Finance Committee on May 19th, 2016

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you very much.

I have a first question to Monsieur Huppé on the adjustments or extra budget put in place to cope, if I understand correctly, with the changes in the new budget around the taxation system. Is that correct?

[Roch Huppé]

I'm sorry, that was around the what?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

It's around the new taxation rules with the new budget.

[Roch Huppé]

First of all, the budget 2016 funding that we've been talking about for a few minutes is not in these main estimates. The main estimates represent the decisions made by Parliament in the past up to a certain point.

But yes, we received back then a very large sum of money to review the actual system itself. We have large investments, for example, in our T1 system. We have large investments right now being done in our benefits system, and also in our compliance system. The agency is making investments in these areas with the funding that has been received over these few years.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Can you sum up the total amount of money you'll be getting to work with these changes and the new tax schemes?

[Roch Huppé]

What I can tell you is that the agency spends approximately $100 million a year towards the improvement of these systems. It varies from system to system, obviously.

Some of the $1 billion is towards developing certain systems to have better business intelligence, for example. There are portions of money there. What we do at the agency is manage the funding in a portfolio, and there are decisions made. There's a process every year by which we decide which systems are in need of improvements or have sustainability issues.

We spend in the neighbourhood of $100 million a year on these systems.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

This is a question to the minister.

I guess you were probably involved in the $444-million budget; is that correct? Were you as minister involved in setting up this number that you need for the next few years, yes or no?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Yes, as we were saying, we have budgeted for $1 billion over the next five years.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

It's over a billion dollars; is that correct?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Yes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Coming from a customer service background, I'll ask, are you looking to make the CRA friendlier? How is that going to reflect itself to taxpayers? Is this going to be a softer approach to your clients, who are the taxpayers and the corporations and everybody who pays tax?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Yes, this really is customer service, where we have to respond to a request quickly and be able to provide information in a form that can be understood. Access to clients means doing outreach to people with disabilities, people who live in remote areas and may not have access to electronic services, and also seniors. So it is a service that is really based on the specific characteristics of certain client groups. There are also the aboriginal communities. We have to be in contact with them in order to give them access to various programs. In the case of the aboriginal communities, we have to make sure they are able to receive the Canada child benefit. To do that, people have to fill out their tax return. All in all, it is important for us to reach the entire population so everyone has access to the programs they are entitled to.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Aboultaif.

Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Minister, this is saying that $444 million will be added. I see nothing about this in the estimates, nor is there anything budgeted in the 2016-17 supplementary estimates. Mr. Huppé mentioned that this investment was not yet confirmed.

Can we at least know how this $444 million will be allocated? What departments will this money go to?

I am concerned about the fact that this money is going to be distributed in its entirety. The CRA has to deal with very specific cases, big clients like KPMG, for example. Do you have an idea of how this $444 million will be allocated, overall?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Mr. Huppé will be able to answer that.

[Roch Huppé]

As you said, the $444 million does not appear in these estimates. The amount will mainly be added to our compliance measures. In the estimates, there is a figure of $1.067 billion for those measures already. A large part of the $444 million will also be invested in those same programs.

In terms of the process, we are currently working on the exact breakdown of the $444 million among the various programs. This information comes from our submissions to the President of the Treasury Board, who approves the information. It is then submitted to Parliament, via the supplementary estimates. Again, I cannot provide you with more details at this point, given that this is confidential information that is still at the submission stage. A large part of that figure will be used to improve our performance in our activities with clients, and so on.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I am going to ask you one final question before turning the floor over to Mr. Dusseault.

Even though the $444 million has been announced, it has not yet been approved by Treasury Board, is that right?

[Roch Huppé]

Absolutely. The figure should be approved within a few weeks. It will then be tabled in the supplementary estimates (B). That is our objective.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

I am somewhat surprised to hear the minister referring to this $444 million almost every day, when the money has not yet been approved by Treasury Board.

That said, I am mainly interested in the 2016-17 report on plans and priorities, which, to my mind, offers a lot more perspective when it comes to spending by the Canada Revenue Agency.

When I look at a graph in that report, I see that the Canada Revenue Agency's budget has declined. The 2015-16 public accounts that will be released shortly provide for $3.3 billion. For 2018-19, according to the report on plans and priorities, $3.32 billion is budgeted over three years.

Minister, what is the explanation for your reference to an investment, when the report on plans and priorities, for the 2018-19 outlook, shows a decline in the Canada Revenue Agency's budget? The report even shows a staffing decline of 2,318 full-time equivalents.

Can you explain the reason for that decline, which is shown in the 2016-17 report on plans and priorities?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

Mr. Huppé will answer your question.

[Roch Huppé]

I do not have the graph you are referring to in front of me. However, the 2016-17 report on plans and priorities that has been tabled does not include the recent investments announced in the budget. A report on plans and priorities presents all sources of funds that have been approved to cover a specific period when the data are prepared. It also includes funds that we would have received that are going to be eliminated over the years. We therefore have to remove those amounts before submitting a figure. That does not mean that those funds will not be renewed in a subsequent budget. The graph you are referring to illustrates the authorizations we have received at a specific point in our process.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I understand.

However, why is that amount not reflected in the report on plans and priorities? For example, if an investment of approximately $444 million is announced, and another amount for client service, why is that not reflected in the report?

Take another example. For the compliance program as it relates to tax returns, which is still an extremely important program, it is the same thing when it comes to the projected spending for 2015-16.

We also see a reduction of $54 million between the 2014-15 and 2015-16 public accounts, the equivalent of a reduction of 382 people in terms of full-time staff.

How do you reach this conclusion in your report on plans and priorities? Does your projected spending extend to 2018-19? Investments are being announced, and in the reports, it shows a decline between now and 2018-19. Why do you not take into account the announcements that are being made?