Government Operations Committee on May 6th, 2008

[Lysanne Gauvin]

No, you're not misreading the map. That is entirely correct. We do not at the current time have full-time employees in the territories. But that doesn't mean we don't have a presence. During tax season and prior to tax season, we send up teams that do outreach to various communities. We do have teams that go up during the course of the year to undertake audit, trust exams, or our regular activities. People live in small communities, and they tend to be aware that we're there.

HRSDC also has its service centres, and we do have information available through pamphlets and what not in the service centres that HRSDC has in the territories.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you.

I want to pick up a bit on this concept on page 4 of your notes today. You mention a compressed work schedule, and you just started to identify a bit about what that might mean or what it would look like. I'm not an HR person, so could you give me a couple of examples of what a compressed work schedule would be? Is it somebody working 12 or 16 hours a day and then only working three days a week, or what kind of alternatives are there?

[Lysanne Gauvin]

No, we don't typically do that. Generally speaking, an employee will work some additional time during the course of each day in order to be able to have a day off once every three weeks or once every four weeks. In some instances it's once every two weeks, but my sense is that it's more typically a day off once every three weeks or once every four weeks. So they add just a bit of extra time to each of their work days in order to be able to do that.

We also have what we call leave with income averaging. It has to be preplanned, and it has to be done with the approval of the manager. But employees might decide they want to take six weeks off in the summertime, so they'll plan when they want to take that off, and then fundamentally they take a reduced rate of pay during the course of the year so they still get some pay during that six-week period when they're off. And again, it varies a little bit by region, but nationally last year about 9.5% of our employees availed themselves of that type. And they do it for personal reasons. It could be for elder care, for children, or just for having extra time off to rejuvenate.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

I think that's a very innovative approach. I know that a number of school boards are offering an 80% salary over a number of years, and then the teacher could take a year off or something to that effect. I applaud that.

This question isn't related so much to the geographic distribution or retention rates, but you mentioned auditors in your report. A question I have is related to auditors. How does CRA decide when to proceed with an audit? Is it random? Is it based on complaints or tip-offs? How are those decisions made? That may be out of your area.

[Lysanne Gauvin]

It is not part of my area of responsibility. We can take the question back and have somebody write a response.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

I don't have anything specific in mind. It was just a general question that came to mind as I was reading through that, and it would be interesting. For example, what are the criteria upon which an audit is initiated? And then secondly, once an audit is deemed necessary, what period elapses from the time it's identified until the audit begins and is eventually concluded?

I ask it in the interest of all taxpayers. We're all penalized in some sense when this very small number of Canadians chooses to circumvent the tax system. I think it's important that Canadians are assured that there is an effective audit mechanism in place and people are paying their fair share of the tax burden, which does provide for us the services we've come to expect and enjoy.

[Lysanne Gauvin]

Absolutely. I couldn't have said it better myself, to be honest with you. But we will take that question back and provide you with some information. That really isn't my area of expertise, and although I have some knowledge, I wouldn't want to say things that are incorrect.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Those are all my questions. I don't know whether any of my colleagues want to share my time.

[The Chair, Liberal, Diane Marleau]

We'll hear Mr. Kramp for a couple of minutes.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

In slide 11 of the deck of slides, “Percentage of Employees on Leave With Income-Averaging by Region, I find there's quite a variance: headquarters, with 3.8%; Quebec, with 13.6%.... We're talking about an almost 8% difference.

Why would we have such a variance of employees on leave? What's the explanation for it, region to region?

[Lysanne Gauvin]

It's a really good question, and I don't really have a good explanation.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I'm assuming it's paid leave.

[Lysanne Gauvin]

Yes. This is the income averaging. That's right.

Some of it, I think, might be driven just by employees' knowledge of what's available to them in terms of options.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I'm concerned that this variance is quite a significant dollar output. I would make a suggestion that possibly either our committee or perhaps you could define this issue a little more clearly in the future. Perhaps you could do a little more investigative work to see what we could come up with, because to me that's not acceptable without some form of logical explanation.

[Lysanne Gauvin]

There's no dollar impact; there's no salary impact. What happens is that the employee.... Let's say I decide I'm going to take two weeks of leave with income averaging. I get a lower salary during the rest of the year to cover off that two-week period.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

But who's covering for you? We're still paying more people. Why are we having such a discrepancy in some areas versus the others?

[Lysanne Gauvin]

Oh, I see what you're saying; I understand. Okay, we'll take that back.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Here is a question, maybe a bit of a blindsiding, but not intended at you here. Would you have any idea what percentage of undeclared income is out there? How much of the economy would it be? Is it 5% or 30%? Do you have any guesstimates?

[Lysanne Gauvin]

No, I don't. I'm sorry.

[The Chair, Liberal, Diane Marleau]

My understanding is that they speak of something around $18 billion or so, if you read any of the reports.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I'm just wondering whether there has been any conversation within your department that you wish to share with us—

[Some hon. members]

Oh, oh!

[Lysanne Gauvin]

I'm sure there have been conversations, absolutely, but I really don't know what that number is.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Okay, that will be enough for now. I'll get into more later.

[The Chair, Liberal, Diane Marleau]

Thank you.

Mr. Angus.