Thank you, Mr. Chair.
Good afternoon, and thank you for the opportunity to appear before the committee to present the Canada Revenue Agency's main estimates for 2017-18 and to answer any questions you may have on the associated funding.
As you are aware, the Canada Revenue Agency is responsible for the administration of federal and certain provincial and territorial tax programs, as well as the delivery of a number of benefit payment programs. Each year, the agency collects hundreds of billions of dollars of tax revenue for the governments of Canada, and distributes timely and accurate benefit payments to millions of Canadians.
As the minister mentioned earlier, in order to fulfill its mandate in 2017-18, the CRA is seeking a total of $4.2 billion through these main estimates. Of this amount, $3.2 billion requires approval by Parliament whereas the balance of just under $1 billion represents statutory forecasts that are governed under separate legislation. The statutory items include children’s special allowance payments, employee benefit plan costs, and, pursuant to section 60 of the CRA Act, the spending of revenues received for activities administered on behalf of the provinces and other government departments.
These 2017-18 main estimates represent a net increase of $77.2 million when compared with the 2016-17 main estimates authorities. The largest component of this change is an increase of $164.9 million to implement and administer various measures announced through budget 2016. This includes $62.1 million for measures aimed at enhancing the CRA's efforts to crack down on tax evasion and combat tax avoidance.
The incremental funding will be used to hire additional auditors and specialists, develop robust business intelligence infrastructure, increase verification activities, and improve the quality of investigative work that targets criminal tax evaders. This includes $50.9 million for measures aimed at enhancing tax collections by increasing the resources available to tackle the inventory of debt; and $43 million for measures to further improve the agency's capacity to deliver client-focused services for Canadians and Canadian businesses. These include improving telephone accessibility, delivering correspondence and other communications that are clear and easy to read, increasing outreach efforts, and improving the CRA's capacity to resolve taxpayer objections in a timely manner. Funding includes $8.9 million for various tax measures including country-by-country reporting, efforts to protect the charitable sector from the risk of terrorist financing, the new small business quarterly remitter initiative, and consultations on the rules governing political activities for charities.
Other increases to the agency's budget include the following: a $51-million adjustment in forecasted payments under the Children’s Special Allowances Act due to an increase in the per-child benefit amount under the new Canada child benefit program, implemented in July 2016; $36.3 million for collective bargaining increases associated with employees represented by the Public Service Alliance of Canada, or PSAC, bargaining unit; $30 million related to the administration of the goods and services tax, recognizing the deferral of a savings proposal originally identified as part of the Budget 2012 spending review—this represents the ongoing amount of the adjustment included in the CRA's 2016-17 supplementary estimates (B); and $9.9 million—a net increase—in resources for the implementation and administration of enhanced compliance measures, as announced in Budget 2014 and Budget 2015.
These increases are partially offset by a $128-million reduction in projected statutory disbursements to the provinces under the Softwood Lumber Products Export Charge Act, 2006, as a result of the expiration of the agreement in October 2015; $42 million less in statutory contributions to employee benefit plans and in the forecast of cost-recovery revenues, pursuant to section 60 of the CRA Act, for initiatives administered on behalf of the provinces and other government departments; a $24.4-million adjustment related to accommodation and real property services provided by Public Services and Procurement Canada; and finally, a $20.5-million adjustment associated with changes in the funding profile for various measures announced in previous federal budgets. This includes a $9.5-million reduction in professional services, advertising, and travel, announced in budget 2016.
The CRA's 2017-18 main estimates do not yet reflect incremental resources for announcements made by the Minister of Finance in the March 2017 budget. The funding required for the implementation and administration of these measures is currently being evaluated by the CRA and will be presented to Treasury Board ministers through formal submissions in the coming months. Any incremental funding required for the 2017-18 fiscal year as a result of the Treasury Board submissions will be sought through the supplementary estimates process.
In closing, the resources being requested through these estimates will allow the Canada Revenue Agency to continue to deliver on its mandate to Canadians by making it easier for the vast majority of taxpayers who want to pay their taxes, and more difficult for the small minority who do not, as well as ensuring that Canadians have ready access to the information they need about taxes or benefits.
Mr. Chair, at this time we will be pleased to respond to any questions you may have.