Finance Committee on March 30th, 2023

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 82 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 81(4) and the motion adopted on Tuesday, March 7, 2023, the committee is meeting to discuss main estimates 2023-24, referred to the committee on Wednesday, February 15, 2023.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking.

With respect to interpretation, for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

I remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.

I would now like to welcome our witnesses appearing in the first hour. With us today is the Honourable Diane Lebouthillier, our Minister of National Revenue.

Welcome, Minister. I know you have with you many officials from the Canada Revenue Agency.

Before we get started with your opening remarks, Minister, I want to say thank you very much. In my riding of Mississauga East—Cooksville, we have a number of tax preparation clinics manned by volunteers, and with help from the ministry and with funding, those have gone a long way to helping many individuals do their tax preparation. Thank you for that.

The floor is yours.

[Diane Lebouthillier, Liberal, Minister of National Revenue]

Thank you, Mr. Chair.

I also want to thank you for giving me the opportunity to address the Standing Committee on Finance today to talk about the Main estimates 2023‑24 and the supplementary estimates (C) for the Canada Revenue Agency for 2022‑23.

As you have pointed out, I have with me today a number of key officials from the agency. I can never say it often enough: we owe them a lot.

To begin, I would just remind the committee that the CRA's mission is twofold. On the one hand, it is responsible for administering federal tax programs and certain provincial and territorial tax programs, and, on the other hand, it is responsible for implementing certain benefits payment programs.

Since March 2020, new benefits and services have been added to help Canadians and businesses facing the global COVID‑19 pandemic. Those benefits played an essential role in providing security for Canadians during the pandemic, but they also served to protect our economy.

I don't think I am mistaken when I say that we all know of businesses in each of our ridings that were able to stay open, people who were able to keep their jobs, and lives that were saved. This was all possible because of the decisive measures taken by our government. I continue to be extremely proud of the leadership the CRA demonstrated during this period.

The CRA listens to Canadians so that it can continually improve its services and the way it does things. This is also a priority for our government. For example, in addition to extending business hours at its call centres and hiring more agents to respond to Canadians, the CRA has also launched an automated call-back service for peak periods. This service lets people get a call once an agent is free, which means not having to stay on the line to retain their priority.

Let me be quite clear: the CRA and I do not intend to rest on our laurels and move on to something else. Quite the opposite: as we know, improving services is a continuous process. We can and must always do better. I intend to continue this important work at the CRA.

Regarding the 2023‑24 main estimates, the Canada Revenue Agency is seeking investments of $14.9 billion. These funds will be used to administer measures that are key to continuing to combat tax evasion and tax avoidance, ensuring that the Agency's call centres remain in place post-pandemic, and administering the federal fuel charge and the federal carbon pollution pricing rebate.

Regarding the major elements of the supplementary estimates (C), I am going to be brief. These investments will be used for call centres and for administering measures to help Canadians save to buy their first house. These investments will enable CRA to implement changes to its systems and made the needed changes to publications and procedures relating to the administration of the underused housing tax in Canada, on properties that generally belong to non-resident non-Canadian owners. They will also be used to administer the luxury tax and the Canada Economic Recovery Program, which has been put in place to encourage employers to rehire workers who were laid off because of COVID‑19, and to put the Canadian economy in a better position for the recovery process. This funding is necessary for the CRA to be able to do its validation work.

In conclusion, the administration of fiscal measures associated with international tax reform will reduce the incentives for multinationals to transfer their profits to jurisdictions with low tax rates and limit the use of excessive interest deductions to reduce Canadian tax.

You will certainly have noticed that this estimates exercise is affected by a major event in the form of the global COVID‑19 pandemic.

Despite the enormous challenges created by the pandemic, the CRA has improved in numerous respects over the last year. It has certainly learned many lessons from its commitments in relation to services and communications, but also to its own role as a key government agency that has the privilege of serving Canadians every day.

Even though, we must admit, it has never been easy, the CRA maintains its firm commitment to excellence and is determined to honour the commitments it made for 2022‑23.

In closing, I want to recognize the exceptional work done by CRA employees, who were on the front line during this difficult period. Despite the challenges presented by the pandemic, their unflagging work ensured that Canadians had access to the financial support they needed during that time. They also had to adapt to new working conditions and methods, including telework. They did this with professionalism and with remarkable efficiency. In their own way, they were our guardian angels. Their contribution has had a decisive effect and their important work is still continuing today.

Thank you, everyone. We are now ready to answer your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you for your opening statement, Minister.

Thank you also for agreeing to stay here for the full hour.

Members, we started at 11:50, so the minister will be with us until 12:50. We're going to start with the first round. Each party will have up to six minutes to ask questions of the minister.

We're starting with the Conservatives and MP Chambers.

You have six minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Good morning, Minister.

I am happy that you are here with us. Welcome.

I'll need to take some additional French lessons for our next interaction.

Last fall, there were some serious allegations with respect to advance pricing arrangements. Can you update the committee perhaps? Do you know any more than you did back in the fall about allegations with respect to how advance pricing arrangements were given out? This was reported in the CBC and some other articles as a whistle-blower case. They said there were some challenges in how advance pricing arrangements were being used in the department.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

The interpretation isn't working.

[The Chair, Liberal, Peter Fonseca]

Can we check on interpretation, Mr. Clerk?

MP Chambers, could you repeat the question for the minister?

[Adam Chambers, Conservative, Simcoe North, ON]

Sure.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I need the last 30 seconds.

[Adam Chambers, Conservative, Simcoe North, ON]

Do you know any more? Has there been an investigation or follow-up on the complaints made by the employee? Are you aware of any kind of follow-up investigation?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I'm going to let the CRA representatives answer questions that relate to technical details.

[Cathy Hawara, Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency]

I'm happy to take the question, Mr. Chair.

These were a series of allegations made a number of years ago. They were investigated a number of years ago, and the results confirmed that no serious wrongdoing was committed. They were in relation to a particular advance pricing arrangement, and we were satisfied that all the necessary steps had been taken and that no inappropriate favourable tax treatment was given to a taxpayer.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

From your perspective, there's no additional follow-up required on this matter.

[Cathy Hawara]

Yes, the matter was fully investigated at the time.

[Adam Chambers, Conservative, Simcoe North, ON]

I think there was a commitment to transparency with respect to that complaint. Has there been any kind of public disclosure of that investigation? Are these documents internal to the CRA that remain there, or is the ombudsman looking into it?

[Cathy Hawara]

The matter and allegations are related to a particular taxpayer. Therefore, the confidentiality provisions of the Income Tax Act apply.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

On the confidentiality provisions of the Income Tax Act in section 241, the Parliamentary Budget Officer has expressed some concern with respect to the timeliness of information they receive from the CRA.

Minister, are you aware of the concerns of the Parliamentary Budget Officer? Do we need to make an amendment to section 241 to make sure a parliamentary officer has the information to do his or her job appropriately?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I would like to tell my colleague that when it comes to the confidentiality of the information provided to the Canada Revenue Agency by taxpayers and businesses, the bond of trust must be protected. There are very clear rules at the CRA at present, precisely concerning section 241.

We are also having internal discussions to try to see whether improvements can be made regarding what stays confidential and what can be reported publicly.

I agree that a lot of work remains to be done, but confidentiality and trust between taxpayers, businesses and the CRA is definitely of crucial importance to me. It also protects the integrity of the tax system.

[Adam Chambers, Conservative, Simcoe North, ON]

That's fair enough.

I would like to read you the quote, just so you know where the Parliamentary Budget Officer is coming from. He said, “every single time we have an interaction with [the CRA], we get incomplete information. It has to be vetted before sending us aggregate tax information.”

I think under some circumstances, when they're asking for anonymized data, which would not identify a particular tax filer in the aggregate, they're having some challenges in using section 241. I'll leave that with you to maybe contemplate as you're thinking about how to better collaborate with our Parliamentary Budget Officer.

I was happy to see the recent news release about the underused housing tax. There was some leniency given to this year's filing. We have heard a lot of feedback from taxpayers about how difficult and potentially confusing it is.

There's one thing I would like to leave with you as a suggestion. If you file a return one year, you should only need to file a return once for a property, until that property is sufficiently disposed of or the control of that property changes. Requiring taxpayers to fill out a form every year seems significantly onerous. It would keep with the principle and spirit of the idea, but not unduly require a burden on taxpayers.

Mr. Chair, I believe I'm done. Thank you.

[The Chair, Liberal, Peter Fonseca]

We're at six minutes, yes. Maybe that's for the next round.

We are moving over to the Liberals.

I have MP MacDonald, please, for six minutes.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Chair.

Welcome, Minister. It's great to see you here. We have something in common: the red shores of the Magdalens and Prince Edward Island. We're only separated by a ferry.

Minister, I want to ask a question that follows up on something you mentioned in your opening remarks. It's specifically about lessons learned from the pandemic. Can you go into more detail about the lessons that CRA or its officials learned from the pandemic, particularly relating to customer service and communications?

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

I thank my colleague for his question.

We do have to recall what happened at the beginning of the pandemic. We saw the world practically come to a standstill. Programs had to be put in place rapidly to be able to help Canadians, both individuals and businesses, to receive benefits. The Canada Revenue Agency had to put benefits in place rapidly from the outset.

As the pandemic unfolded, we saw refinements to the requirements put in place for people to have access to various programs. Rules were put in place to make sure that the right people were receiving the benefits.

Rules were also made when we worked to put the wage subsidy program in place. Businesses were required to meet conditions. The primary concern was that the businesses were paying the employees. The businesses could then apply to the CRA to receive the support they needed. We worked to put winning conditions in place.

We believe that what is also going to be important will be to do an evaluation. We are coming out of the pandemic and the programs have ended. We are going to have to evaluate what happened so we are prepared for a future pandemic, which we are not hoping for, and have a much better stocked toolbox for responding to the public's needs in the right way.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

Minister, this morning I met with Women's Shelters Canada. They represent some of our most vulnerable citizens and constituents, and the issue of at-risk and vulnerable populations is one I hear a lot about in my riding. I was wondering if you could possibly go into some more detail of the work you're doing in this area to help those people to make sure they get their benefits and credits.

I remember being a provincial politician and going into schools to talk to administrators about the Canada child benefit to ensure they sent the information to the appropriate people so these people would apply for tax services and receive these benefits. It wasn't selfish. I was the finance minister at the time, but I didn't do it just for individuals; it was for the economies of each of our provinces. It's extremely important. Millions of dollars come into our provinces through these programs. I'm wondering what your department is doing to ensure that we can access those individuals to provide them with the appropriate information.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

This subject is very important to me.

When I first arrived at the Canada Revenue Agency, I wanted to make sure that people experiencing difficulties received benefits under the programs we were putting in place. I travelled all over Canada to meet people at the CRA offices, but also groups of volunteers who help those who are most vulnerable to get the benefits they are entitled to.

I also wanted to ask the volunteer groups what the government could do better to support them. They told me that over time, they had been abandoned. They were receiving little information and were no longer receiving any money. As volunteers, they had to pay to try to do their work even better. The CRA has put a program in place for $10 million over three years to help volunteers do their work better. It helps them pay their travel expenses, buy office supplies, and so on. There is also help for training, so they can stay abreast of changes to the tax system.

Last year, over 13,000 volunteers all across Canada completed more than 650,000 tax returns. I was in New Brunswick two weeks ago and I was told about people who didn't know they were entitled to certain benefits. If we take the guaranteed income supplement, for example, we are talking about $11,000 or $15,000.

One MP told me that in Ontario, a mother had never thought of applying for the Canada child benefit. This meant that she was able to get $80,000. Some of our programs do allow people to receive up to ten years of retroactive benefits. That money helps the most vulnerable people.

There is also work being done with the municipalities. You are right to point out that we need the contribution of the ministers of finance of all of the provinces, and of the mayors, to promote our government's programs so we make sure that people have access to them and are able to buy groceries and pay the rent.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister.

Thank you, Mr. MacDonald.

It's great to hear stories about people getting the money they deserve.

We're going over to the Bloc and MP Ste-Marie, please.

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

Thank you, Mr. Chair.

Good morning, Minister. Thank you for being here. We are grateful to you, particularly since you have made changes to your schedule because of the vote, to stay with us for the full hour.

I also want to welcome and thank all of the assistant commissioners who are here with you for longer than scheduled, and also to thank them for all the work they do.

My question will be about the subject that was just addressed. We are currently getting a lot of calls in our constituency offices about deductions recently made from the Canada child benefit. Before the vote, I talked informally with some of your colleagues who are here. There are people calling us about this, as are groups that represent taxpayers, in particular the Associations coopératives d'économie familiale, the ACEFs.

We are being told that CRA had suspended repayments in October 2020 and things are now returning to normal. If there have been changes, deductions can now be made.

However, people and groups are telling us that they are not receiving information properly. The email may be going to the spam box, people may think it's phishing, or they don't always check their file online.

I know you are quite familiar with the situation, but I wanted to remind you of this communication problem. I also wanted to make sure that less well-off families, for whom getting lower benefits makes a big difference, can call the CRA to make an agreement.

Have I understood correctly?