Finance Committee on March 1st, 2011

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

Then it would be an extra.... So this $54 million would be recurring, and the $3 million would not be recurring.

[Filipe Dinis]

The $40 million is not recurring. This is the one that had been approved in the past. The $57 million is the amount for 2010-11, and in our main estimates that will be tabled shortly we will have the ongoing portion.

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

So the $54 million and the $3 million are a cumulative $57 million? Because if the $3 million is a capital expenditure, should that not be a one-time expenditure?

[Filipe Dinis]

There is an ongoing capital component as well, so out of the $57 million, $54 million is operating and $3 million is capital. In our main estimates, we'll outline the funding for the other years, and there will also be a division between operating and capital. That's how we show our budgets.

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

Okay. Here's my question. Finance is going to negotiate or legislate certain policy and it's up to CRA to implement it or administer it. For the last couple of years since the Conservatives have been in power, they've been introducing gimmick after gimmick. I've been asking how much they cost.

The costs are astronomical. They don't make any sense, especially when we come to these little gimmicks like the sports tax credit, the tax-free savings account, and the public transit credit. We're never able to get a proper return analysis. There has to be some type of return analysis that you make and recommend to finance officials.

You said today that you're in close collaboration with finance officials. Before somebody would even come out with a policy--and even on the latest one, the harmonization--there has to be a return analysis. Wouldn't it be better to give the provinces $54 million instead of giving it to the CRA?

[Filipe Dinis]

Mr. Chair, as we indicated, the CRA is responsible for administrating the programs--

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

Yes, I understand that part.

[Filipe Dinis]

--so we're not in a position to really provide an assessment or evaluation of the programs.

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

Of course you are. You're the one who is going to tell Finance, ”This is how much it's going to cost, so we'd probably recommend...”. If it's going to cost--

[The Chair, Conservative, James Rajotte]

You have one minute.

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

Okay. For the tax-free savings account, I don't know what the cost was in advertising, but I think it was almost $150 million, and it cost another $50 million to implement it. Meanwhile, nobody is getting a benefit. Why don't we just give the $200 million back to the taxpayers directly to put in their pockets?

[Filipe Dinis]

Mr. Chair, we're in a position to provide estimates on how much it will take to implement the programs. Unfortunately, we wouldn't be in a position to provide an assessment of the program itself.

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

I agree with that part.

At what point do you provide the estimates to the finance officials? Is it after the policy has already been implemented and legislated? It would be prior to that, wouldn't it?

[Filipe Dinis]

The estimates we arrive at are arrived at after, and we submit the details of the estimates after the announcement. There may be some discussion prior to that, but I'm not aware of detailed discussions around how much the program would cost.

[The Chair, Conservative, James Rajotte]

We'll have to come back to this in another round.

Monsieur Paillé, s'il vous plaît.

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Dinis, your English title is chief financial officer. We understand what that means. However, it's more complicated in French. So you are the chief financial officer and you are a member of the agency's senior management. That's what I understand. Do you work in Montreal or in Ottawa?

[Filipe Dinis]

In Ottawa.

[Daniel Paillé, Bloc, Hochelaga, QC]

If I understand correctly, the $54 million is for operating expenditures. So that will be a renewable amount. The agency will receive it every year. If we calculate on the basis of the current value of the dollar, $54 million multiplied by an interest rate over a very long period of time could eventually reach an amount of $600 million to $1 billion.

Would that mean that, since the Government of Canada is taking responsibility for the administration resulting from the harmonization of the taxes—in addition to having given $4.3 billion to Ontario and $1.6 billion to British Columbia—that will be in addition to what is given to the provinces that have recently harmonized their taxes? There were payments of $4.3 million and $1.6 million, but the higher administration costs for the Government of Canada amount, to all intents and purposes, to an expenditure shortfall for Ontario and British Columbia if you yourselves spend those amounts. Is my reasoning accurate?

[Filipe Dinis]

I can't comment on the amount that was given to the provinces. However, I can comment on administration costs. As you mentioned, the $54 million is the amount for the 2010-2011 fiscal year. An amount will be allocated in subsequent years, but it will not necessarily be $54 million.

[Daniel Paillé, Bloc, Hochelaga, QC]

However, there are new employees. You have 80% at one place and 90% at another. You're not hiring them just for one year.

[Filipe Dinis]

That's true.

[Daniel Paillé, Bloc, Hochelaga, QC]

So I may consider it's fair to say that will be added to the compensation. In 1997, when you gave $1 billion to New Brunswick, Nova Scotia and Newfoundland, were there any adjustments that increased the costs to the Canada Revenue Agency?

[Filipe Dinis]

There were administrative costs, but once again, I can't really comment on the amounts that were granted at that time.

[Daniel Paillé, Bloc, Hochelaga, QC]

However, you can say that your administrative costs have increased. So we can say that the provinces have reduced their operating costs. I know you're not going to comment on that either.

If we take it for granted that the federal government recognizes the harmonization with the Government of Quebec, which has been in effect 20 years, and that Quebec will administer the GST and the QST in the context of a harmonized tax, can we not establish that the federal government will reduce its costs through the Canada Revenue Agency?

[Filipe Dinis]

I can't really make any comment on that point.

In that particular case, Mr. Chair, it would be a case of speculating, and I really don't have those numbers with me at this point. I would not want to speculate on the conclusion of something like that.