Evidence of meeting #4 for Public Accounts in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was finance.
A recording is available from Parliament.
General Director, Tax Policy Branch, Department of Finance
Mr. Chairman, first of all, it is the Department of Finance the reference in paragraph 3.33 refers to. Second, it did not say that it was not a priority. It said that addressing those technical legislative deficiencies was not the department's only priority.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
We know that. Why did you find it necessary to say so? It is as if you were pushing the agency back too much. And now you are acting, because they are asking you to do so, when it should have been addressed a long time ago, since it has been so easy to do, it seems. It is a couple of months, and you are able to say that yes, we'll do it, and we now have the system and so on. Why was it not done before? That is what I cannot understand.
In this paragraph, I see that you told the Auditor General that you had other priorities.
General Director, Tax Policy Branch, Department of Finance
Well, in fact the budget and other things are among our priorities.
Liberal
Stéphane Dion Liberal Saint-Laurent—Cartierville, QC
I know that. Who doesn't know it? My point is that I don't understand why you felt the obligation to say so.
Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Let me try to answer that.
During these interviews that take place between the Auditor General and ourselves, we talk about many things. What the auditor decided to put in the report is, at the end of the day, the auditor's call. I think sometimes these things are taken out of context, and it's really important to understand that we just look at all of the things. We have many priorities and we work on all of them diligently.
But I'd like to answer the first part of your question, and I really do think that drawing your attention to page 10 of the Auditor General's report, exhibit 3.2, brings us to your question as to how we got to where we were.
I think that describes how we got where we are today. What we, the Department of Finance, are trying to do in that context is to find ways to work in the current environment and to take into consideration, without causing too much complexity to taxpayers out there, whether we could put forward draft bills for comment that don't amend the same sections of the act, that won't cause confusion. If we put smaller bills out, would that make it easier for those bills to move forward? Those are the things we're considering in the current environment, but how we got where we got is clearly shown by exhibit 3.2 on page 10.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Thank you.
I realize I'm being overly simplistic in my question here, but everybody files their income tax returns once a year. As such, they utilize our system and everything it has to offer. Would it be too much to ask for us to try once a year to put forward whatever amendments are necessary in bill form or in departmental form so that we can keep more current? Instead of trying to do 8, 10, 12, or 15 years at once and trying to fit everything into an omnibus bill where everybody has difficulties and it somehow, some way, gets caught up in the paralysis of Parliament, or departmental implementation, or technical capacity to do everything all at once, why can we not start to deal on a consistent basis with current changes?
Ms. Levonian.
Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance
I think that's part of what the Auditor General recommended we do. We accepted those recommendations and we are putting the systems in place to be able to address that, but I think there is only so much the department can do in proposing legislation to be moved forward.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
With the advancement of technology, there has been a real focus on people, a personnel focus. There's a lot of hands-on because it's required to make some pretty important decisions that automation and the advancement of intellectual technology don't necessarily address, because there are a lot of personal issues. But there has been a real move to adopt and embrace the technology, and I noticed that there has been some movement aggressively by CRA to adopt some of the new technology.
I can recall, three or four years ago, sitting in the government operations committee and the Auditor General recommending very strongly that we just had to move aggressively to adapt and adopt the new technology that would obviously increase our effectiveness and efficiency.
Can the CRA give me, and us on this committee, a bit of an update as to how you've been able to move, I would hope, aggressively and where you see yourselves as a department going in technical capacity improvements?
Commissioner, Canada Revenue Agency
CRA, as you know, is very heavily dependent on technology. Over the last number of years we've implemented a number of tools for businesses and citizens. For example, they can file their taxes electronically. We continue to see an increasing number of returns filed electronically each year. This year, we've also introduced mechanisms through which corporations and individuals can make payments.
An integral part of our services strategy is to continue to improve the services, both the applications themselves and the information that is made available for taxpayers' information, for example, on any changes. We continue to update our websites as well, and those are refreshed. For example, as soon as the budget was issued, our website was updated. So it's very much an integral part of our services strategy.
We continue to get feedback. We have online surveys. We're also using some of the newer mechanisms, the social media. We use tools like webcasts and what we call “webinars” whereby we can have 1,000 people across the country participating online and having interactions with our tax practitioners. So we continue to expand the electronic services we offer, and we generally get extremely good feedback from our clients on them.
In the case of the technical amendments in question here, we have also recently updated that electronic database so the legislative policy directorate will have an enhanced tool to ensure we're able to prioritize, do some reporting and provide some reports to our colleagues at finance, which will help with the implementation of the recommendations that the Auditor General made.
Liberal
The Chair Liberal Shawn Murphy
Thank you very much, Mr. Kramp.
Madame Faille, vous avez cinq minutes.
Bloc
Meili Faille Bloc Vaudreuil—Soulanges, QC
Thank you.
A little earlier, I asked some questions regarding the inventory that the Agency has established. What is the system you have put in place called? I am talking about the database that you have set up, as well as the measures.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
It's the technical issues database.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Yes, it is very simple.
Bloc
Meili Faille Bloc Vaudreuil—Soulanges, QC
If I understand correctly, there are technical measures, as well as anticipated revenue that could be generated thanks to this technical tool. Is that the case?
In your report, you indicate, in the system, the target revenue amount. You therefore have the technical tool as well as the amount you hope to receive if this tool is put in place.
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
If we did, then that was incorrect. There's a database that was intended to capture and help us manage the identification, analysis, and eventual, if you wish, filtering out of technical suggestions that eventually find their way over to the finance department, where they're picked up with a similar system. That's distinct from the advance income tax rulings process. So I don't know if those two may have been blurred.
Where there is a technical issue, we have seven or eight criteria we go through within the agency when we're assessing whether or not a recommendation for a technical change would be sent over to finance. If we have information about the possible materiality of that change, keeping in mind what Brian said about most of the time there not being a significant material change, we provide that information to finance as part of our suggestion, for example, for a technical change. But that then, of course, has to go through a lot of vetting and challenge at finance as well.
Bloc
Meili Faille Bloc Vaudreuil—Soulanges, QC
I am asking this question for a very specific reason.
A little earlier on, I alluded to a desirable measure. It represented close to 90 billion dollars that the government is not getting. This measure was established with the last budget. According to what we have heard, this measure is a major deterrent. That being the case, virtually no one at present has an interest in using this technical tool.
Is one of the reasons why it takes so much time for a bill to be presented to Parliament the fact that there is a desire to favour some of these interests? If the people who benefited in the order of 90 billion dollars no longer use these measures, taxpayers and the government are getting virtually no income from this measure.
General Director, Tax Policy Branch, Department of Finance
Forgive me, Mr. Chairman. Is this a question relating to the non-resident trust proposals again?
General Director, Tax Policy Branch, Department of Finance
Oh, yes. I'm sorry. The point that presumably was made by witnesses from the Department of Finance at prior committee hearings about the non-resident trust and foreign investment entity rules would indeed have been that they perform a deterrent effect. We still think they will have that effect.
They were proposed going back to the 1999 budget with a series of releases of draft legislation. Those rules have always been proposed to take effect, as they were currently proposed to take effect, as of 2007 and forward. The 2007 date remains in this year's budget. We believe the deterrent effect remains in place and has not changed. It will again require Parliament's consideration and approbation, but it's still very much in play.
Bloc
Meili Faille Bloc Vaudreuil—Soulanges, QC
However, even if the legislation were in place today, it would not be retroactive. In other words, we would not be able to turn the clock back 10 years and demand taxes from those who used these measures.
General Director, Tax Policy Branch, Department of Finance
No, it is indeed expressed to have effect as of 2007 and forward. If it's enacted in that form, it would take effect from that time.
Bloc
Meili Faille Bloc Vaudreuil—Soulanges, QC
Very well. However, Bill C-33 dated back to 1996. As of the day it was announced for the first time, people stopped using that mechanism. What we are talking about is an example, but is it possible that there are situations at present such that an amount of the same order of magnitude is eluding us?
I asked the following question earlier, but I will ask it again, this time to the Agency.
Among the various technical tools contained in your list of priorities, which one would at this time be generating the most income?
Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
My understanding is that the list of technical suggestions, as Brian said, tends to be technical in nature and not on policy and not of huge significant materiality. Off the top of my head, and I'd have to go back and verify, I don't see any large amounts in any technical suggestions we would have provided to the finance department.
As an aside, we're not the best equipped to make any estimates on the impacts. That expertise rests with the finance department and not necessarily with us. We tend to not provide estimates. We leave that to the finance department.