Evidence of meeting #38 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.
A recording is available from Parliament.
Assistant Commissioner, Canada Revenue Agency
Because they're confidential. It would be like you writing a letter to the CRA. We don't make that public. If you choose to make it public, that's fine.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I see.
This is my last question. It's a bit concerning in terms of the corruption allegations that seem to be washed over a little bit by the government. Is it not true that seven people within the CRA were arrested for charges ranging from bribery to conspiracy, fraud, and breach of trust?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
In relation to the Montreal case, there were actually eight people arrested relating to that.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Yes. The court process is ongoing right now.
Conservative
Conservative
Mark Adler Conservative York Centre, ON
Thank you, witnesses, for being here today.
I want to correct the record on something that was said earlier in terms of the floating tax debt. The number of $29 billion was referred to. It's important to note, however, that, as you know, $40 billion in tax debt was resolved and brought in. It's important to make that distinction. It's not as negative as it appears; in fact, it is quite positive.
Canada certainly has one of the highest tax compliance records in the world. Is that not the case? Yes.
Our government has certainly been at the forefront of promoting the fact that everyone has to pay their fair share of taxes. Since 2006 we've passed more than 85 measures to improve the integrity of our tax system, 85 measures which, I should add, were each singularly voted against by both the Liberals and the NDP.
I would also like to say that in terms of tax collection improvements, the amount of taxes recovered has grown between 2006 and 2013 by 75%. That's correct, right? Roughly?
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
To my knowledge, yes.
Conservative
Mark Adler Conservative York Centre, ON
Okay. Thank you very much.
I want to talk a bit about the underground economy. The underground economy refers, of course, to business activity that is unreported or under-reported. In economic action plan 2013, our government included some measures that addressed the underground economy, such as substantial fines for businesses caught using electronic suppression of sales, or zapper software.
Can you expand on some of the penalties associated with being caught using this zapper software and how they will ensure a level playing field for honest businesses?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
Thank you, Mr. Chair, for the question.
Indeed, in budget 2013 there were measures brought in to make it illegal to have zapper software. The agency has started a publicity campaign to advise people that there are substantial penalties. Unfortunately, I don't know the penalties offhand—the Income Tax Act is pretty big—but I can get that for the committee. Substantial penalties were brought in to make sure we deal with the people who provide the software.
Assistant Commissioner, Canada Revenue Agency
To supplement what Richard said, it's actually a two-tiered penalty system. There's one if you're actually the business using it. That's a significant monetary penalty. There's also a very significant penalty if you're actually a producer, promoter, and purveyor of these instruments.
The intent of the legislation is to get it out of the system, not to catch people with it. That's why I think the two-tiered approach works well. If you're providing it, there's a much harsher penalty than if you're a business caught with it.
Conservative
Mark Adler Conservative York Centre, ON
Thank you.
Could you comment on some of the measures that CRA is undertaking now to combat the underground economy?
Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency
There are a number of measures that we take. We have various projects under way across the country. We risk assess the various areas of the economy that we would look at. We use information such as the Stats Canada report that talks about the growth of the underground economy and the areas of the economy that are more apt to get involved in underground economies, normally restaurants, construction, etc.
We tailor our compliance activities based on the sectors of the economy, and regional sectors of the economy, that need a better look.
Conservative
Mark Adler Conservative York Centre, ON
Okay. Thank you.
Could you comment on the level of professionalism of CRA workers? We've heard some comments from the other side about corruption within CRA. Of course, in any large organization there will always be some bad apples. Could you comment on the general level of professionalism and the commitment to public service of CRA workers?
Assistant Commissioner, Canada Revenue Agency
I'll just make one observation after some 30 years in all of this, which is that probably no one's more offended when things like that happen to an organization than the people in the organization. There's probably nobody more dedicated to rooting it out and making sure it doesn't reoccur than the 40,000 people who work ceaselessly. I think the organization is not only proud of the tax system but proud of what we do in terms of public service, and we were deeply offended as well.
Conservative
Mark Adler Conservative York Centre, ON
Thank you.
I just want to make this quite clear. At no time does CRA act under any kind of political direction whatsoever. Is that correct?
Assistant Commissioner, Canada Revenue Agency
The charity issue came up, and I spoke to the charity issue. I don't have knowledge as to whether it's that broad a statement. I can speak only to my own areas in terms of the charities.
With regard to the issue of directing what I will call activities related to audit activities and transactional events—which are the things that Richard and I do, and we can certainly speak to those—which are the ones that would be the most sensitive in a tax system, the answer is no.
Conservative
Mark Adler Conservative York Centre, ON
Okay. Thank you very much.
I'd like to share the rest of my time with Mr. Van Kesteren.
