Thank you, Mr. Chair.
Good morning, and thank you for the opportunity to appear before the committee to present, and to answer any questions you may have on the Canada Revenue Agency's 2013-14 main estimates.
Mr. Chair, as you know, the Canada Revenue Agency is responsible for the administration of federal and certain provincial and territorial tax programs, as well as the delivery of a number of benefit payment programs.
Every year, the agency collects hundreds of billions of dollars in tax revenue for the Government of Canada, and distributes timely and accurate benefit payments to millions of Canadians.
In order to fulfill its mandate, the CRA is seeking the approval of a total of $4.3 billion in resources through these 2013-14 main estimates. This represents a net decrease of about $98.1 million, or 2.2%, when compared with the 2013 main estimates authorities. This net increase is made up of a number of changes, but in total, $132.8 million in decreases are offset by $34.7 million in individual increases. The $132.8 million in decreases to the agency's budget are comprised of the following items. A reduction of $56.3 million is as a result of savings identified as part of the budget 2012 spending review. Most of the savings measures can be categorized under two broad categories, mainly making it easier for Canadians and businesses to deal with government and modernizing and reducing the CRA's back office.
Secondly, the agency's 2013-14 budgets also reflect a planned reduction of $31.3 million related to the completion of start-up activities for the implementation of the harmonized sales tax for Ontario and British Columbia as well as the new affordable living tax credit for Nova Scotia.
Furthermore, effective April 1, 2013, the agency is no longer responsible for administering the harmonized sales tax on behalf of British Columbia. As a result, a total of $19.1 million is being returned to the Treasury Board through these estimates.
These main estimates also reflect a decrease of $1.5 million from last year's estimates for the government advertising programs. This brings CRA's total advertising budget for the 2013 tax filing season to $6 million.
The remaining $24.6 million decrease consists of miscellaneous items, such as $13 million less in revenues for cost-recovered services provided by Canada Revenue Agency to various organizations pursuant to section 60 of the Canada Revenue Act; the sum of $5.8 million in planned funding reductions for various initiatives announced in the 2009, 2010, and 2011 federal budgets; an amount of $3.6 million in lower employee benefit plan rates; and finally, $2.2 million in planned reductions for the administration of the corporate tax in Ontario.
Offsetting these decreases, the agency's budgets will be increased by $34.7 million for a number of initiatives that I will briefly address as follows. There is an additional $14 million in 2013-14 as part of the multi-year upgrade of CRA's personal income tax processing system. This system is integral to the delivery of CRA programs and services to Canadians, providing Canada, the provinces, and the territories with their principal source of revenue. This system also enables the termination of eligibility for individual Canadians who receive benefit payments and tax credits each year. These upgrades will leave the CRA in a better position to address increased numbers of tax filers, respond to new tax policy measures, and implement new partnership agreements with provinces, territories, and other government departments and agencies.
In addition, the agency is requesting a $10.9-million adjustment in the transfer from Public Works and Government Services Canada related to accommodation and real property services.
The statutory payments for the children's special allowance are also expected to grow by $5 million, from $233 million in 2012-13 to $238 million in 2013-14. This is due to increases in both the numbers of children for whom payments are expected to be made and the monthly payment per eligible child.
The 2013-14 main estimates also reflect a $3 million increase in statutory disbursements to the provinces under the Softwood Lumber Products Export Charge Act, 2006. These projected increases reflect a revised forecast provided by the Department of Finance based on historic averages as well as forecasts of U.S. prices and volumes.
The final increases relate to an adjustment of $2.5 million in the amount previously transferred to Shared Services Canada when it was created, as well as $0.1 million in other miscellaneous items.
Overall, these main estimates display a net increase of $98.1 million when compared with the 2012-13 main estimates granted by Parliament. The CRA's revised authorities for 2013-14 will therefore total $4.276 billion. Of this amount, $3.1 billion requires approval by Parliament, whereas the remaining $1.2 billion represents a statutory forecast already approved under separate legislation.
The statutory items include softwood lumber disbursements to the provinces, the children's special allowance payments, the employee benefit plan costs, and the section 60 spending of revenues received through the conduct of CRA operations.
Mr. Chair, at this time my colleague and I would be pleased to respond to any questions you may have on the CRA's 2013-14 main estimates.