Finance Committee on Dec. 12th, 2024

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Is the intention to continue to allow for that?

Other than the benefits one might get from using an electronic form of payment, are there any disincentives, fees or anything like that in place for those folks who use...?

I know what happens at the banks. Let's be frank. We all pay enough fees at the banks, but sometimes, if you want to get a paper statement now, some financial institutions will charge you for a paper statement, an extra copy of a statement or whatever.

I'm just trying to get a sense, for the sake of my constituents, if that is the the model you're turning to on some of the more paper-based payment systems or disclosure statements?

I'm really thinking about payment by cheque through Canada Post. That's the example that comes to mind, but I'm just wondering if there's any intention to phase that down in any way or have people pay a fee for using that sort of service?

[Gillian Pranke]

Mr. Chair, it's very important for the Canada Revenue Agency to ensure that we don't leave any citizen behind. We are a “people first” organization and there are no plans to charge fees for individuals who wish to avail themselves of less digital solutions, whether they be paying by cheque or filing a return through the paper channel. Both are absolutely acceptable and are not discouraged.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Okay. Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

Now we'll go to MP Ste-Marie, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Commissioner, since 2015, not long before you took up your position, the number of Canada Revenue Agency employees has increased by nearly 50%. Nevertheless, departmental performance reports indicate that the agency is only meeting 48% of its targets. That means it's missing its targets by 52%. This is one of the worst track records in government.

The taxpayers' ombudsman, François Boileau, says that he is so swamped with complaints about the Canada Revenue Agency that he can't even process or respond to them all.

Le Journal de Montréal recently published a series of articles recounting the many horror stories that people have to tell about their experience with the agency's services. I apologize to the interpreters in advance, but the situation is so serious that the newspaper named this series of articles “Chaos at the Canada Revenue Agency.”

The CBC/Radio-Canada has reported on all kinds of fraud and fraud schemes committed against the agency. On looking at the leaked tax haven documents, we see that the agency is really at the bottom of the list when it comes to recovering the funds associated with these leaks compared to European countries, the United States and even Revenu Québec.

Do you think that the agency's work and your work have lived up to expectations?

[Bob Hamilton]

You may not be surprised, but I will say, yes, I am very proud of what we do at the agency. I don't deny some of what you say. There are challenges facing us out there.

Yes, we have grown considerably since 2015. We grew a lot in the pandemic. We were asked to do a lot. We had a lot of work dumped on us that was outside of our normal work. I don't mean "dumped on us". Rather, it was placed upon us. We had to hire and we had to change our systems to be able to do that.

Did problems come from that? Yes, but I am very proud of what we did, both in getting benefits out the door and in ensuring adequate compliance to make sure that the right people got the benefits.

We have made quite a bit of effort since about 2018 to really become, as Gillian put it, “people first” and to think of the client first. We have made a lot of progress.

Now, there are a couple of forces working against us. We have certainly seen an increase in the amount of fraud. That's not just at the CRA; that's all businesses and organizations in all countries. It has placed a strain on our ability to deliver services in a timely way. If you think of it in a service versus security lens, we have spent a lot of time trying to provide great service and do things quickly, as I mentioned earlier. We're now looking at the security aspect and whether we need to adjust or recalibrate. That is something that all jurisdictions are going through.

I won't give you a litany of excuses for why we aren't meeting some of our service standards. I would just say that we've had to do a tremendous amount of work. We delivered the goods where we needed to and got out programs that the government wanted to implement. We've been there for the government, but yes, we are facing some stresses and strains. In particular, as financial resources get constrained, that will be upon us.

We talked earlier about debt collection. Not everybody in the agency is a debt collector, but we're collecting more debt now than we did before. It's just that there's more debt out there because of the economy's growing and because of financial conditions.

I don't want these to sound like excuses, but there are a lot of factors that influence how our performance goes. We just keep striving to do the best we can, and I think we have a world-class organization on our hands.

[The Chair, Liberal, Peter Fonseca]

Thank you, Commissioner. We're well past the time.

We'll now go to MP Davies, please.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Mr. Hamilton, I'm Zooming in from my constituency. In the break, I went to ask my caseworker if she had any questions that she wanted me to put to you. She's the person who deals with my constituents' issues with the CRA. The report I got back was that the CRA is being very responsive, gets back to us generally within five days and is quite helpful in resolving issues. I thought I would throw this out. Kudos to those who work with MP offices. I wanted you to know that.

Mr. Hamilton, the CRA has a duty to report material breaches of taxpayer accounts to the Privacy Commissioner, who then reports directly to Parliament. In a report to Parliament in June, the Privacy Commissioner reported 71 breaches at the CRA in the fiscal year ending March 31, 2024. In the previous three years, 42 privacy breaches had been reported. However, in answers to questions from CBC/Radio-Canada's The Fifth Estate, the CRA admitted it was hit with more than 31,468 material privacy breaches from March 2020 to December 2023, affecting 62,000 individual Canadian taxpayers. The Privacy Commissioner noted that the CRA sent information on these breaches after the March 2024 reporting period, and that he will include the new numbers in the next year-end report.

Can you explain why the department failed to uphold that ministerial responsibility to Parliament in light of the significant under-reporting of privacy breaches by the CRA?

[Bob Hamilton]

Thank you. I'm happy to respond to that question.

First off, I have to say thank you for the kind words. In my job, I don't get a lot of compliments. We try to do the best job we can.

On the issue of privacy breaches, we're not happy that we weren't able to provide those to the Privacy Commissioner on a more timely basis. To understand the context we were dealing with and what led to that, in the early days of the pandemic, there was a fairly massive incident that affected not just the CRA but also others. We had a lot of privacy breaches that came out of that. As the minister indicated, at that time, our focus was on protecting the accounts and money involved. It wasn't as if we waited for three years to do something about it; we were doing a whole bunch of things to make sure we were blocking accounts. We were talking to taxpayers and finding out what happened. Often, it's not easy to figure out if there was or wasn't fraud. That took time, and we worked through it.

I would note that the OAG looked at this issue, and we reported on this in that OAG report. We said, in July 2022, that we had 23,000 cases for $131 million. It wasn't as if there were nothing being reported, but we did not get them to the Privacy Commissioner in a timely way. We have now done that. We're all caught up on the 31,000 cases you referenced. I would expect that, having worked through it, we will now see a more regular strain. We are still getting frauds. We are still getting privacy breaches, but we're working on them, and I think they'll be in a more normal zone.

We have a relationship with the Privacy Commissioner where we can tell his office about things that are happening informally, so they can be prepared for it. Our commitment now is to get those privacy breaches to the Privacy Commissioner in a more timely way while we work on the cases.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

It's now over to MP Hallan.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thanks.

Chair, actually, this question is for you.

At the last committee meeting, we passed a motion to summon the finance minister to appear at this committee to answer for the fall economic statement before we rise from this fall session.

Have you reached out to the finance minister? If you have, have you heard back?

[The Chair, Liberal, Peter Fonseca]

That request came through the committee.

Clerk?

[The Clerk of the Committee, Mr. Alexandre Roger]

We cannot summon a minister, but I invited her.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Have we heard back from her?

[The Clerk]

I haven't.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you.

Mr. Hamilton, I want to clear up something about the minister's testimony.

The publicly reported number for the writeoffs was $4.9 billion. A few minutes ago, she said it was $4.3 billion. It's unclear to me whether that's going to be the number in the public accounts.

Can you rule out that the number for the writeoffs in the public accounts will be more than $4.3 billion?

[Bob Hamilton]

Mr. Chair, let me give an opening, and then I'll turn to our CFO, Hugo Pagé.

One thing to recognize is that we report on the writeoffs in the public accounts. The public accounts for this year are not yet there. However, there is other information that comes out before the public accounts come in. That's where, potentially, the $4.3 billion—

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'm not really looking for a huge explanation. I just wanted to know if you could rule it out.

I'm assuming you can't rule it out. You could say that.

[Bob Hamilton]

What am I not ruling out? I'm sorry. I just want to make sure I have—

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Can you rule out that it will not exceed $4.3 billion?

[Bob Hamilton]

I don't have that information. I'll ask Hugo.

[Hugo Pagé, Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency]

The number that will be reported in the public accounts for writeoffs is $4.382 billion.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

All right.

I want to ask you about the capital gains tax. It's a bit of a mess. It was introduced in the budget in the spring. There was a ways and means motion that got passed in June, and then another one that got introduced in September.

We have a minority government that seems to be on its last legs. It's in a precarious situation. The government could fall. There are transactions going on. People will presumably be paying you the additional capital gains tax based on the increased inclusion rate whenever that money is due early next year.

I'm just curious what would happen if somebody paid the additional tax, the government fell and a new government came to power that did not bring in implementing legislation. Would that additional tax be refunded to the taxpayers?

[Bob Hamilton]

Mr. Chair, just to respond, the situation you raise is not totally unique. We deal with this from time to time, when legislation or a notice of ways and means is put forward. The question is whether we administer it or not before it receives royal assent.

In this case, we've been clear that we are going to administer the provision as per the notice of the ways and means. People will have choices about how they decide to conduct their affairs and how they decide to file their returns.

In the specific case you've raised, the reason I mentioned the beginning part is that at the end, the legislation either gets passed or it doesn't. You then have to have some sort of reconciliation at that point. I will ask Gillian to confirm this, but at that juncture, we would try to write everything as if the legislation had never come.

Gillian, I just want to make sure I'm right on that.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

That answer is good. I want to go on because my time is quite limited, but I thank you for that answer.

On another matter completely, in October, it was reported that there were 330 employees of the CRA who inappropriately applied for and received the CERB. They are no longer with the agency. These are people who were working who scammed the CERB program.

What efforts has the CRA taken to collect the monies that were improperly paid to those employees?