Finance Committee on Dec. 12th, 2024

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

Now it's over to MP Kelly.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Mr. Chair.

Minister, in response to my order paper question of this past spring, you refused to disclose the amount of the single largest tax writeoff. This is in contrast to previous practice.

Did you order your officials not to disclose that number?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Absolutely not. That is a team decision made after assessing the situation and risk. We have to be really careful not to share information that might directly or indirectly reveal a taxpayer's identity. I had no influence over that decision at all.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Minister.

This is in contrast to previous practice. Up until this year, when questions like this have been asked through the same method—an order paper question—you have disclosed the single largest number, but you did not do so this year. This absence of transparency leaves people wondering why. They wonder if there's a particular entity being protected and they want to know how much the single largest writeoff was. According to media reports, there were 11 entities who, combined, received over a billion dollars in writeoffs.

We're left to wonder how big the biggest one was.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I understand your question very well. Unfortunately, because of our obligation to protect the information of individuals and to not directly or indirectly disclose the situation of a company or an individual—

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

From your answer, may I then infer that this was an individual and not a corporation?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

No. I should have used the term “taxpayer” in the broad sense, so it could be an individual, a business, a trust—

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Minister, anybody watching this committee hearing will conclude that you are more interested in protecting the privacy of someone who has failed to pay almost certainly in excess of $100 million in taxes owing, rather than your being transparent with Canadians.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

When you're in government, you have duties that the opposition doesn't have, isn't that right? I have a legal duty to protect the information of all taxpayers. It's not my personal choice. For me to reveal more than that, the act would have to be amended first. I have no desire to end up in jail for that.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Minister, I'll note that my order paper question that you refused to answer and the question by Mr. Chambers were both simply for the number. We will not ask you who didn't pay. Will you tell Canadians how much the single largest writeoff was in this past year?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I can't share that information. We believe that sharing that information would allow you to directly or indirectly trace the taxpayer's identity.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

People may be left to speculate whether you disclosed the number or not. Minister, there's an alarming trend under way here. The amount in aggregate that you disclosed is unprecedented. You have, according to media reports, 11 tax filers who, combined, had over $1 billion in writeoffs, which suggests a series of exceptionally large writeoffs.

How many full-time equivalents are there, or what is the employee count right now, at the CRA?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

You asked how many employees work for the agency?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Right.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

There are about 58,000 employees.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

You have an army of 58,000 tax collectors. The Canadian army has only 33,899 full-time active personnel. Your army of tax collectors is enormous, Minister, and we are seeing an alarming trend of writedowns and failures to collect taxes. This is troubling for Canadians who pay their taxes, and your average filer doesn't have the ability to fight or be able to resist your tax collectors. It's the larger players who seem to be having their taxes forgiven.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

That is completely untrue, and I have the numbers to prove it to you.

Ten years ago, the agency collected $376 billion in revenues. Today, that figure amounts to $662 billion. Now let's take a look at writeoffs, the money that you say we're letting slip away. I would point out that this is money that we weren't able to collect despite a lot of effort. Back then, total writeoffs amounted to about $3.3 billion; today, it amounts to $4.3 billion. This means that, in 10 years, total revenues have increased by 76%, and total writeoffs have increased by 31%. I think that's a great example of the agency team's effectiveness.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Kelly.

This will be the final questioner of the minister, and that's MP Thompson, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you. I'm glad I get this opportunity.

Welcome.

I want to start with statistics and how we've been talking about them.

In 2024, the “Global Financial Crime Report” stated that financial global crime is a $3.1-trillion problem. Clearly, this is, as you referenced, Commissioner, a global challenge. It is international, and obviously the fraudsters are incredibly sophisticated.

I want to put in a plug for my riding. There is a company, Verafin, in St. John's, Newfoundland that started as a very small company in cybersecurity and has grown in a tremendous way. It is now Nasdaq Verafin. They do this cybersecurity work around the globe, enhancing investigators' AI capacity.

Minister, I don't know if this question is best for you or the commissioner.

Regarding the international groups that you meet with—and we know this is a global problem—what's happening internationally? Capacity within an organization is limited in light of the sophistication of the crimes being committed.

Is there a way to partner with organizations that are at the leading edge globally to be able to maximize our ability to really deal with this very serious problem?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

We do, definitely, but I'll let you go.

[Bob Hamilton]

Yes. I'm happy to respond to that, Mr. Chair.

You're right: It is a global issue. At the last meeting of this group that I chair, which is made up of the commissioners from basically all of the OECD countries, the number one topic on people's minds was the growing cybersecurity problem and fraud. Interestingly, one of the issues is that as all of the tax jurisdictions are trying to become more digitalized and faster in their service, we're actually opening the door a bit to allowing people to come and take advantage of that speed. That's a trade-off that we're all thinking about collectively.

What are we doing about it? We've done a few good things. We have instituted an automatic exchange of information whereby we're sharing information among ourselves about taxpayers in our jurisdictions so that if we see something that looks a bit funny, we can get that information from another jurisdiction. This is because, usually, when somebody is trying to evade or avoid taxes, they're doing it not just in Canada, but also in other places. We can exchange information to get a better handle on what's going on with some of these large, multinational groups, which can be hard to figure out just on your own. We're working together on that.

On the issue of financial crime, the minister mentioned that we had the J5, which is a group of five countries. It's made up of Australia, the U.K., Canada, the Netherlands and the U.S. They all get together—our tax and criminal enforcement groups—and that's good. It's good for us to share the best practices and what we are seeing because, again, something that's happening in one country is probably happening in another.

We've also created a separate little group, or a subgroup, that involves the large financial institutions and other experts in each of those countries. We can get together. Part of what makes us work well is our partnerships with financial institutions and others that aren't necessarily tax administrations to get a better feel for what's going on, and it's all necessary.

Fraud still happens. We're fighting it. We think we're doing lots of good things, but there are people who are very dedicated to committing fraud, and we have to make sure that we do everything on our side to try to stay ahead of them.

[The Chair, Liberal, Peter Fonseca]

You have a minute.

[Joanne Thompson, Liberal, St. John's East, NL]

Good. I have another question. Thank you for that.

Please remember Nasdaq Verafin.

Minister, to you, thank you for the volunteer tax support. I've seen that in play. It's amazing. It works for the most vulnerable. Along the same line, there's automatic tax filing. Again, I've seen this work. It's incredible. It's able to connect the most vulnerable with supports.

Would you speak to that?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Yes. Actually, we have two different efforts for automatic tax filing.

The first one focuses on people with basic incomes who will benefit from benefits. We're trying to make their lives easier by letting them file their taxes over the phone. This is something that we're trying, but I think the big one you were thinking about is trying to identify people who have not filed for many years or who have never filed and who would be eligible for benefits...because we care for people.

We want to increase the number of people we reach out to and allow them to answer a few very easy questions, whether by phone, on paper or online, to try to include them in the system. This is very promising.

[The Chair, Liberal, Peter Fonseca]

Thank you. That is the time we have with the minister.

We want to thank Minister Bibeau for coming before the finance committee and sharing with us all of this information in response to members' questions. We greatly appreciate it.

Now, members, we have an opportunity for the next 30 or so minutes to be with the commissioner and the other officials, the assistant commissioners and the directors who are with us here today, as we continue now into our third round of questions.

In this round with the officials, we're starting with MP Kelly for the first five minutes.