Evidence of meeting #199 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chair.
A video is available from Parliament.
11:35 a.m.
Banff—Airdrie, CPC
Okay. If you would allow that, I would love to hear what—
11:35 a.m.
Liberal
The Chair Liberal Wayne Easter
If Mr. Trueman wants to fully answer that, he can. There will be a second round, I'm sure.
Go ahead.
11:35 a.m.
Geoff Trueman Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Thank you. Just in terms of consultations with industry and businesses, we've been very cognizant of the need to reach out to industry. Since last fall, we have had a number of engagements with stakeholder groups, including the businesses themselves, industry associations and virtually any organization whose members would be required to register under the fuel charge. In particular, we've been meeting with representatives from the air, the marine, the rail and the trucking sectors and spent significant time as well with Canadian fuel producers and distributors.
We continue to be available for webinar, teleconference and in person meetings, as available. We've had quite an active outreach and engagement session with them to explain the new rules and the registration requirements.
11:35 a.m.
Liberal
The Chair Liberal Wayne Easter
We'll have to hold it until the next round, Blake. We're over the time by about two minutes.
Mr. Dusseault.
February 28th, 2019 / 11:35 a.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
Thanks once again to the witnesses for being with us.
I would have liked the Minister of National Revenue to appear before us as she has usually done when we consider estimates. I don't know why she was afraid to come this time. At any event, with all due respect, she asked you to answer most of the questions. Perhaps we'll move along more quickly today.
I'm going to follow on from our last meeting with the Minister of National Revenue. You'll probably remember it, Mr. Gallivan, since we talked to you about the number of offshore tax evasion convictions.
Would you please tell us what progress has been made in this regard since that meeting? Have there been any convictions for offshore tax evasion?
11:40 a.m.
Ted Gallivan Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
We're still focusing on offshore tax avoidance. I can confirm that we currently have 53 active cases. Those cases involve approximately $400 million in revenues not reported to the agency. I think it's still a matter of time periods.
Four years ago, the convictions were solely for domestic tax evasion, amounting to $12 million. The figure was $45 million for the 2017-2018 fiscal year. Those cases were broader in scope but didn't include offshore tax avoidance cases.
My yardstick is the future, which is our inventory. I believe our inventory accurately reflects our common concern with offshore tax evasion. The RCMP made a seizure in Montreal. It was a money laundering case. We currently have 12 ongoing joint investigations with the RCMP respecting money laundering and other major crimes.
I think we're seeing encouraging signs that the agency has altered course and is headed in the right direction. The justice process will result in convictions based on the evidence at our disposal.
11:40 a.m.
Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
I just want to talk...
11:40 a.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
I'm asking for a yes-or-no answer. You needn't give me a long two-minute one. Has there been a conviction for offshore tax evasion, yes or no? It's quite a simple question.
11:40 a.m.
Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
Your question assumes I have a magic wand and can dictate the course of our criminal investigations. That ultimately depends on the evidence.
11:40 a.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
So the answer is no. It's not about words or using a magic wand, but about reality and the facts. It's simply no. Is that correct? I'll take that as a yes.
I have another question about the progress being made on another issue: the KPMG case. Three years ago, the Minister of National Revenue constantly told us that everyone was going to be prosecuted, justice would be served, no one would escape justice and the people responsible would be made to pay.
Can you give us a progress report on the KPMG case and tell us whether the firm, and not just its clients, will suffer the consequences of its actions, which you and I both know have been publicly exposed?
11:40 a.m.
Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
That's a very pointed question.
There are two elements. First, we've already established the identities of all the clients. There has been a lack of cooperation by some of the individuals identified, but the audit is under way. The audit process is still under way due to the complex nature of some cases. We're satisfied we can uncover all those involved and audit them.
Then there's the fact that some participants objected to the Tax Court of Canada. It will be up to the judges of that court to decide whether the behaviour of those participants was consistent with the law. As for KPMG, we're still considering our options as to what penalties should be imposed on it. We're still gathering facts through our audits, and that's helping us see what options are available to us.
11:40 a.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
So you've already made some progress; I'm pleased to hear it.
Since my speaking time is limited, my final question will concern another topic. It's been brought to my attention that denials of disability tax credit claims, or DTC claims, have risen 60% in recent years. As a result, you've recovered $26 million in bonds that were granted for persons with disabilities in registered savings plans. So that amount has been recovered from the savings accounts of persons with disabilities. Can you confirm those figures today? Can you explain why there's been a sharp increase in rejections of DTC claims?
11:45 a.m.
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
I'm not sure about the figures you cited, Mr. Dusseault. I'll check and send you a written response to the question after the meeting.
Nearly two years ago, we reviewed the number of disability tax credit claims. We changed our response in some circumstances. Generally speaking, we allow approximately 80% of claims. I'll check the 60% figure you mentioned.
11:45 a.m.
NDP
11:45 a.m.
Liberal
The Chair Liberal Wayne Easter
I'm sorry, Mr. Dusseault, but your time is well up as well. We'll look forward to that response.
Mr. McLeod.
11:45 a.m.
Liberal
Michael McLeod Liberal Northwest Territories, NT
Thank you, Mr. Chair, and thank you to the presenters.
As the member of Parliament for the Northwest Territories, I want to be on record as saying that we know pollution isn't free. We're seeing the cost of forest fires, the droughts and floods and extreme weather and the impact these are having, including impacts on our health. We certainly know that climate change is real. We're at the forefront. We see it on a daily basis. It's happening, and we can't turn a blind eye to it.
We're seeing the cost of insurance to the households in the north skyrocketing. This is concerning not only because it's adding to the burden of running a household, but because many people are dropping household insurance because they just can't afford it anymore. That cost increase is to make up for the costs of all the fires that have been burning across the country, including in the Northwest Territories. We don't have a lot of merchantable timber, but much of it is burning, and we expect more is going to burn.
We have erosion issues. Some of our communities are being washed away. We have quite a bit of frozen silt that made up the islands in the delta, and now we're trying to stop the communities from sliding into the ocean. We're dumping gravel, and it's like driving a truck up and dumping money right into the ocean, because it doesn't stay. We've been told that there are landslides under the Beaufort Sea that are 20 kilometres or 30 kilometres long. These things are all factored into the costs of what's happening to us.
Canada has come up with a framework, and I was really happy to see the government in the Northwest Territories step up and develop their own plan. That plan, however, is not going to kick in until probably July of this year.
You came forward and asked for $10.8 million to administer the federal fuel charge. I'm wondering whether that is only applicable to the backstop jurisdictions and whether it applies to the Northwest Territories.
11:45 a.m.
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Thank you, Mr. Chair. I'll answer that.
The short answer is...well, I can't remember whether it's a yes or no, so I'll just say it applies only to the backstop jurisdictions. In the case of, for example, the Northwest Territories, which has a plan that meets the standard, it will be up to the Northwest Territories to decide whether they would like to have a separate incentive program.
Should they do so, we at CRA have the ability to administer and we have in the past administered programs for other provinces and territories. For example, we administer a rebate program in Alberta and B.C. on a cost recovery basis.
It would be up to the Northwest Territories to decide whether they want such a program and then to talk to us about whether we would administer it. They could administer it themselves. They might have other options. We do it, and so that could be a possibility.
Just to clarify, this is with respect to the climate action incentive or rebate program. As for the fuel charge itself, we'll be administering it across the country.
Unless Geoff would like to confirm or deny any of that, this would be my answer to your question.
11:50 a.m.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Just to clarify, yes, we will be administering the federal fuel charge in those jurisdictions where it will be applying, where the backstop is in effect: in Saskatchewan, Manitoba, Ontario and New Brunswick.
11:50 a.m.
Liberal
Michael McLeod Liberal Northwest Territories, NT
In the event that more resources are needed when the carbon pricing regime takes effect in the north, will this be sufficient to cover it? I'm not clear if that's the case.
There is going to be a carbon price offset included in their plan, and to do all the calculations, that's not going to come cheaply and they may need resources. How does that fit into what you're talking about here?
11:50 a.m.
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
In terms of the rebate or the payback, that would be the subject of a discussion between us and the territory about what that looks like, how much it would cost to administer, because the design can affect the cost, and then what our charge to the jurisdiction would be to administer that program for them.
However, the short answer to the fuel charge side of things is yes, this money is what we believe we need to administer the charge, going forward. It's a separate question on the rebate.