Evidence of meeting #3 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was money.
A recording is available from Parliament.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
I will quickly address the issue of cigarette smuggling in the country.
I regularly receive the media review from your department, the Canada Revenue Agency, and I read about the seizures that are made. According to my information, it looks like 40% of all cigarettes come from smuggling. Could you tell me how much revenue is lost because of these illegal cigarettes on the market and what action are you asking the government to take to rectify the situation?
Deputy Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Once again, unfortunately, we do not have that data with us today. We can certainly request the information from our program experts and send it to the committee.
Robert Carrier Bloc Alfred-Pellan, QC
Could that be provided to the committee afterwards, rather than having to appear again?
Conservative
The Chair Conservative James Rajotte
Absolutely; as a committee we can certainly make that request.
Thank you.
You have 30 seconds.
Conservative
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chair.
For my colleagues, this is a meeting on the supplementary estimates (C) for CRA. We have in the past had the CRA here for a meeting on CRA policy and their operations, all of that. A good suggestion would be to have them back at a specific meeting to talk about policy issues and things along those lines. Monsieur Carrier's questions would be very appropriate at that point.
There isn't much here. You're asking for the $10 million and the deduction of the $3 million.
But I have another question for you. I'm going to question you from your actual presentation. It's a question based on why you want this money.
One of the issues Canada is facing concerns productivity. We spend $4.6 billion a year collecting taxes—that's what CRA does--and I want to know whether, in your view, these activities that we're spending money on are improving the productivity of CRA employees.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
The short answer is yes. That's a predictable answer, I appreciate, but I sincerely believe it is the case.
We're talking, as I said earlier, about a back office function. This fact notwithstanding, these back office functions are required to do the direct program delivery. One of the things we've observed is that it's taking a considerable amount of time to process some of our transactions, particularly now.... I know we're not talking about them today, but for the first time in the main estimates we've moved to a capital vote as well as just a single operating vote. This is presenting another set of tracking and recording issues for us.
What you're looking at today, the improvements we're going to be making through this, will certainly allow us to automate that whole process. We're going to be able to automate the whole process of funds approvals. I wouldn't want to say that this is generating a one-and-a-half per cent productivity improvement or anything of that ilk, but it is the essence of what this is here for: better stewardship and a more productive, efficient delivery of our administrative services.
Conservative
Mike Wallace Conservative Burlington, ON
Okay.
I have another financial question for you. I'm also on the industry committee, and I have a number of questions about.... Industry wasn't too bad, but pages 71 to 84 in this book, I think, show transfers from one department or organization to another, as in, well, we're not using the money over here, so we're going to use it over there.
My first question is whether CRA is entitled to those similar.... Because you're a sort of third party, in a sense, are you treated the same, from an accounting point of view? If there's a program that's government-wide, and somebody....
I'll use a wild example: contaminated sites. There are contaminated sites in natural resources, in corrections, in all kinds of departments. They seem to be able to transfer the money at the end of the year based on how much they're going to get done.
Are you entitled to that same sort of approach, or are you treated separately because you're CRA?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
We are both entitled and obliged on those approaches. Sometimes we're winners and sometimes we're losers from those approaches. That is to say, we are occasionally the transferor and sometimes the tranferee.
This particular case, as you've noted, was a Treasury Board initiative in the financial world, and we were entitled to make a request for some of those funds. In this case, the Treasury Board agreed that our business case was worth investing some money in.
Conservative
Mike Wallace Conservative Burlington, ON
This leads me to my next question. I'm interested in the actual transfer decision. I'll use the contaminated site one for an example. There are seven departments involved. Some are gaining and some are losing.
Who actually makes the request, and who makes the decision that they're not spending the money this year and will send it over to CRA? How does that actually work?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
In the majority of cases, it's a group decision, a coordinated decision, a consensual decision. That certainly describes the relationship between us and CBSA, which is a little unique. Another example on the other side was either in supplementary estimates (B) or supplementary estimates (A) of this year; we provided a small amount of money, $100,000, to the Treasury Board Secretariat because they wanted to run a horizontal national managers' community program--
Conservative
Mike Wallace Conservative Burlington, ON
That's right; there was some transfer from Industry on that.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
--and we had to transfer money over to the Treasury Board for that. That was a little...no doubt, when you get that call from Treasury Board, you can feel the hand on your arm, twisting it a little bit.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
We could say no, and we have said no in some cases. If we feel we have value....
For example, in the example I mentioned, our managers are going to be participating in those fora as well, so there's value for us. Because of our board of management structure in particular, we have to ensure that as we're contributing money to another department, there's value back to the Canada Revenue Agency.
Conservative
Mike Wallace Conservative Burlington, ON
Right.
With reference to budgets, I'm assuming, because of the way budgets have operated over the last number of years in terms of changes, that this affects the size of your supplementary estimates (A) and supplementary estimates (B) considerably. Would you agree?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
That's correct, yes.
Conservative
Mike Wallace Conservative Burlington, ON
I'm sure you haven't thought about it, but in theory, if budgets implemented in March were introduced in the fall, would that help in terms of reducing the amounts of supplementary estimates (A) and supplementary estimates (B)?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
That's probably not early enough, because in October the main estimates start locking in, so you'd have to have the budget in, unfortunately, much....
Take the budget that just came down on March 4. We're now working up what we see as the cost of implementing that budget. We'd be expecting to see a Treasury Board submission in May or June, so you can see that from budget day to when we know what the hard numbers are is at least two or three months.
Conservative
NDP
Thomas Mulcair NDP Outremont, QC
Thank you, Mr. Chair. Mr. O'Connor, Mr. Dinis, welcome. I want to start off with a point raised by my colleague, Mr. Wallace. He said:
“There isn't much here.”
In French you would say “y'a rien là”. It's only $10 million. I would venture to say that when one considers $10 million to be of no consequence, that's how $50 billion deficits accumulate.
Let me take a slightly different approach. In short, you are talking about a net increase of $6.3 million. You are taking $10 million from the Treasury to complete IT projects. You are obliged to allocate $4 million in total. We're talking about $6 million net out of a budget of $4.6 billion. That means that you have $4,659,000,000. Let's take that amount and treat it like actual dollars, so that people can understand us.
Take, for example, someone who has a budget of $4,659. He needs to come up with $6. How is it impossible for you to come up with an additional $6 million, when you have a $4.6 billion budget? Has the Public Service come to this? Mr. O'Connor, did I not hear you say that it bothered you when you were asked to provide $100,000 from the Treasury?
I worked for many years in government. I headed up a government agency. I served for six years as president of the Office des professions du Québec, and as minister for several years. Based on my experience, there is always a way to get money from inside sources. It intrigues me that this approach, that is always requesting more money, is considered normal. Granted, as Mr. Wallace points out, it's only $6 million, after all. However, that's $6 million from taxpayers' pockets.
Let me phrase my question differently. Is there some way for you to find $6 million in your $4.659 billion budget?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
The answer, again briefly, would be yes, but at what cost? We've been recently reviewed and evaluated by the Office of the Auditor General with respect to our investment decision-making. That audit report came out extremely positive, complimenting the agency on the rigour in the information system it uses to determine its investments. That process allows us to fund a considerable number of the investment pressures we have on the tax side, such as the T1, the T3, the T2. The problem we have now is that one of the objectives of this program from the Treasury Board Secretariat was effectively to accelerate the process.
Would we have done this without the money? Yes, eventually, but not now. It wasn't high enough on our priority list, given the other needs we have, to allow this to happen. Part of what the Treasury Board had interest in were broader government-wide objectives. It is an interest we share, but in fact some of those benefits apply more widely across government than to ourselves.
As you correctly point out, it's $6 million in a $4.6 billion budget. As a finance officer it would be foolish of me to say we couldn't find it, but we would have had to displace something else. That part is for certain.