Government Operations Committee on May 11th, 2020

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I call this meeting to order.

This is meeting number 11 of the House of Commons Standing Committee on Government Operations and Estimates.

Before we start, I'd like to announce that the next meeting of OGGO is this Friday, May 15, from 11 a.m. to 1 p.m. For next week, we have yet to hear from our whips as to the schedule. If you recall, at our last meeting we talked about all committee members going to their respective whips to try to tell them whether or not they wished to sit and meet on Monday, May 18, which will be Victoria Day. It's a statutory holiday. If you haven't done so already, I suggest that you contact your whips and give them your preference as to whether or not you would like to meet on Monday, May 18.

Colleagues, in just a few moments, we'll convene the meeting officially. I have asked both ministers—Minister Lebouthillier and Minister Qualtrough—to keep their remarks to no more than six minutes each, rather than the customary 10 minutes. That will save us a bit of time.

I'm also asking this of witnesses, ministers and committee members. If you begin speaking in one official language, please complete your remarks and all questions and answers after that in the one language of your preference. That way, we won't have to flip back and forth between languages. From a technical standpoint, it should then go much more smoothly.

When we get into the questions and answers, colleagues, we normally start a little late, particularly in the first hour, because of the technical issues we have to go through. As a consequence, we never seem to be able to complete a full round. Having said that, what I'm suggesting for this first hour is that we amend the question period so that the first round will be for five minutes each, the second round for four minutes each, and the third and final round for two minutes each, which should allow us to get every member involved and hopefully get answers for your questions.

With that, colleagues, I will now turn it over to Minister Lebouthillier for her six-minute opening statement.

Minister, the floor is yours.

[Diane Lebouthillier, Liberal, Minister of National Revenue]

Good afternoon, Mr. Chair.

Thank you for this invitation to tell you about the work of the Canada Revenue Agency in supporting Canadians during this unprecedented time. The work you are undertaking on government measures to support Canadians in response to the COVID-19 pandemic is very important.

I am pleased to be accompanied today by the commissioner of the Canada Revenue Agency, Bob Hamilton, and three members of the agency's senior management: Frank Vermaeten, assistant commissioner, assessment, benefit and service branch; Geoff Trueman, assistant commissioner, legislative policy and regulatory affairs branch; and Ted Gallivan, assistant commissioner, compliance programs branch.

Since 2015, I have focused on improving the service delivery that is offered to Canadians. This means the agency and I place Canadians at the centre of all our priorities. We recently launched our People First philosophy and it is the pillar of our new service model. This philosophy is a key element in the agency's response to implementing the emergency economic measures.

Driven by the People First philosophy, agency employees have been working hard to support Canadians during the COVID-19 pandemic. In addition to taking part in an impressive mobilization of human resources in the field, we are also seeing a significant increase in the technology being used every day to serve Canadians in an even more accessible, efficient and rapid manner.

Allow me to give you an overview of the CRA's work over the past eight weeks. The agency started by realigning its efforts in order to be more efficient during this crisis. Then, on March 18, it announced it was pushing back the tax filing deadline for individuals, corporations and trusts, thereby relieving Canadians of that burden.

In the same spirit, the agency also announced the temporary suspension of the vast majority of audits. The agency then worked quickly to implement the government's various economic measures. First and foremost: the Canada emergency response benefit.

As I am sure you know, the agency is responsible for a significant part of administering the CERB, and the CRA is fully responsible for administering the Canada emergency wage subsidy, CEWS, as well as the Canada emergency student benefit, the CESB.

Regarding the CERB and the CEWS, I am especially proud of how quick and easy the application process is for Canadians. And I must emphasize that the amounts are paid promptly. In fact, most people receive their payment by direct deposit within three business days—sometimes even two days.

We have also demonstrated significant technological capacity, which is very impressive when you consider the online services were set up in just a few weeks. When the CERB was launched, the agency's system registered 30,000 applications in 12 minutes. Since April 6, the agency has reviewed and processed nearly 7.5 million CERB applications, for more than 4.45 million individuals.

I am very proud of the agency's incredible work under these circumstances. In fact, the media described the technological implementation of the CERB as a “small miracle.” This miracle would have been impossible without the exceptional cooperation between the agency's public servants and those from Employment and Social Development Canada.

On April 27, the agency deployed a new economic measure, namely, the Canada emergency wage subsidy. Again, everyone pitched in to make this application process a success. To date, the agency has received over 128,000 applications for the wage subsidy.

Finally, the agency will soon be able to launch the Canada emergency student benefit, the CESB. Students will soon be able to submit their application through the agency portal and the My Account service.

The CRA was able to mobilize a lot of people in the blink of an eye, starting with the agents at its call centres. To keep up the pace, the agency also reassigned many employees to new duties. A total of 7,500 employees answered a call to lend a hand to the call centres. Of course, while all this work took place, the CRA also made sure that appropriate compliance measures were put in place for all applications for emergency financial assistance.

Ensuring compliance is an essential part of the agency's mission. We are committed to preserving the integrity of our Canadian tax system. In this regard, the agency developed strict auditing measures—electronic and manual—and several safeguards for claimant eligibility, refund terms, and even tax loopholes. You can rest assured that offenders will face severe consequences, up to and including imprisonment.

Mr. Chair, this pandemic continues to have a terrible impact on many of our fellow citizens—not only on their health, but also on their economic well-being. However, I am proud of the efficiency with which the entire government has mobilized in recent weeks to support Canadians. As the saying goes, “When the going gets tough, the tough get going.” I can proudly tell you that agency employees have shown that they are, indeed, very tough.

I am now ready to take your questions. Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Minister.

We will now go to our five-minute round of questions, starting with Mr. Morantz.

Mr. Morantz, welcome to our committee. You have five minutes, sir.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair. I'm delighted to be here.

Thank you, Minister, for being here.

You've described your programs as being miraculous, but of course not everything is coming up roses. Is your agency aware of any individuals who are currently collecting the emergency benefit, the CERB, but who should not be, because they are not eligible?

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

Thank you for your question, Mr. Morantz.

The Canada Revenue Agency's priority was to ensure that Canada emergency benefit payments would be delivered quickly and efficiently to eligible Canadians. As with all other benefits administered by the agency, we may undertake audit activities at a later date.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

With respect to eligibility, can you advise us as to how many prisoners in Canadian prisons are currently receiving the $2,000-a-month CERB benefit from your agency?

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

I'm sorry, Mr. Morantz, I didn't quite understand your question.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Minister, there have been reports of prisoners in Canadian correctional institutions receiving CERB payments who are not eligible to receive this benefit. Are you aware of this? How many prisoners across Canada are receiving the CERB payment?

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

We are currently experiencing a historical situation like we haven't seen since the Second World War. As I was saying, the important thing for the Canada Revenue Agency was to ensure that Canadians receive benefits to help them get through the current crisis. I can assure you that the agency has mechanisms in place to recover the money that will need to be recovered.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I know there was no answer to that question, so I'll move on, Mr. Chair.

With respect to the social distancing regulations that are in place, it's difficult now for Canadians, particularly seniors and others who still file with paper forms, to get tax information to their preparers. Will you direct your agency to extend the tax filing deadline beyond June 1 to allow Canadians more time to file?

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

Our government understands that Canadians are going through a very difficult time. We are here to support them. That is why we have announced a series of measures, including extending the deadline for filing income tax returns to June 1, 2020. We continue to monitor the situation and developments very closely and are currently working on solutions that will be communicated to you shortly.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'm glad to hear that an extension is not off the table.

Recently we've been hearing from Canadians who filed their tax returns with paper T1 forms that they are experiencing extreme delays in receiving their refunds. When will these Canadians who filed paper forms have their returns processed?

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

Mr. Chair, all of the agency's teams are mobilized to give effect to the emergency measures that need to be made available to Canadians. As I mentioned, the agency reached nearly 7.5 million Canadians.

We continue to process tax returns, whether paper or electronic, so that people receive their benefits and the money they are owed as quickly as possible.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Minister, I contacted your agency, and they indicated that delays are to be expected and that they could not provide a concrete timeline. Canadians who file by paper need to have their refunds, particularly to help them during this crisis.

Can the minister confirm how long it takes your agency to process a paper tax return and tell us the reason for the delays?

[The Chair, Conservative, Tom Lukiwski]

Minister, if I may interrupt, since there are only about 10 seconds left for your answer, I would request that you provide that answer in written form. You can send that to the chair of our committee, who will then be able to distribute it to all committee members.

Thank you for your understanding.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Chair, I have a point of order—

[The Chair, Conservative, Tom Lukiwski]

We'll now go to Mr. Kusmierczyk for another five-minute round.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Chair, thank you very much. I will be splitting my time with my colleague, MP Jowhari.

Minister, thank you very much for your excellent testimony and your excellent report. Can you provide an update on exactly how many new, approved Canada emergency wage subsidy applications there are to date, whether the number matches the expectations we had for the uptake for that program and whether you have any feedback you can share?

We know that the CERB process was fairly simple and very straightforward. That's the feedback we heard. What are we hearing in regard to the CEWS program?

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

As I mentioned, we know this is a very difficult time for Canadian companies and their employees. Our government is doing everything it can to support Canadians.

The application process was launched two weeks ago. We have received over 127,000 applications since the launch. The majority of the companies are small and medium-sized enterprises.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you very much for that, but to follow up in terms of the feedback you're receiving regarding the application process, what are you hearing from the businesses that are going through the application process? Are they finding it fairly straightforward, as folks are with the CERB, or are there any challenges you're seeing?

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

I would like to say to my colleague that the companies that apply find the process simple. Indeed, the objective of our programs was to have simple and fast processes to be able to support all our companies.

If you'd like a little more technical detail, I could let the officials respond, either Mr. Gallivan or Mr. Vermaeten.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Yes, please.

[Bob Hamilton, Commissioner of Revenue, Canada Revenue Agency]

Mr. Chair, can I come into the discussion?

[The Chair, Conservative, Tom Lukiwski]

Yes, Mr. Hamilton. Go ahead, please.

[Bob Hamilton]

Thank you.

Just to respond quickly on the wage subsidy program, it's fair to say that it's a more complicated program than the CERB. As the minister indicated, the CERB was relatively simple in application, with a priority on getting the money out but also with proper verification to make sure that we catch up on people who don't deserve it.

In contrast, the wage subsidy covers a bunch of more complex business arrangements. One of the things we did in response to that was to engage with stakeholders as we were developing it, to find out some of the questions and answers that we needed to know in order to make it simpler for businesses to apply.

The feedback has been good from that perspective. I note that the CFIB has been very positive in terms of our ability to answer their questions, but there's no doubt that it's a more complicated program.

We've been quite satisfied so far. There is a lot of interest in the questions. The take-up is probably a little less than we thought it would be at this point, but we know from all the questions that people are still perhaps sorting out exactly how they will apply.