Finance Committee on Feb. 10th, 2009

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

I have a final, final question.

Bill C-293 passed and received royal assent in May. Significant responsibility is appropriated to Finance as to how that bill is applied to official development assistance. Can you advise the committee as to what progress you've made in the thinking behind the application of Bill C-293?

[The Chair, Conservative, James Rajotte]

Very briefly.

[Jim Haley, Senior Advisor to the ADM, International Trade and Finance, Department of Finance]

Yes, we've completed a public consultation; it's a web-based consultation. We've received several responses. Essentially, the reporting to Parliament will be progressing according to the legislation.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. McKay, unfortunately, you're over time.

Mr. Wallace, you have about three minutes.

[Mike Wallace, Conservative, Burlington, ON]

I'll take one minute here. Thank you, Mr. Chair.

The one thing I kept reading over and over again—and I need to understand how it affects you and what I should be taking from it, if anything—is the changes to supplementary estimates. They call it major changes. I can't figure out why it's a major change.

They talk about the way it's stating things from permanent allocations from TB central votes to a column here that says “authorities to date”, and I think it used to be called “previous estimates” or something. Other than a bunch of changes in words, is that supposed to mean something to me as a member of Parliament reviewing these estimates? What is the actual change that has happened, and what is its effect to you as a department and to me as a member of Parliament?

[David Miller]

Beginning with this fiscal year, there were two votes established to allow for payments that normally flow on the basis of a central decision out to the departments and are eventually included in supplementary estimates. For reasons of clarity, these two votes were set up. Again, one deals with requirements through collective agreements, where when the new funds are allocated, parliamentarians will be able to say, “All right, how much did we put in a provision for, and how much is the actual result, the requirements in each of those departments?” They're there for clarity purposes to allow you to say, government-wide, the implications of those particular votes are distributed in this manner to all departments and agencies.

[Mike Wallace, Conservative, Burlington, ON]

Those votes are normally around HR issues. Is that...?

[David Miller]

Yes, and they're included in the Treasury Board Secretariat's estimates.

[Mike Wallace, Conservative, Burlington, ON]

So that's supposed to make it more clear for me where we're allocating human resource funds based on negotiations that have happened and results from that.

[David Miller]

Yes, the idea was to add clarity to those items. It actually affects every department as they go through. Again, departments aren't provided funds ahead of time to allow for collective agreements. It's a catch-up item.

The other vote is to allow departments to carry over up to 5% of their operating vote for purposes of good cash management. Again, it's a central vote, and all the details about the distribution are listed in the estimates.

[Mike Wallace, Conservative, Burlington, ON]

Are we expected to see supplementary estimates (C), or are we done?

[David Miller]

I believe there is a supplementary (C) that would normally be tabled in Parliament at the end of this month. Every other year there's been one, but I can't vouch for that.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Thank you for coming before us and presenting and answering our questions.

There were a number of items on which you agreed to respond to the members afterwards. If you could submit those to the clerk, we will ensure that all members of the committee get them.

Members, we will suspend for about two minutes, and then we'll have the Canada Revenue Agency people come to the table.

Thank you very much for your time here this afternoon.

[The Chair, Conservative, James Rajotte]

Okay, members, let's find our seats.

We'll resume this meeting to consider supplementary estimates (B) 2008-09.

We have an hour session with the Canada Revenue Agency.

We have Mr. William Baker, commissioner and chief executive officer; Mr. James Ralston, chief financial officer and assistant commissioner, Finance and Administration Branch; and Mr. Filipe Dinis, director general, resource management directorate, Finance and Administration Branch.

Mr. Baker, I understand that you have an opening statement of up to five minutes, and then we'll go to questions from members.

Please begin at any time.

[William Baker, Commissioner and Chief Executive Officer, Canada Revenue Agency]

Thank you, Mr. Chair.

First of all, I'd like to thank you for the opportunity to appear before the finance committee to discuss CRA's supplementary estimates (B) for 2008-09. I'm joined today by two of my colleagues. Jim Ralston is our chief financial officer and Filipe Dinis is our director general of resource management.

Mr. Chair, as you're aware, the CRA is responsible for the administration of federal and certain provincial and territorial tax programs as well as the delivery of a number of economic and social programs for the Government of Canada. In support of this mandate, the CRA supplementary estimates comprise a number of adjustments to the agency's spending authorities totalling some $450 million, which represents an 11.3% increase in the authorities granted to date.

With the inclusion of these supplementary estimates, the agency's authorities will amount to $4.442 billion for this fiscal year.

Two transfer payments account for $420.2 million, or 93%, of this increase. The first transfer payment is for $419 million and represents the forecasted 2008-09 statutory disbursements to provinces under the Softwood Lumber Act for net export charges related to the export of softwood lumber products to the United States. As members may be aware, the CRA has administrative responsibility for the Softwood Lumber Act.

The remaining transfer payment, amounting to $1.2 million, pertains to the forecast of payments to low-income families and low-income seniors under the Energy Costs Assistance Measures Act. This payment represents a $250 amount that is issued to each recipient.

The other funding adjustment being sought through these estimates is an amount of $22.7 million for tax policy and legislative measures introduced in both the 2007 and 2008 federal budgets. Specifically, the funding is required to implement two initiatives. One is the functional currency tax reporting initiative. This will cost us $3.2 million to get ready to accept returns and payments in currencies other than the Canadian dollar. The other is the tax-free savings account, which I'm sure members are familiar with. This amount is $19.5 million, which will go towards implementation and administration of this new savings vehicle.

Also being requested in these amounts is $7.2 million to cover our advertising programs. This amount is comprised of $6 million to fund the advertising campaign for the 2008 tax filing season, and $1.2 million, which represents funds we're going to receive from the Public Health Agency of Canada for the advertising related to the children's fitness tax credit.

Mr. Chair, you will note that we are reflecting a $0.3 million amount relating to the Wage Earner Protection Program which will be used by CRA to help ensure workers obtain timely payment of unpaid wages and earned unused vacation pay from employers who go into bankruptcy or receivership.

Finally, the remaining $0.4 million adjustments, which are included in CRA's Supplementary Estimates, pertain to transfers from CRA to other government organizations. So then, $0.2 million will be transferred to the Public Service Human Resources Management Agency of Canada in support of the National Managers' Community.

The remaining $0.2 million will be transferred to the Treasury Board Secretariat to support the activities that are essential to continue the implementation of the Public Service Modernization Act.

At this time, my officials and I will be most happy to respond to questions from committee members.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go now to Mr. Pacetti for seven minutes, please.

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

Thank you, Mr. Baker and Mr. Ralston, for appearing before the committee.

I have a quick question. On the detailed sheet we received here, $22.7 million is based on making adjustments for the functional currency tax reporting and the tax-free savings account. I can understand there being an adjustment for the functional currency tax reporting, but what is the $19.5 million for the tax-free savings account?

[William Baker]

Just generally, that's the new budget measure that was introduced last year. It's related to our expenses in the Canada Revenue Agency to gear up in terms of the administrative support to allow us to deliver that program--for instance, the ability to process the forms when they come in.

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

So that money, the $19.5 million, hasn't been spent yet.

[William Baker]

Some of it will have been spent in terms of readiness for the program. These are, of course, supplementary estimates for the current fiscal year, so this relates to expenditures that we have or will be incurring over the next while to support that budget measure.

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

You're going to need $19.5 million just to accumulate forms? There is no tax measure per se for the tax savings account. It will just be an administrative type of account that I think the brokerage companies or the banks will be managing. I don't see what CRA has to do, other than collect forms, I would imagine.

[James Ralston, Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency]

I think a large part of that will in fact be for the development of some IT applications that are related to this. As you pointed out, there will be significant reporting obligations placed on financial institutions—

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

I understand.

[James Ralston]

—so we need to be able to capture that information when it comes in.