Finance Committee on June 16th, 2020

[The Chair, Liberal, Wayne Easter]

Thank you, all, for that.

We'll split the remaining time, about four minutes each, between Mr. Cooper and Mr. Fragiskatos.

Michael, you're on.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you, Mr. Chair.

Thank you to the officials from CRA for being here.

In looking at the estimates for CRA over the last several years, we see that the main estimates have been relatively stable: $4.1 billion in 2016-17, $4.2 billion, $4.2 billion and $4.5 billion. Obviously there's been a big increase, but that's due to the climate action incentive. In terms of actual expenditures, each year, starting in 2016 through 2018-19, there's a fairly sizable and growing gap between the main estimates and expenditures: $300 million, then $500 million, then $900 million in 2018-19, which is 21.8% more than was provided for in the estimates. Do you have any explanation for why there's this growing discrepancy?

[Janique Caron]

I'll take that question, Mr. Chair.

Often the main estimates do not reflect the amounts that—

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

I understand that. Just to be clear, I totally get that. I'm just saying there may be a very good reason or many reasons for it. I was just curious, because it is stable on the one hand and then growing each year.

[The Chair, Liberal, Wayne Easter]

Maybe we'll get an answer here, Michael.

Go ahead, Ms. Caron.

[Janique Caron]

The main estimates amounts often do not reflect the amounts that are voted in prior years, either to the main estimates or the supplementary estimates, then not spent and available for spending in the following year. That spending really reflects, I believe, the amounts that are available to the agency, legitimately available through parliamentary approvals, but not necessarily reflected in the main estimates. That's often one reason.

Last year in 2018-19, one big change was that the climate action incentive started to be paid through the 2018 tax system, and therefore there were $660 million of expenditures in the climate action incentive.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

With respect to the climate action incentive, following up on a question that was asked by Mr. Morantz in terms of reconciliation and the fact that no reconciliation has taken place, when will that happen? I guess, perhaps, that is a question that could be posed to Finance, but I don't know if any of the CRA officials could elaborate further on that.

[Janique Caron]

Mr. Chair, I'll start, and if Mr. Trueman can offer....

We're responsible for collecting the revenues and for paying the climate action incentive. We will produce, at the end of the fiscal year, which we're working on right now, a statement that will show the fuel charges that we've collected and the climate action incentive that we've paid. We will provide that to the Department of Finance. It will do the reporting, as it is responsible.

[The Chair, Liberal, Wayne Easter]

Mr. Trueman, do you want to close out that round?

[Geoff Trueman]

I've nothing to add, thank you. That's correct.

[The Chair, Liberal, Wayne Easter]

Mr. Fragiskatos, you will wrap it up with a couple of questions.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thanks very much, Mr. Chair.

Thank you to officials.

With respect to the effort, and I'm quoting here from budget 2019, the plan was, “to create four new dedicated residential and commercial real estate audit teams in high-risk regions, notably British Columbia and Ontario”. I'm just wondering to what extent these audit teams have been collaborating with provincial authorities in Ontario and B.C. If you wish to give other examples from other provinces or the territories, that would be welcomed as well.

[Ted Gallivan]

Thank you, Mr. Chair. I'll take this one.

All four teams are stood up in those areas of the country showing the highest risk. The team approach is linked to that BI concept where we try to look for patterns in the data and trends and, again, look for those common denominators. You can imagine that, when a condo building going up, what we'll try to do is look at every single condo. How many times did they flip? Who were the principals? Who was involved?

Yes, data on land use from the provincial governments, both the provinces of B.C. and Ontario, has been very helpful as has been collaboration with provincial partners who may signal certain buildings or developments that are more problematic. They also pick up intelligence from things like worker safety. There's this idea that a construction company that plays fast and loose with the safety of its employees may not be all that compliant with its tax obligations either.

We have subcommittees and working groups with colleagues at the provincial level. We tell them what our results are, and they talk about areas that may be of interest to us. Yes, information sharing from those two governments is really important.

There are some mixed results outside of those two provinces. We have some good results with some provinces. With some others, where we haven't been active, there may not be as much information as we want.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Can you, Mr. Gallivan, explore in a bit more detail the nature of the collaboration? How exactly did the audit teams interact? Who does what? What's the nature of the relationship? In fact, maybe partnership sounds like a more apt description, because what you're describing sounds like a very close working relationship.

[Ted Gallivan]

Again, we have to be mindful of the information-sharing agreement. Yes, it's true—

[Peter Fragiskatos, Liberal, London North Centre, ON]

No, that's fine, but I mean in general. Obviously I'm not going to put you in a compromised position. It's one thing to say we're working together, but, on behalf of taxpayers, how exactly are you doing that?

[Ted Gallivan]

Internally within the CRA, we're trying to bring data from some parts of the organization to other parts of the organization. A really quick example is if you are trying to get the GST/HST home renovation credit or the GST/HST rebate on a new home. Normally we used to look at that in isolation, but with these advances in data analytics, we look at that and say, “Well, does that make sense?” You're reporting income you can't sustain. You're saying you have eight kids for a child tax benefit, but you're buying a one-bedroom home. And then pushing up the food chain into developers, we see through these claims maybe a developer who's reporting building only maybe five or six houses a year but who has clients saying, “No, they actually built 60.” So I think a lot of the partnership focus for us has been that internal partnership, and with the province more leads and data, and in particular data on real property transactions.

[Peter Fragiskatos, Liberal, London North Centre, ON]

My next question relates to the funding for the taxpayers' ombudsman. What is the funding that's requested for that position for 2021?

[The Chair, Liberal, Wayne Easter]

Ms. Caron.

[Janique Caron]

Yes. Let me see. I believe it is $3.780 million for the fiscal year.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Okay. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Okay, thank you for that. Thank you for appearing on the estimates.

Mr. Fraser made the point earlier on the public service. I'd like to express our appreciation for all the public service does for Canadians in this country and for the efforts you make. It seems that at this committee, we have seen Mr. Gallivan and Mr. Vermaeten every few days over the last several months.

I do want to, on behalf of the committee, give a special thanks to CRA, your staff and your families as well. This working from home is not necessarily easy on families all the time either. Thank you for appearing today and for answering our questions.

With that, we will see committee members on Thursday.

The meeting is adjourned. Take care.