Evidence of meeting #218 for Finance in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A video is available from Parliament.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
This is the worst case for an amicable settlement. I cannot understand why the minister was not informed and did not oppose such a settlement.
Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
The minister's role is to establish the approach to be followed by the agency.
I am responsible for audit programs. We have a protocol to follow for settlements, which is published on our website. We use criteria to make our decisions. For example, if it is an extreme case, we reserve the right to refuse.
The minister made sure that the procedure was followed and that the delegation to the committee was based on the established criteria, as is her role. It would be unusual for a minister to interfere with a specific decision.
I can assure you that several points of view, including the one you are now making, were taken into consideration. We considered other factors, such as the likelihood of a judge ruling in our favour, the precedent a judgment would set and the costs associated with it. All these factors...
Liberal
The Chair Liberal Wayne Easter
Mr. Dusseault, we'll let Mr. Gallivan finish and then we have to move to the other side. We'll be out of time.
Go ahead, Mr. Gallivan.
Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
The agency is not always pleased with the judges' decision.
Liberal
The Chair Liberal Wayne Easter
Okay.
We're coming over to this side, but in fairness to Mr. Dusseault, Mr. Gallivan, I think many of us were of the opinion that the transparency that would be followed would include the identity of those who were charged. There wasn't transparency in that case, and that does worry us.
Ms. Bendayan.
Liberal
Rachel Bendayan Liberal Outremont, QC
Thank you for your testimony.
I would like to take this opportunity to ask you a question about something that is a concern for the residents of Outremont.
A number of individuals in my riding have mentioned that they have received text messages or emails from individuals claiming to be from the CRA, who are clearly not from the CRA, who are essentially extorting money from them, threatening criminal repercussions and/or jail in some cases. As you can imagine, many of these individuals are elderly or vulnerable people. I wonder if that is something that has come to your attention, and if there are any measures in place at the moment to help Canadians deal with this troubling matter.
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
I would say that, yes, the issue of the scams out there and how they are affecting people has come to our attention quite a few times. I have received them myself. So what are we doing about it? We're certainly concerned. We have tried to institute programs to educate people and make them aware and alert to the fact that these scams are out there, as well as what they can do and who they can report them to. There have been some successes, not as many as I would like, in finding the perpetrators, but we need to be ever vigilant.
It's a concern to me, because one of the foundations for us at the agency is trust and confidence, and Canadians must have trust and confidence in us. Anytime there's one of these calls, it causes doubts in the minds of people. We need to try to do everything we can to assure them that we are trying to protect their interests. We are trying to track these people down when we find inappropriate behaviour, but it's difficult and complex, and we have to keep at it.
I would just say, from our perspective as well, that we have systems whereby we try to call people to deal with the issues they've raised, and even doing that affects that person when they get a call from the CRA, because they don't know whether or not it is a scam. So it has some real practical implications for us as well. We are continuing to try to ramp up, as well as we can, education and awareness and to alert the proper authorities so that we can get on top of it.
Liberal
Rachel Bendayan Liberal Outremont, QC
Thank you, Mr. Hamilton.
On the topic of ramping up, you mentioned in your opening remarks that there was an increase of $110 million for measures to crack down and combat tax evasion, tax avoidance, and to enhance tax collections.
Later in your statement, you mentioned an increase of $29 million to improve general tax compliance. I wonder if you could perhaps explain to the committee some of the new initiatives that are being created thanks to this new funding or some of the measures that you feel would help Canadians and your work at the CRA thanks to this funding.
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
I'll highlight just a couple of things. Again, maybe I'll ask Ted if he wants to add anything that I forget to cover. Certainly the resources we've been given in this area are very helpful to us in a number of ways. One, we can hire more auditors to ensure that we have people who can look into these cases on a risk-assessed basis—so there's a people dimension—and to make sure that those people have the right skills that are needed to be able to look at some of these complex transactions, to understand them and to figure out the right tax outcome.
There's also a technological component to this. As we move forward and with technology developing, there are different tools that can be used to analyze data. We have a lot of data at the CRA. What we're trying to do is to have the right people and right technology available to assess that data and point us to areas where there might be higher risks than in others. At the end of the day, that's a big issue for us at the CRA, to make sure that we are doing a good job of assessing risks and putting resources in those places where they can be the most helpful.
I think I've covered it.
Do you want to...?
Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
Maybe I can give just two specific examples. There are country-by-country reports for multinationals that we are now receiving, as well as the Common Reporting Standard, which is worldwide banking information of Canadians that we are also now receiving. These dollars help give us the IT systems to mine that. We've already seen a bump. If you look at the Fiscal Monitor on corporate tax from 2017-18, it's up roughly 10%. Last April to this March, it's up 11%. So you see corporate tax revenue kind of moving.
There are lots of reasons behind that, but I think some would say this idea that the tax authorities globally have more data and the tools to analyze it is moving some of the people who are offside onside, because you see this dramatic growth and the corporate tax being paid voluntarily.
Conservative
Pierre Poilievre Conservative Carleton, ON
Researcher Vivian Krause appeared before this committee recently and revealed that wealthy fraudsters have been misusing fake charitable vehicles for undue personal benefit. She gave the example of Gerald Butts, who received $400,000 from the World Wildlife Fund as severance when he voluntarily quit.
She also indicated that CRA has reported that in an audit of 42 charities, 41 of them were found to be non-compliant with the rules. She also demonstrated that charitable structures are being used to fund anti-Canadian energy activities that are unrelated to any sort of charity.
The only reason this and other scandalous misuse of the tax system has come to light is because of CRA's online database in the charitable tax directorate. One week after Ms. Krause testified here, your agency decided to take literally a million records off that publicly reported database. Why?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Mr. Chair, that initiative had been under way for some time. What we were looking at, in terms of modernizing our charities website and information base, was just to try to make sure that it's modernized and updated and giving people the information they want.
There was a decision taken not to keep the information for longer than five years on the site. I would note, however, that the information still exists. People can request it. We just found that in looking at the usage of the information, people were generally not requesting it for that extended time, but the information is still there and can still be accessed.
Conservative
Pierre Poilievre Conservative Carleton, ON
Right. You took it off-line.
The Globe and Mail wrote a piece called “Inside the charity network that...helped wealthy donors get big tax breaks—and their donations back”. The only reason that article was possible is that the information was online and searchable. They didn't have to ask you for permission to look at it.
There was no harm done by leaving it online, yet suddenly you took it off-line. What harm was done by leaving that information online so that members of the public could carry out their own investigations, as The Globe and Mail and Vivian Krause had done?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
The only harm, I guess, that I could put, is that we need to focus our efforts on putting the information out that's most useful to people. We have taken great strides to be more transparent about what we do.
This was a case where people in the agency looked at who is using this information and what is the most accessible and determined that rather than have a bunch of information out there that people aren't using, let's make it publicly available, the most important—
Conservative
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
—but make sure that people can still get access to the information if they needed it.
Conservative
Pierre Poilievre Conservative Carleton, ON
They are using it. It was used for a massive Globe and Mail investigation. It has been used to expose other fraudulent misuse of the charitable tax system. It has been used for published purposes. It has been used to bring evidence before this very committee. Obviously, it was being used.
It would have taken you and your agency more effort and resources to take it down than to leave it up. You haven't given a single justification for why you expended time and resources to proactively send your people into your Internet system to take that data down so that it's no longer available to Canadians.
Again, what harm was done, other than embarrassment for the government, by leaving that information online so anyone could access it without your permission?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Again, just to say that the two issues you're relating, about whatever testimony and then the modifications to the website, are unrelated—
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
—but what I would say is that in general at the agency we have to think about the data we have, and if we never take anything off or we never respond to the most useful pieces of information for people to have, we will have frankly too much information that people can't access.
The important thing here is that we wanted to make sure that the information was still accessible, which it is, so anybody who wanted to do that work could still do it, but I take your point.