Thank you, Mr. Chair. My colleagues have already been introduced to members of the committee, and we're certainly pleased to be here today to discuss this chapter.
I'd like to say that the agency finds the observations made by the Auditor General to be pertinent and highly consistent with our own understanding of where improvements are needed to our program. We have agreed with all of the Auditor General's recommendations and have initiated activities to address each of them.
I did want to add some important context around the CRA's tax collection program, which is indeed large and complex, and recognized as such. I'd like to speak a little bit about accounts receivable and what they represent.
First of all, I think it's important for committee members to understand that fortunately the vast majority of Canadians pay their tax obligations when due. However, as in all public and private enterprises, certain accounts do become overdue and require the attention of our collectors. As of March 31, 2005, a little over a year ago, overdue accounts amounted to about $18 billion, as reflected in the Auditor General's report. This represents 5.4% of the $332 billion a year that the Canada Revenue Agency collects.
Accounts receivable represent taxes and duties owing at a given point in time. This is an inventory that undergoes considerable turnover as new accounts arrive and existing accounts are resolved.
Our field collectors collected some 440,000 accounts valued at $8.8 billion in 2004-2005. This is a marked improvement over prior years given that we were able to prevent further growth in our inventories.
Accounts receivable do not represent lost revenues. Instead they represent money owed to the government by taxpayers, the majority of whom will eventually pay the outstanding balance and associated interest. The $18 billion owed at the end of 2004-2005 included a significant number of new accounts, many of which have since been collected during the course of the 2005-2006 fiscal year.
We are pleased that the Auditor General noted certain areas of improvement that the agency has made since 1994 and also recognized some productivity gains associated with our collection efforts.
Cash collections from our workforce rose from $5.3 billion in 1996-97 to $8.8 billion in 2004-05. This means that each collector is now collecting $2.3 million of revenue per year, compared to $1.8 million in 1996-97. We've exceeded our Treasury Board cash commitments tied to the past influx of additional resources. Furthermore, from 1996 to 2005 the agency resolved some $80 billion in debt, which represents a significant portion of overall tax debts that came into the tax collection program inventory over that period of time.
Tax debts, unlike private sector debts, do not originate with clients we have voluntarily picked or chosen to extend credit to. This is noted in the Auditor General's report. This is an important difference, obviously, as it significantly affects our ability to limit risks, and this adds challenges to our capacity to manage and restrict growth in our portfolio of receivables.
The Auditor General's report mentions that while the agency has made improvements to the collection of tax debts since its last 1994 report, that tax debt continues to grow at a faster rate than total taxes paid. This is correct, although we were able to contain the growth in accounts receivable in 2004-05, and our results for 2005-06 are encouraging. We are dealing with complex legislation and complex systems.
Systems improvement and business transformation are continuous processes requiring a long-term vision and a high level of commitment. The challenge for the agency, as described by the Auditor General, is to turn our vision of an integrated revenue collection system and a more modern approach into reality through detailed planning, focused management attention, and measurement of results. I think we all agree on what needs to be done, and we believe we're well positioned to take on these challenges.
Those are the only opening remarks I wish to make, Mr. Chair, and I am pleased to take any questions.