Yes.
Evidence of meeting #61 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.
A video is available from Parliament.
Evidence of meeting #61 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.
A video is available from Parliament.
4 p.m.
Liberal
Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC
It was an excellent report. The committee's analysis was done in cooperation with the Canada Revenue Agency. I can assure you that the 14 recommendations are going to be implemented.
4 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Very well.
Are most of the recommendations legislative ones? Investments are a very good thing, but we feel that the legislative measures that could be put in place to fight tax evasion are important. Are most of these recommendations legislative or administrative?
4 p.m.
Assistant Commissioner, International, Large Business and Investigating Branch, Canada Revenue Agency
That is an excellent question. You are correct, legislative changes are essential.
We do not control all the decisions. This is mainly under the purview of the Minister of Finance. I can confirm that we have made suggestions. The agency will continue to propose legislative changes.
As to the recommendations the minister referred to, there are several administrative policies over which we have full control. That is why the minister is confident that we can implement them.
But you are correct; for some points in the recommendations, we will need the support of the Department of Finance.
4 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you.
Madam Lebouthillier, I would like to go back to what you said in your preliminary remarks regarding charities.
You are holding consultations to review rules you yourself feel are vague and unclear. The organizations run into difficulties because they don't know exactly what the rules are.
In the same context, when you made your announcement in September, you also admitted that 12 organizations were still under investigation and that this would continue until next December. I think the 12 organizations would like to know why you decided to continue the investigations, even though you acknowledged that the rules were vague and that you wanted to amend them.
4:05 p.m.
Liberal
Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC
Last January we decided not to open any more investigations. The 12 investigations on organizations that are ongoing currently had already begun. It's also simply a matter of fairness toward the other organizations that were investigated. We want to finish the work we started.
4:05 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Fine.
I'd like to ask a question of a more philosophical nature regarding the Income Tax Act. Do you think this act is simple and that ordinary Canadians can prepare their own tax returns without any help?
4:05 p.m.
Liberal
Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC
I would say it depends on the individuals, on their income and on what they own. We are trying to simplify the return forms. We are working on Auto-fill my Return, which is a form for people on fixed incomes. By this I mean people who receive a Canada pension or social assistance, for example. The objective of Auto-fill my Return is to make things simpler for those people.
4:05 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you.
Personally, I don't think the law is simple.
In this regard, I wonder if you would be ready to commit to reviewing the Income Tax Act to attempt to simplify it for Canadians. They have a lot of trouble understanding it and grasping all of its details. I think Canadians would be happy to hear that that was your intent.
4:05 p.m.
Liberal
Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC
As we said earlier, amendments to the act are really up to the Department of Finance. The Canada Revenue Agency is entrusted with its application.
4:05 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Will you make representations to the Minister of Finance to ask that the Income Tax Act be simplified?
4:05 p.m.
Assistant Commissioner, International, Large Business and Investigating Branch, Canada Revenue Agency
I think you're right to mention that.
We do have a role to play in providing feedback to the Minister of Finance, and we do that on a yearly basis. It is our view that millions of Canadians are able to complete their tax returns in a few minutes using software. I, myself, used my cell phone to take a picture of my T4 form and file my tax return. Not everyone is in a position to do that, however, and when we receive feedback to that effect, we pass it on to the Minister of Finance for his consideration.
4:05 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
I'd like to use the bit of time I have left to discuss a commitment that the Minister of Finance made, if I'm not mistaken. He committed to setting up a review process for all of the Government of Canada's tax expenditures, mainly, the dozens upon dozens of tax credits. I was curious as to whether any progress had been made in that file, the idea being to make the tax system as fair as possible and perhaps do away with tax measures that benefit only the wealthiest Canadians.
4:05 p.m.
Liberal
Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC
I agree with you completely.
The Canada Revenue Agency is working very closely with the Department of Finance on the matter. A number of factors indeed need to be considered. The wealthy are able to look after their needs. In my view, and I would say the government's as well, what really matters is making things better for the middle class. We want to make it accessible to people and offer tax credits and benefits to those who need them most.
November 24th, 2016 / 4:10 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Mr. Chair.
Welcome, Minister, and officials.
When we started several months ago looking at tax avoidance and tax planning mechanisms, whether it was for organizations or for individuals, and entering into and looking at various issues around the income tax system, it was apparent that we needed to ensure that Canadians had full confidence in their tax system and that they weren't subsidizing people who were entering into tax avoiding schemes, tax avoiding measures, or aggressive tax planning.
Minister, I was wondering if you could give us a broad update of what our government has been doing and what measures you've undertaken over the last several months to ensure that Canadians have confidence in the tax system.
4:10 p.m.
Liberal
Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC
It's important to understand that the majority of Canadians pay their fair share of taxes. As we mentioned in our presentation, we have to work on identifying those who set up schemes and encourage taxpayers to use them to avoid paying their fair share of taxes.
Mr. Gallivan can speak at greater length about what the agency and our government are doing to deal with the issue.
4:10 p.m.
Assistant Commissioner, International, Large Business and Investigating Branch, Canada Revenue Agency
I'm going to come back to the question of scope that was raised before in terms of our focus. Roughly 10% of our audit, or 14,000 audits, are focused at people with a high net worth doing aggressive tax planning, and at multinationals. That yielded $8 billion last fiscal year in audit impact. The other 140,000 audits were focused on small and medium-sized enterprises, and that effort yielded $4.5 billion in fiscal impact.
Roughly 10% of the audits are yielding roughly two-thirds of the effort. We definitely tend to focus disproportionately on the higher dollars, which tend to be with the high net-worth individuals.
In our approaches, we certainly have continued our traditional audit file selection that brought us to that $12.5 billion in audit impact, but what we're also trying to do to reassure Canadians is to take a broader brush. For B.C. real estate, in addition to increasing our traditional audit effort, we've also taken a look at the 500 highest risk real estate transactions, and we're going through them one by one.
With respect to offshore, we've selected the Isle of Man and three other jurisdictions. We're going through every single transfer to assess whether it's risky or it deserves our attention, and we're gathering more information on it. We're doing that because we want to report back to Canadians that at a risk assessment level we have provided 100% coverage.
I think that is a new approach that's being funded by the new dollars from budget 2016 and the appropriations you're voting on today. We're not only going to be getting that $500 million a year that we committed to, but we're also going to be covering entire populations that we deem at high risk to identify those who aren't compliant and initiate audit work.
4:10 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Just as a quick clarification, for the $500 million, is it $500 million over five years or $500 million per year?
4:10 p.m.
Assistant Commissioner, International, Large Business and Investigating Branch, Canada Revenue Agency
Per year.
4:10 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Okay. Just for my own knowledge, and it's more of a clarification, and excuse my ignorance on this, but on page 3 of the testimony from the officials, it says, “Also included in these Supplementary Estimates for information purposes is a net reduction of $108.4 million related to the Agency’s statutory authorities”.
Is that a movement of funds from one area to another, where there's been a cost reduction of some sort in one area and you're moving the funds to another area for usage?
4:10 p.m.
Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Sorry....
