA, but especially for its employees? The situation is ridiculous. Have any funds been budgeted to address this problem?

[William Baker]

This problem was not addressed in the budget because we have the resources within CRA to manage personnel. I'm well aware of the problem. In fact, I attended a briefing this morning on these problems, which primarily affect the Quebec region. We are currently doing an analysis to determine the cause of some of these problems. While not many people are affected, even one person who is not receiving a paycheque is one person too many.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

It may not seem to you that many people are affected, but in fact, several hundred people are affected.

[William Baker]

I understand, but out of a workforce of 44,000, we are not talking about a large number of people.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

But the fact is that they all work at the same location.

[William Baker]

Even if only 1 per cent of the workforce is affected, it's important to try and resolve these problems. Initially, our strategy was to review the situation and consider possible solutions, while keeping both of the country's compensation centres in operation. Clearly, that is the most efficient option.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Fine then. Moving on to another topic, you use the expression “functional currency“. How is this type of currency going to help taxpayers?