Evidence of meeting #7 for Public Accounts in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was debt.
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
No. Like in all portfolio accounts, we have less than a year, one year, two year, less than two, up to five, and more than five. So there are various size of debts and various agings of debts in the report.
Liberal
Liberal
The Chair Liberal Shawn Murphy
Your time is up, Mrs. Ratansi. Thank you very much.
We're going to go now to Mr. Lemay. Huit minutes, s'il vous plaît.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chairman.
Thank you, Ms. Fraser. We have met several times over the past few weeks. Everyone is very interested in all your reports.
I would like to start by asking a question of the person representing the agency. Each year, the agency collects $332 billion in revenue. I do not want the exact figure because there is a danger of excommunication, but roughly how many clients—I suppose that is what we are called—does this represent? If you include corporations, do we have an idea of the approximate number?
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
I will give you a rough idea, because the number fluctuates all the time. In Canada, some 23 million individuals fill in an annual income tax return which is also used to calculate benefits for the child tax credit and for the GST tax credit. There are approximately 1.5 million employers and a similar number of corporations in Canada. There are also 2 million or more entities registered for the GST that send us in amounts of money and complete returns varying in frequency depending on the area of activity.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
I did not have time to note down all the figures. Can you send us a brief summary to tell us what these numbers include?
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
I believe this information is already included in our annual report.
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
They should be there. We will ensure that they are.
Bloc
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
No.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
So we have to add the roughly 2 million companies, the entities registered for GST purposes, etc.
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
Yes.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
What I'm interested in is the total number of files you process. How many would it be, 30 or 40 million?
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
You're asking how many accounting transactions we have with taxpayers. There are a number of dimensions involved. A number of accounting entries are made for each taxpayer.
Let me give you a rough idea. For example, for employers, we have some 11 million transactions that generate some $160 billion.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
Let us take the case of an ordinary person like myself, like all of us. I have to complete an income tax return every year. I do that , I receive what is called a notice of assessment, which shows me that I paid everything that I was supposed to. Six months later, I get a new amended notice of assessment which states that my file has been audited and that I had neglected to pay $1,284.32. I'm giving you a hypothetical case here that is not my own; I hope you will not be calling me up tomorrow morning.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
I would like to know when the recovery principle comes into play. Is it 30 days after receiving the amended notice of assessment? What is the procedure at the agency?
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
I will take the case of an individual, since that is the one you mentioned. Generally speaking, people complete their income tax return and the notice of assessment is issued. If an amount is owing, this will appear on the notice of assessment. Individuals have 90 days to appeal or to file a notice of objection to the notice of assessment. No legal collection procedures can be undertaken during those 90 days. However, on the 45th day, generally, the account is brought to the attention of our risk management system. At that time, you will get a first collection letter. After 45 days, we are going to start thinking about calling you. We make outgoing calls from our call centre located in Ottawa. So you would no doubt get a call from our call centre and we will try to convince you to pay the amount owing. If the amount is not paid within 90 days, the account is transferred to collection agents located in our local offices.
Bloc
Assistant Commissioner, Taxpayer Services and Debt Management Branch, Canada Revenue Agency
The process stops until the notice of opposition is dealt with. No collection measures are taken unless the account is very high risk. In that case, we can go to a judge, to a court, to try to convince it to cancel your rights and to allow us to take forced recovery measures. We would do that if you were about to leave Canada, for example, or if we had some indication that there was really a danger that we might not recover the amount.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
I paid careful attention to what Mr. Baker and Mr. Proulx had to say, Ms. Fraser. In 1994, the GST was introduced. Why was there a 10-year wait before anyone checked whether your 1994 recommendations had been followed? Were you waiting until the GST was firmly in place or did you simply have other things to do?
Auditor General, Office of the Auditor General of Canada
May I add something with respect to your first question. I would just like to state that when we talked about $18 billion in collection accounts, that referred to non-challenged accounts. Accounts where an objection has being filed represent an additional $6 billion. The audit focused on accounts where there was no notice of objection.
With respect to your last question, I would say that the reason is simply that we had a series of audits to do with the agency and at the Department of Revenue at the time. Given the scope and complexity of the operations, it took some time before we got back to the collection service. That was not necessarily because some systems have been put in place, but rather because that was in keeping with the work plan.
Bloc
Marc Lemay Bloc Abitibi—Témiscamingue, QC
I read the notes I received. What concerns me is the fact that a number of these debts date back more than two years. I was a lawyer in an earlier life and I know that if clients do not pay immediately, the more time goes by, the less likely it is that they will pay at all. That is my experience from the legal profession.
So what is done? What did the agency do to try to recover these amounts that date back over two years?
