Finance Committee on May 3rd, 2017

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

I am happy with your answers. It's fine.

[The Chair, Liberal, Wayne Easter]

Thank you. That's the end of that round.

Ms. O'Connell.

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

Thank you all for being here.

Minister, I want to start off by asking a question. My questions, frankly, will be similar to what I've asked in the past, because I am interested in the progress.

First off, regarding this committee's recommendations on tax evasion and tax avoidance, I want to thank you and acknowledge that you accepted all of this committee's recommendations. I look forward to seeing how that unfolds.

Specifically, I want to talk about the tax gap. I've raised this issue before. Previous to our government taking over and your being appointed minister of the CRA, Senator Downe had done a lot of work in regard to the tax gap. In the previous government, he had asked the PBO to bring forward the tax gap number: what is this number? Under the previous government, the CRA refused to work with the PBO and provide that information.

How can we tackle the issues of tax avoidance and tax evasion if we don't know how big the problem is? Are you doing anything or dealing with anything to finally release the information about the tax gap, so that we can properly assess the areas of tax evasion and tax avoidance?

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

I thank my colleague for her question.

Our government has in fact committed to study the tax gap, something the Conservative Party never wanted to do. Our approach is quite different, in that we work on the basis of facts. That is how I asked the Canada Revenue Agency to work. The agency is working in collaboration with the Parliamentary Budget Officer on the tax gap issue.

A first report was submitted last June. The work is continuing. Other meetings will be taking place. The important thing for us is to use all the tools at our disposal, to make sure that Canadians have trust in the fairness of our tax system.

I repeat my commitment, and the government's commitment, to continue our work and to make it public.

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

Thank you very much.

I'm sorry, I heard that the first report was published last June. Is that the internal initial report, and is there any timeline when you might expect some of this information to be released to the public?

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

A first report was submitted last June. As to how the work is continuing, Mr. Gallivan is more current as to dates and all the technical aspects.

[Ted Gallivan]

I want to come back to the history perhaps, from the CRA perspective.

It wasn't necessarily a refusal. We, like many tax jurisdictions, have concern over the accuracy and the difficulty with measuring a tax gap. In terms of co-operation with parliamentary officers, we had privacy concerns and legal advice that prevented us from co-operating to the full extent that they might have desired.

The minister is correct, though. Last June, we did release information on the GST. This June, instead of just pointing out how complicated it is, we've partnered with the Canadian Tax Foundation to hold an international summit on tax gap. Through the Canadian Tax Foundation, we're bringing in international experts, inviting stakeholders, and we're going to explore these methodological difficulties with measuring the tax gap. We're actually seeking to engage academics, statisticians, and others to get past “it's difficult to measure the tax gap” and develop actual strategies that will bring us, I think, to what we all want, which is a fair tax regime.

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

Thank you.

Through the chair, do you have a timeline on that work? There are lots of countries that are producing a tax gap. I appreciate the minister's leadership and commitment to finally move forward with this, but lots of jurisdictions have done this.

I appreciate that you want to come up with the right kinds of measures, but how soon will we see...? We won't know if our investments are really tackling this issue until we can track this tax gap.

[Ted Gallivan]

The meeting is scheduled for the first week of June of this year. We would expect the articles and advice to follow later this year.

[The Chair, Liberal, Wayne Easter]

Thank you all.

Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Welcome, Minister, Mr. Gallivan, and Monsieur Huppé.

I have a couple of housekeeping questions regarding the mailing of tax returns by some Canadians who mail them out. They can't file them electronically.

It seems that those people were told they would not be able to receive their refunds because the Canada Revenue Agency is not looking at these files until May 6. Why are we treating Canadian taxpayers differently, whether they chose to file electronically or manually?

Those complaints came to me. They're actual complaints. I would like to address them, and I would like an answer on that.

[The Chair, Liberal, Wayne Easter]

Are you clear on what the question is? There looks to be puzzlement.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I'll repeat the question.

Taxpayers who mailed their tax returns were told by the CRA that they will not be able to receive their refunds because the CRA is not looking at their files until May 6. That means Canadian taxpayers are being treated differently.

Whoever already filed electronically has received their money, and those who filed manually still have to wait, probably another month from now because May 6 is on a Saturday. Why is that? Where's the efficiency, and how can we show Canadians that we're treating them equally?

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

I thank my colleague for his question and for his concern for people. Indeed, not everyone has access to electronic services, and I am very aware of that.

In terms of customer service, in my opinion, everyone must be treated fairly. Just because someone sends their returns on paper does not mean that they will be treated less well than those who filed their returns online.

I am happy that almost 90% of the people send their returns to the agency electronically, but when we receive paper returns, we process them in the same way as electronic returns.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Well, they're not. That's the complaint we've received. My office has received complaints of that fashion. If 90% of Canadians comply, the other 10% are still waiting and are suffering as a result. I expect, from the extra resources that you have at CRA, and the extra money from last year and this year, that there will be a level of efficiency.

Also, in relation to the same question, we were told that taxpayers had difficulty during the past tax season finding tax forms at their local post offices. Is that another step in the phasing out completely for people who still prefer to file manually? Again, why now? You have the resources. Why can't these be phased out without a painful process for taxpayers?

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

I thank my colleague for his question.

At the beginning of tax season, I was told that it was difficult to find forms in French in some places. It was also difficult to get forms in some other places. I immediately contacted people at the agency to resolve the situation. Mr. Gallivan will be able to give you more information about that and to talk to you about the agreements we have reached with Canada Post in terms of paper tax returns.

[Ted Gallivan]

The CRA experience is that we have a very effective partnership with Canada Post to get those paper guides distributed all across the country. It is sometimes reported to us that in individual outlets—whether in a retail centre or otherwise—individual employees, not understanding this, sometimes destroy or move the guides. As soon as we're informed of this, we work through Canada Post to get that location restocked.

What I would suggest is, if you're hearing that information, the best thing you can do is advise the agency. Given the large number of postal locations all across the country, individual incidents like this can occur. The best thing is for us to respond as soon as we hear about it, to make sure we replenish the paper stock. Sometimes it can be aggressive taxpayers, who grab bundles of them. There have been reports of that as well. They just take all the paper that's available.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I think that the perception of it is that Canada Revenue Agency does not provide enough copies to post offices. That's why some people are suffering and falling behind. That is not fair for taxpayers.

Do I have a minute? Or 30 seconds?

[The Chair, Liberal, Wayne Easter]

We'll give you a very quick question.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

In reference to the discussion by my colleagues here about campgrounds, I would like to refer on record to recommendation 31 of this finance committee, that the Government of Canada recognize the income earned by campgrounds and storage facilities as active business income for the purpose of determining eligibility for the small business deduction. That's to be added to the records on file.

[The Chair, Liberal, Wayne Easter]

Thank you.

That is in our recommendations.

Mr. Fergus, you are next.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Chair.

Madam Minister, Mr. Huppé, Mr. Gallivan, welcome to the committee. It is a pleasure to have you here today.

I think I am the newest member of this committee; this is the first time that I have had the opportunity to ask you questions.

At the beginning of your presentation, you mentioned all the changes that the agency has put in place since November 2016. Can you talk to us a little more about the streamlining of the agency's services that was announced in November 2016? How will that streamlining help the agency to fulfill its mandate more effectively?

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

I thank my colleague for his question.

As my mandate letter mentions, one of the agency's priorities is customer service. Our government is committed to having the agency provide Canadians all across the country with the best service.

The objective of streamlining the services is to concentrate processing activities in the three national verification and collection centres.

I have been able to tour the agency's offices all over Canada. Actually, the tour is just coming to an end. I have been meeting with employees to see how the streamlining of services is going in the trenches, because streamlining means change. Employees and management are working together and are committed to serving Canadians. I was extremely surprised to hear employees all over the country tell me that they had never seen a revenue minister in their offices and in their regions. Streamlining the services has allowed us to consolidate our services in the regions. As I see things, all the regions of the country are important.

The only office that was closed was in Toronto, but there are already three other agency offices in that city. We made sure that we worked with the unions to support employees through all the changes that were implemented.

Everywhere I went, I met Canada Revenue Agency employees who are committed to customer service. I always take the opportunity to tell them how much of a priority customer service is for me. I am a social worker by training and, as I see it, everyone must be treated the same, from the poorest to the richest.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Madam Minister, given that you are also a member from Quebec, you have the great pleasure, as I have, of filling in two forms when you do your taxes.

As you know, I represent a border constituency. A number of my constituents work on the Ontario side but pay their taxes in Quebec. Even federally, there is often confusion between the RL-1 slip and the T4 slip. Since we are talking about improving things and providing service, I wonder whether the agency is at all aware of that situation.

How can we make life easier for my constituents, so that they can fill in their two forms and calculate their deductions without difficulty?

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

You are perfectly right. The fact that there are two tax returns is peculiar to Quebec. The CRA is working closely with the Ministère du Revenu in Quebec. I have also met with my colleague, Minister Leitão, on several occasions.

With that introduction, I will ask Mr. Gallivan to answer your question in more detail.