Thank you.
Good morning. Thank you for the opportunity to appear before the committee to present the Canada Revenue Agency’s 2017-18 supplementary estimates (C).
First, the agency is seeking $11.7 million as a result of a reduction in its accommodations requirement. This was made possible due to a series of cost-saving exercises carried out by the Canada Revenue Agency which has resulted in a reduction in our office space requirements by approximately 36,000 square metres of space, representing a total savings of $11.7 million. These savings can now be applied against other operating priorities.
Second, the Canada Revenue Agency is seeking $6.2 million to support its operations related to the legalization of cannabis, which will include the introduction of a related tax regime.
The incremental funding will be used to expand processing systems to accommodate the new tax and introduce the associated administrative framework. In addition, it will be used to start processing early licence applications, so that cultivators and manufacturers are able to provide legal cannabis on the implementation date.
We're also receiving a backlog in resolving pay issues. Also included in the supplementary estimates is $1.3 million for the increased workload in providing tax service support resulting from the implementation of the Phoenix payroll system.
A backlog in resolving the pay problems has resulted in 2016 tax slips being issued with many expected to result in personal income tax reassessments, creating an additional workload pressure. The one-year funding will be used to adjust staffing levels in the T1 adjustments team in order to manage the increased number of reassessment requests.
Also included in these supplementary estimates is a statutory increase of $1 million associated with adjustments to employee benefit plans for new salary funding being sought through these estimates. Following approval of these supplementary estimates, the agency’s revised 2017-18 authorities will total $4.7 billionxx.
In closing, I will say that the resources sought through these estimates will allow the Canada Revenue Agency to continue to deliver on its mission to administer tax, benefits and related programs, and to ensure compliance on behalf of governments across Canada.
Mr. Chair, we will be pleased to respond to any questions you may have.