Evidence of meeting #171 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Bob Hamilton  Commissioner of Revenue, Canada Revenue Agency
Gillian Pranke  Assistant Commissioner, Assessment, Benefit and Service Branch, Canada Revenue Agency
Clerk of the Committee  Mr. Alexandre Roger
Hugo Pagé  Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

The Chair Liberal Peter Fonseca

I call this meeting to order.

Welcome to meeting number 171 of the Standing Committee on Finance.

Today's meeting is taking place in a hybrid format.

I'd like to remind participants of the following points.

Please wait until I recognize you by name before speaking. All comments should be addressed through the chair. Members, please raise your hand if you wish to speak, whether participating in person or via Zoom. The clerk and I will manage the speaking order as best we can.

Pursuant to Standing Order 108(2) and the motion adopted on Thursday, September 26, 2024, the committee is meeting to discuss tax debt writeoffs, carousel tax fraud schemes and other issues involving claims.

Now, it is my honour, pleasure and privilege to welcome the Minister of National Revenue, the Honourable Marie-Claude Bibeau.

Welcome, Minister. I'm sure everybody is eager to hear your opening remarks before we get to members' questions. I know you are joined by a number of officials who will be with you now and through to the end of the meeting.

3:55 p.m.

Compton—Stanstead Québec

Liberal

Marie-Claude Bibeau LiberalMinister of National Revenue

Thank you, Mr. Chair. Yes, I'm joined by Commissioner of Revenue Bob Hamilton and assistant commissioners.

We are pleased to have the opportunity to discuss tax fraud schemes, the debt writeoff process and the Canada Revenue Agency's service delivery.

Protecting the integrity and fairness of Canada's tax system is a top priority for the Government of Canada and the agency. The agency is committed to combatting tax evasion and tax avoidance both domestically and internationally.

Historic investments by the Government of Canada enabled the agency to expand the scope of its audits, improve its comprehensive data sources and enhance its analytical approaches. It has been able to hire specialized resources. In addition, this funding has enabled the agency to leverage strategic alliances with its domestic and international partners.

The agency is therefore in a much better position to detect and deter the most serious cases of non-compliance, including abusive schemes in Canada's goods and services tax and harmonized sales tax systems, such as carousel schemes. This deliberate focus on willful non-compliance enables the agency to support its mandate to make sure the tax system is fair for all.

The same is true for the agency's collection program, which, through innovation and the use of analytics and technology, also ensures a high level of results.

With respect to debt writeoffs, it is absolutely important to note that the vast majority of accounts receivable are indeed collected over time. In addition, a writeoff occurs when all of the agency's collection measures have been exhausted. I can assure you that the agency's collection program is very rigorous before it gets to that stage.

That said, in the vast majority of cases, the debt remains in the taxpayer's account. As soon as the taxpayer's financial situation improves, active collection measures are then relaunched with the same rigour.

Finally, I would like to point out that, in Canada—as abroad—all government institutions are currently under significant pressure in terms of services to the public. In fact, it is mainly the agency's contact centres that are experiencing significant pressure. In recent years, the agency has faced a record number of calls, largely due to the increase in the number of benefits and credits implemented to support the Canadian population during and since the COVID‑19 pandemic.

This increase also includes services for people who are new to Canada. These people need a higher level of support to understand their new tax obligations and learn how to access benefits and credits, such as the goods and services tax credit, the Canada carbon rebate and, obviously, the Canada child benefit.

That said, the agency can improve its service delivery. Concrete solutions are already on the table, starting with the increased implementation of self-service options that are expected to help relieve the pressure on contact centres.

I will conclude by reminding you that the Canada Revenue Agency is a world-class tax and benefits administration. Its vision is to be helpful, fair and trustworthy, in keeping with its service philosophy that puts people first. Furthermore, in the spirit of tax justice, which is a Canadian value, it is rigorously committed to ensuring that everyone, without exception, pays what they owe to the government's coffers.

Mr. Chair, thank you.

4 p.m.

Liberal

The Chair Liberal Peter Fonseca

Thank you, minister.

Now we will go to members' questions.

In the first round, members, each party will have up to six minutes to ask questions.

We are starting with MP Chambers for the first six minutes.

4 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Thank you, Mr. Chair.

Minister, it's nice to see you again.

When we last spoke at the ethics committee, we talked about writeoffs. I asked about whether you were able to disclose the largest writeoff that happened last year.

Are you able to disclose that today?

4 p.m.

Liberal

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

You're very familiar with the Canada Revenue Agency Act and section 241 of the Income Tax Act, which requires us to exercise a high degree of caution to ensure that the information we communicate publicly doesn't directly or indirectly reveal the identity of the taxpayer to whom the information relates. That's why we had to create groups before making the information public.

4 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

I understand.

My concern is that, in 2019, your predecessor at the CRA made that figure available to the public. Just last year, you also released that figure to Senator Downe in response to an order paper question through the Senate.

I'm confused as to why, all of a sudden now, there's some policy change on not being able to disclose to Canadians the largest single writeoff to an individual or a corporate taxpayer. We're not asking for somebody's personal information. We're not asking for even the name of the company—although I think that would be well within our rights to start asking for.

At one point, it was $133 million in 2019. I assume the reason is that it's such a big number that you don't want to disclose it.

Is that fair?

4 p.m.

Liberal

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

It's not a matter of wanting or not wanting to make the information available. This is really a decision based on the advice of our legal advisors and tax experts. They believe that if we provide detailed information, you would be able to figure out the identity of the taxpayer to whom it relates. We can't take that risk.

4 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

I understand that. As a lawyer, I understand that sometimes we would like to give the advice the client wants to hear. I find it hard to understand why a couple of years ago, even one year ago, this figure was publicly available, yet today it is not. I understand that we're not going to get that today, but we will continue pushing for that.

Minister, The Globe and Mail mentioned in September that writeoffs for last year totalled about $4.9 billion, but that was before the end of the year. Can you tell the committee the total writeoffs for last year now that we have the final books closed for the year?

4 p.m.

Liberal

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

For fiscal year 2023‑24, the final figures will be published in the Public Accounts of Canada, but I can give you the most recent figures. The writeoffs will amount to $4.3 billion.

4 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Are they writeoffs for taxes? Are they corporate writeoffs and personal writeoffs both together? What's included in that number?

4 p.m.

Liberal

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

That's the total for all writeoffs, including personal, corporate and trust accounts.

4 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Thank you very much.

You're saying that we'll get that number in the public accounts, I suppose, on Monday? Is that the number we'll see in the public accounts?

4 p.m.

Liberal

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

Yes.

4 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

I saw that the CRA noted about $1.1 billion through audits that should have been examined for carousel schemes and GST schemes in 2017-18, so this predates you, Minister.

I'm curious; have you been able to collect any of that money yet?

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

The dilemma here, the thing that makes answering that question so complicated, is that our collection efforts encompass all of the agency's various debts, whether they're the debts of individuals or companies or, in this case, tax debts or debts stemming from carousel-type schemes. The system doesn't allow us to isolate data out of all of the agency's collection efforts in order to determine what our results were for the specific case of carousel schemes.

4:05 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Okay.

Since we're also talking about writeoffs, I'm curious about the underused housing tax. My understanding is that the CRA has actually spent more money on administration than it has assessed to collect. The last figure from an order paper question was that the CRA assessed that there was $49 million owing in underused housing tax.

How much of that has been collected? Has any of that been written off?

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

Yes. Our last checks showed that the revenue generated by the underused housing tax exceeded the cost of administering it.

That was the first year. This year isn't over yet, but I can tell you that, so far, we've recovered more money than it costs to administer this tax, and that amount will definitely be even higher by the end of the year.

For a brand-new program like this, we need to implement a risk management system and have a certain sample size so we can tweak it. Revenues will increase every year.

4:05 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Just very quickly, have you written anything off from the underused housing tax?

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

Would you just repeat?

4:05 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Have you written off any amounts owing under that underused housing tax?

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

I don't think so, but as I said, I don't have details on writeoffs broken down by category. That said, it's so recent that it's unlikely, since a lot of effort goes into collection before a debt is written off.

4:05 p.m.

Conservative

Adam Chambers Conservative Simcoe North, ON

Okay.

Thank you, Chair.

The Chair Liberal Peter Fonseca

Thank you, MP Chambers.

Now to MP Baker, please.

Yvan Baker Liberal Etobicoke Centre, ON

Minister, thank you for being here today. I have a few questions for you.

First, I presume the number of taxpayers calling the agency for whatever reason is growing every year, as the population grows. Meanwhile, the challenges posed by technological changes and the rise in identity theft are making it harder and more time-consuming to verify callers' identity when they contact the agency.

In that context, what is the agency doing to stay on top of developments and continuously improve customer service?

Marie-Claude Bibeau Liberal Compton—Stanstead, QC

Great question.

Yes, our call centres have come under a lot of pressure in recent years. Over the past few years, the number of programs and tax credits the agency administers has been growing, especially during COVID‑19. All this has led to higher call volumes for the agency. Furthermore, since we're administering more programs, the nature of the calls has become more complex. As I said in my opening remarks, it takes more time to answer questions from first-time filers. Plus, there's the new reality surrounding cybersecurity. The amount of time it takes for an agent to confirm a person's identity over the phone increases the length of the call. All of these factors have increased the pressure on the agency over the past few years.

We have implemented a call optimization program. Now, when wait times reach 30 minutes, a system gives the people waiting in line the option to be called back the same day. New callers will be redirected to the self-service options or asked to call back when the lines are less busy.

The agency has also extended its service hours. We're now open from 6:30 a.m. to 11 p.m., even on Saturdays. We needed to extend our service hours because of Canada's different time zones.

We've noticed that caller satisfaction levels are way up. The problem wasn't the service they were getting; it was reaching an agent.

Those are the agency's preliminary efforts. We're in the process of developing more programs involving new technologies and artificial intelligence.