Finance Committee on March 30th, 2023

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

Yes, the CRA's objective is to support people and businesses. The way we do things is client-focused, and because we work on a case-by-case basis, we encourage people to call the Canada Revenue Agency to enter into agreements. As I said, we really work on a case-by-case basis with clients.

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

Thank you for your very clear answer.

I am going to address another subject.

SMEs in our ridings are calling us—SMEs of accountants or accounting technicians who are doing tax returns. They ell us that as in all sectors of the economy, they are being hit by the labour shortage. We know that during tax season, employees in these firms work crazy hours, seven days a week, from morning to night. Even with those extended hours, they say they are not able to meet the demand. They suggest that the period for filing and sending tax returns be extended. For example, the period could be extended by a month.

Could you consider that suggestion given the labour shortage in this sector?

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

People have spoken to us about this already. During the pandemic, we extended the tax season, as an exception, until the end of September. After that, however, it is important that the CRA get back to the usual dates. There is a big job to do at the CRA when it receives the returns. We also have to be able to adapt, since, as we know, for the guaranteed income supplement and the Canada child benefit, the adjustments are made on July 1. Because of these constraints, the same parameters have to be adhered to.

However, we are aware of the information you are giving us.

We are familiar with the labour shortage. I am also well aware that the big accounting firms are currently working with businesses, so individuals are going to have problems sooner or later. They are working with tax preparers.

There are internal discussions at the Canada Revenue Agency, but also discussions with partners to find solutions. I also share this concern.

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

Thank you for your answer, once again.

I am now going to talk about CERB fraud. At the beginning of the pandemic, given the urgency of helping people, the program was put in place quickly, and for the first few months, identity checks were cursory. That resulted in a lot of fraudulent applications.

When we asked you questions about this, in order to follow up, you quite rightly told us that it was too early and you were looking into the subject. So I would like to know whether you now have any news to give us.

What was the process for dealing with identity theft? How many cases might there have been? How many cases have been resolved? Where do we stand in this regard?

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

Before I turn the floor over to the officials, I would first like to say, as was said during the pandemic, that the people who were victims of identity theft will not have to repay the money and will not be penalized. That is, in fact, part of the work we have to make sure we do. This is very clear to me and to the government.

Now, regarding administrative follow‑up, I'm going to turn the floor over to Mr. Lemieux.

[Marc Lemieux, Assistant Commissioner, Collections and Verification Branch, Canada Revenue Agency]

Thank you.

Mr. Chair, a lot of work has indeed been done to assist Canadians who have been victims of identity theft.

People need only call us at the CRA so that we can start the process, validate their case, and make sure their file is updated at the agency. This way, we will be able to correct the situation so they are not required to repay a debt caused by identity theft.

We have invested a lot of resources so we can offer these services. We have also changed our internal processes. Now, when someone calls us, we can put them in direct contact with a CRA employee who will take charge of their file and give them information.

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

Do you know how many cases?

[Marc Lemieux]

We reported to the committee earlier and I think we had found 26,000 cases of this nature.

If we compare that to the nine million applicants, it is still a relatively low percentage, but we are dealing with those 26,000 cases.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

We'll now go to the NDP with MP Blaikie for six minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you, Minister.

I also want to thank the CRA officials for being here today.

Welcome to the committee.

I would like to come back to the Canada child benefit and the overpayments that CRA is starting to recover.

Do you know what percentage of these cases is attributable to a wage that was too high because of CERB payments?

How many of these cases are actually connected with recovery of CERB payments because those benefits meant that a family or a person had too high a wage?

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

Mr. Chair, I really want to reassure my colleague regarding the fact that Canada child benefit payments between the end of the pandemic and the start of debt recovery work are being used only to repay Canada child benefit debts. They are not being used to repay CERB.

CERB is a completely different thing.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I know that receiving CERB changed some people's eligibility for the guaranteed income supplement.

I am therefore wondering whether there isn't something similar here.

Families had higher income because it included CERB payments. Those families ended up with overpayments of the Canada child benefit because they were not entitled to the same level of support from the Canada child benefit.

Are the CERB payments not the cause of that overpayment and the current debt recovery?

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

I would say that for the debt connected with the Canada child benefit, the debt recovery period stopped during the pandemic. The recovery work resumed in the fall and, as I said, we are not using the Canada child benefit to repay the CERB.

Ms. Pranke may want to add something on the technical aspect.

[Gillian Pranke, Assistant Commissioner, Assessment, Benefit and Service Branch, Canada Revenue Agency]

In response to the question about whether the Canada recovery benefit or other COVID benefits can have an impact on the amount that a recipient would ultimately receive for the Canada child benefit, the answer is, yes, they could have an impact. It's calculated based on adjusted family net income and other factors such as the number of children. If there is a change in the individual's family income earned, it could absolutely have an impact on the amount of the Canada child benefit somebody would receive.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Those double payments could very well have been caused because people received a pandemic benefit and it reduced the amount they would be entitled to under the CCB. Now that's being recovered.

We know from the GIS, for instance, that seniors weren't warned when they signed up for the pandemic benefit program that it could have an impact on their GIS eligibility in subsequent years. Families are in a similar situation. The debt recovery that's happening now is effectively.... What happened to seniors—which we did manage to finally get fixed a while ago—is now happening to families as they realize their eligibility for pandemic support programs in a time of great need did at some time affect the level of support they received under other programs. They weren't made aware at the time of what those future impacts would be, so it was not possible for them to budget for what they didn't know about.

I'm concerned about the impact this is having on families that are now surprised at the impact it had on other benefits they depend on to put food on the table. Of course, this is not a good time for families to be surprised by shortfalls in their budgets.

The budget talked a bit about supplementary resources for ESDC. I know that's not your department, but it is for integrity checks on pandemic benefit programs. There have been hundreds of million dollars allocated in the past for integrity checks and follow-ups on pandemic programs. I think with the $50-odd million that's dedicated in this budget, we're in the neighbourhood of $300 million to $350 million now in supplementary funding that government has requested of Parliament for debt recovery.

There's an estimated debt amount for CERB programs of about $3 billion. I understand that it's not necessarily a final number and that this number is a running tally of the department as it resolves files. I'm wondering how the agency has not yet conducted a bird's-eye view analysis of all of those CERB files to know, say, the salary profile.

Also, has the CRA looked through all of the cases to flag which ones they think are cases of fraud? If so, why would they not have collected data along the way to know how much of the extant debt is made up of low-income folks versus high-income earners versus people we think committed identity fraud?

Can you provide us with a breakdown of the debt you think you're owed and who owes it? I don't mean individuals necessarily. We're looking for some demographic profiles.

[The Chair, Liberal, Peter Fonseca]

MP Blaikie, we're well over the time. If anybody has a short 10-second answer, that's great, or if you could get the information to the MP and the committee, that would be great too.

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

I would like to tell my colleague that during the pandemic, the Canada Revenue Agency devoted all its energy to providing support programs for Canadians.

Now, we have started the audit work, but it isn't finished yet. We still have enough audits to do for the next two years.

I think that giving you figures right now is not necessarily the best thing to do, because as we move ahead in the auditing and the agreements we make with people, things are progressing and I would not want to give you false information.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister.

Minister and officials, we are moving into our second round of questions, so timing is a bit different.

We're starting with the Conservatives for five minutes.

Go ahead, MP Hallan.

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

Thank you, Mr. Chair.

Minister, thank you for being here today.

Today, during this holy month of Ramadan, I'm thinking about the great work done by our Muslim brothers and sisters, especially ones in Muslim-led charities. These are some of the groups of people that first respond to any tragedies that happen or that step up for our most vulnerable.

Given that, Minister, why do Muslim-led charities feel like they're being discriminated against by you and your department?

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

I would like to tell my colleague that work is being done at the Canada Revenue Agency with Muslim organizations. In fact, I asked the ombudsman for a systemic review a year and a half ago. The report was submitted last Monday and the work is continuing.

The CRA has representatives who sit on the Advisory Committee on the Charitable Sector. This year, there are two people representing Muslim organizations. As a result of the collaboration between the CRA and charitable organizations, it was suggested that we bring representatives of charitable organizations to the table. The National Security and Intelligence Review Agency, the NSIRA, is currently pursuing its efforts to do all the work that is done with charitable organizations.

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

Respectfully, Minister, I have only a bit of time. I just want a yes-or-no answer on this one. Do you recognize there's a systemic problem within your department that makes Muslim-led charities feel as though they're being discriminated against? I just want a yes or a no.

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

What I can tell you is that at the CRA, we have to continue to work on the issue of systemic racism.

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

Okay. Thank you.

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

I think we can always do better, regardless of colour, regardless of race, and regardless of religion.