Evidence of meeting #2 for Public Accounts in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

John Wiersema  Deputy Auditor General, Office of the Auditor General of Canada
Rod Monette  Comptroller General of Canada, Treasury Board Secretariat
Bill Matthews  Executive Director, Government Accounting Policy and Reporting, Treasury Board Secretariat
John Morgan  Assistant Comptroller General, Financial Management and Analysis Sector, Treasury Board Secretariat
Douglas Timmins  Assistant Auditor General, Office of the Auditor General of Canada

4:15 p.m.

Deputy Auditor General, Office of the Auditor General of Canada

John Wiersema

There is another body, called the International Public Sector Accounting Standards Board, IPSASB. In fact, the Auditor General of Canada is a member of that board.

The Canadian standards setting board has not yet made a decision to converge towards international accounting standards, so in Canada we still follow domestically set accounting standards. We have not yet made the decision to converge towards those international standards set by that international board, but I think it's possible that decision might be made at some point in the foreseeable future.

4:15 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Thank you very much.

4:15 p.m.

Liberal

The Chair Liberal Shawn Murphy

Thank you, Mr. Saxton.

Mr. Christopherson, you have seven minutes.

February 5th, 2009 / 4:15 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Thank you very much, Chair.

Welcome to all assembled. Here we go again.

This is somewhat removed, but it concerns a comment Mr. Monette made when page 8 was up. Indulge me; it's related.

When you were referring to tax revenues over the last couple of years, the report we have here shows 46.7% and 46.8% respectively for the percentage of revenue that comes from personal income tax. On the corporate side, it's 16.7% and 16.0% respectively. So the contrast in 2007-08 is that 46.7% of all tax revenue comes from personal income tax, 16.7% comes from corporate taxes, and you made the statement that it's fairly constant.

I'm assuming that you mean “fairly constant” in the modern economic era. This is where I'm seeking help from anyone here who can answer. It seems to me you don't have to go back too many decades to when it was actually reversed. There was actually a time when we received more money from the corporate side than we did on personal income tax. Is that correct?

4:15 p.m.

Comptroller General of Canada, Treasury Board Secretariat

Rod Monette

Thank you for that clarification. My comment is that I'd looked back the last probably seven or eight years or so--

4:15 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Yes, that's what I thought.

4:15 p.m.

Comptroller General of Canada, Treasury Board Secretariat

Rod Monette

I saw it was around 47% over the last seven years.

4:15 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

And I'm talking decades, I know, but is what I said accurate? If you go back a handful of decades you start to get to the point where there was that...?

4:20 p.m.

Comptroller General of Canada, Treasury Board Secretariat

Rod Monette

Mr. Christopherson, I don't actually have the figures at that time. We could probably try to get that for you.

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

If you would. It's a side thing, but it just seems to me that more and more over the years.... The last budget--not this budget, but the previous budget--showed going into the future that there would be even more revenue, as a percentage, coming from personal income tax and a further lowering of the percentage from corporate taxes. Correct? I'll leave it with you to give me the information.

I don't want to put you on the spot; it wasn't a trick question. But I looked at this and I recall reading not that long ago and understanding that at one time corporations actually paid the majority of the revenue of Canada, and now we're almost at the point where it's personal, and the difference between 46 and 16 is huge. As I say, the last budget of the current government sends us even further into that trend line, which some of us would argue is not all that healthy.

If I might, I'm going to read this from volume I, page 2.37, the chart you referred to in your opening comments, the second box, Canada Border Service Agency: “This manipulation of data”—and you're going to explain to me what “this manipulation of data” means—“involves complex and cumbersome manual processing and reconciliation. These nonetheless fail to explain differences between the amounts receivable in the general ledger and the various reports taken from the tax program systems in support of the reported amounts. Management of Canada Border Services Agency has identified underlying causes of some of their unreconciled differences. However, unexplained differences remain at year-end.”

Please explain “unexplained” for me.

4:20 p.m.

Deputy Auditor General, Office of the Auditor General of Canada

John Wiersema

Mr. Chairman, I'll ask Mr. Timmins to respond to that.

4:20 p.m.

Douglas Timmins Assistant Auditor General, Office of the Auditor General of Canada

Thank you, Mr. Chairman.

This basically relates to the fact that the accounting records they have for revenues deal with what we would call a sub-ledger system, and the sub-ledger system doesn't necessarily always reconcile--

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

That's not a two-book system. That's a--

4:20 p.m.

Assistant Auditor General, Office of the Auditor General of Canada

Douglas Timmins

It's not two books, but it ends up that there are problems with all the complexity of the entries going into what we call the sub-ledger system and what would go into the general ledger system or the consolidated revenue fund. So they have to go through and analyze that and find out what those differences are, and at the end of the day they can't explain them all. So we continue to put pressure on them to find out what is the cause of the discrepancies that are not reflecting properly between the sub-ledger and the main records.

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Okay. When we get too detailed I don't pretend. I'm not an accountant by any stretch. But are you talking about money that can't be identified? Is there missing money, or is this really a detail of your profession, or is there a real legitimate question of where some money is or went?

4:20 p.m.

Assistant Auditor General, Office of the Auditor General of Canada

Douglas Timmins

I don't believe there's a--

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

You don't believe? Give me something a little more clear than that.

4:20 p.m.

Assistant Auditor General, Office of the Auditor General of Canada

Douglas Timmins

I think all of the revenue.... We're quite confident that the revenue they collect gets deposited. There are no issues there. So I think it's an accounting reconciliation issue that they need to figure out why--

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Has this been an ongoing problem?

4:20 p.m.

Assistant Auditor General, Office of the Auditor General of Canada

Douglas Timmins

Yes, it's--

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

For how long?

4:20 p.m.

Assistant Auditor General, Office of the Auditor General of Canada

Douglas Timmins

Well, it actually would have been before, but certainly since--

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Since they've come into being.

4:20 p.m.

Assistant Auditor General, Office of the Auditor General of Canada

Douglas Timmins

Certainly since the border agency separated from CRA..

4:20 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

What's taken so long? Who answers that question? Why is this taking so long, please?