Government Operations Committee on Feb. 15th, 2018

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

For several years, we've seen additional money having to go in to try to address the backlog, yet the backlog remains. Is there any...?

[Renée LaFontaine]

I think that's probably happening at the departmental level, depending on the backlogs experienced by each department. Hopefully, when we get into the position where we are proactively disclosing things, departments can organize themselves not to wait for a request but to put it out there so that Canadians can go and help themselves.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

There's additional funding for operational pressures related to the Government of Canada's pay system for the CRA. This is for the CRA to deal with all of the anticipated additional assessments, reassessments, and appeals, and all the problems that are expected to be generated from the general fiasco that is Phoenix. Is that correct?

[Brian Pagan]

That's correct. For instance, there's been an increase in call centre volumes for calls on tax issues from employees affected by Phoenix. This provides additional resources for CRA to address both the call centres and some of the processing and audit work related to this.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

The Auditor General, in his report on Phoenix, commented on the general lack of preparedness and that the resources that have been contributed to deal with this problem have not been adequate thus far. Do we think this is going to do it or are we going to be here next year with longer backlogs and addressing an ever-compounding problem? Does this reflect, do you think, the true need for additional resources?

[Brian Pagan]

This addresses the needs identified to respond to the problem for this year. There is a multi-year plan in place now to resolve Phoenix and the requirements for future years to support that plan will be presented in the main estimates or supplementary estimates next year for those future requirements.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

The 40,000-odd employees at CRA are not part of the Phoenix pay system. Is that correct? Did I get that correct from Ms. Santiago?

[Marcia Santiago]

They're not served by the pay centre directly, no.

[Renée LaFontaine]

Right.

[Marcia Santiago]

They have their own pay advisers.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

That's fine.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you very much.

We go to Mr. Peterson for five minutes, and that's the last round.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Madam Chair, and thank you again, witnesses, for being here today

I know that there are a lot of things being balanced right now. You're shifting from the old system vis-à-vis timing into the new system, so we have two streams happening at once, but it's good to see that the legacy system is being maintained while we're implementing the new system to make sure that there are no gaps in service. I think that's to be commended, but I know it gives you a little bit of extra work to do. I appreciate your being here. I only have five minutes, but I have a number of questions.

There is more to the new system I think than just the alignment, of course. It's also the transparency component, I'll call it, and a lot of that has to do with the reporting and information. Really, to get the full picture, someone would have to drill down into the numbers. The departmental plans are really just a segue into those numbers. I want to talk about InfoBase. Does that allow the public to look at these expenditures, if they're so inclined, and have access to the same numbers that we have here at the committee?

[Brian Pagan]

In fact, InfoBase presents information not only about what you see here in this document, but also allows stakeholders to drill down and get a great deal more information, including FTEs or employees working on specific programs, where those employees are located, the NCR versus the regions. We have demographic data about those employees, so you can see an age band and distribution.

Most recently, to Mr. Drouin's point about always striving to do better, there have been incremental adjustments to InfoBase. In November of this past year when the departmental results reports were tabled that support the final accounting of actual expenditures in the public accounts, we added to InfoBase, for the first time, results information that show departmental progress against their commitments. These are both quantitative—we achieved a 95% response rate—or qualitative, depending on what the target had been.

I thank you for your interest. The president is very keen on popularizing InfoBase and making sure that it's out there and, as I say, we actually aspire to the point where it is so comprehensive that it makes my appearance here redundant.

We did present this to a Senate committee last year and we would be happy to come back and provide a demonstration of that tool, if the committee were interested.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

As one member, I'd be interested in that. I'll defer to the will of the committee on that, of course, but I appreciate the insight.

I have a specific question. I don't want to dwell on the Canadian Armed Forces benefits, but with this increase in claims, do you foresee an increase in premiums?

[Renée LaFontaine]

Yes.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Who pays the premiums now? It's the employer, I take it, the forces.

[Renée LaFontaine]

There are various categories, but on average, the employer pays about 95% and the CAF members pay about 5%.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Right, so with the increased claims, we're either going to have to fund the reserve or pay for more premiums.

[Renée LaFontaine]

Yes—

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Either way, it's going to cost the government more money.

[Renée LaFontaine]

I think we'll be back at this table for the main estimates, or following the supplementary estimates, once we get an estimate of what the new premiums should be to make sure it maintains its stability.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you for that.

I have just one more specific question, and it has to do with the write-off of unrecoverable Canada student loans at $203.5 million.

When we say “write-off”, first of all, are we selling our debt to any third parties to collect it at this point?

[Brian Pagan]

In fact, the Canada student loans program supports 500,000 students who receive benefits, and it costs about $2.7 billion to $2.8 billion annually. The total outstanding loan portfolio as of March 31, 2016, was $18 billion, and the average loan at graduation was just over $12,000.

The way the loan repayment works, this government introduced changes in budget 2016 so that if you're earning less than $25,000, we don't try to recover the loan until you're earning a working wage, and then debt repayment schedules are negotiated.

If someone falls into default, there is a process with the Canada Revenue Agency in which, over a six-year period, we try to recover that debt. Only after six years, if we've been unsuccessful in recovering the debt, do we write it off. That's not the same as debt forgiveness. We're not forgiving the debt. We're simply removing it from our books. This is in keeping with accounting standards and an agreement with the Auditor General, where we want to project our real liabilities and the real likelihood of recovering costs.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you very much. This brings us to the end of the first round.

I thank the witnesses. I think there are a couple of questions that have been posed for which you will be sending information back to the committee.

We will suspend for a minute and return ASAP because the minister is here, and I'm sure everybody wants to ask him questions.