Public Accounts Committee on May 7th, 2014

[Yvonne Jones, Liberal, Labrador, NL]

Thank you.

Actually, I'm going to pick up exactly where my colleague left off, on chapter 8, paragraph 8.52. You did highlight that, due to changes in census collection from mandatory to voluntary, the response rate had decreased from 94% to 69%, which would be a drop of about 25%.

You also pointed out that it had caused data to be more unreliable and, as a result of quality issues with the data collected, that 25% of geographic areas do not have reliable national household survey data available for use.

So in my opinion, when I read this report, it clearly states to me that there were flaws in moving from a mandatory data collection for vital information to a voluntary system. I'd like to ask why you would not have recommended that we go back to a mandatory data collection system, because to me it seems that would be the simple answer to fixing a lot of these problems that were outlined in your report.

[Michael Ferguson]

We do not comment on government policy, so what we looked at here was that there was a policy. Statistics Canada had to implement that policy. We looked at how it managed that. At the end of the process, there was data about 3% of the population that it was not able to release, compared to 1% under the census approach.

Its users have been asking for data, so we said it needs to better understand what its users are asking for and try to determine how it can fill that gap.

So we're not going to recommend any particular policy approach to filling those types of weaknesses that we've identified. It's up to it, the department or the agency, to determine what types of policy tools to recommend to help it deal with those problems, if any policy tools are required.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you.

It certainly establishes that there is some room to make some improvement and there are definitely weaknesses.

My other question again comes from chapter 8. It deals directly with paragraph 8.48. It deals with the labour market data. You indicated in your report that there was a panel report from 2009 that highlighted the issues with better local data on job vacancies by occupation and location. You also noted that the government had still not fully addressed a shortfall in the five years since your report was made public. I guess because of that you also went on to say that it's still not possible to determine where job vacancies are located in a province or territory.

I guess my question is this. What impact do you think this would have on the government's labour market opinion for specific regions if they don't have local job data to start with in the first place? We're dealing with an issue in the country right now with regard to temporary foreign workers, and it's all coming back to data and what labour market information we would have available to us to be able to make the best decisions.

I guess I'm looking at what you've indicated in this report, and very glaringly it's telling me that we have a huge gap here. I guess I'd like to know how it impacts on other programs that we're currently funding inside the federal government.

[Michael Ferguson]

What we did identify was that there was a panel report in 2009 that noted the need for local data on job vacancies. In 2011 Statistics Canada did begin to produce—it added two questions to its survey on employment payrolls and hours, to try to collect some data related to job vacancies, but it still wasn't enough for it to produce information at sort of a more local level about where job vacancies are located.

So again, it's something that users of Statistics Canada have been asking for, and what we have recommended is that it needs to increase the amount of consultation it has with its users and determine if there are, I guess, feasible ways for it to fill the needs, and one of those needs would be information about local job vacancies.

[Yvonne Jones, Liberal, Labrador, NL]

If I could move very quickly—

[The Chair, NDP, David Christopherson]

Please move very quickly, ma'am.

[Yvonne Jones, Liberal, Labrador, NL]

And it's already been raised. It has to do with comments that were made in chapter 1 and chapter 3 with regard to not being able to access the information that you were looking for. It's quite obvious that because you did not have the information, you were not able to make appropriate conclusions with regard to those particular sections.

They say this is cabinet-protected because of cabinet privacy issues, or whatever the case may be. Is there a way around that for your office? You have a huge responsibility to Canadians when you look at how moneys are being spent inside the government. You need to be able to do appropriate audits and make appropriate recommendations as to whether it's been done properly. Without information, however, that's very difficult to do.

Is there a way to obtain information that could be deemed cabinet secrecy by departments but not necessarily deemed cabinet secrecy, through another avenue or forum? Here I guess I would be referring to the court system.

[Michael Ferguson]

Certainly in this particular instance I don't feel that we need to resort to any outside source at this point. I think that we will again explore the issue and try to resolve the issue at the bureaucratic level before we resort to other avenues for resolving the issue.

[The Chair, NDP, David Christopherson]

Good. The time has expired. Thank you both very much.

Over to Mr. Albas, you have the floor, sir.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Thank you, Mr. Chair.

I just want to thank the Auditor General for being here with your staff.

In chapter 3, you've concluded overall that the Canada Revenue Agency's aggressive tax planning program has tools to detect, correct, and deter non-compliance. Is that correct?

[Michael Ferguson]

That's correct.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

You've also concluded that the Canada Revenue Agency has established a training plan for aggressive tax planning auditors and has put in place performance measures to evaluate the aggressive tax planning program results. Is that also correct?

[Michael Ferguson]

We did in terms of the training. However, we said they needed to do a better job of making sure they know whether the auditors are following all of the training. In terms of the measures we identified, they have had some measures. Of course, it's difficult to measure success in something where you are trying to deter behaviour, but we feel that they could improve on some of their performance measures.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

So on the subject of detection, in your report you've noted that the Canada Revenue Agency has not fully evaluated whether it's able to detect high risk large business files, as you said. You've actually recommended that in order for the agency to be assured that its aggressive tax planning risk assessment tool properly identifies high risk files, it should complete testing what's known as the national risk assessment model and its effectiveness. Can you please inform us of what the agency has said in response to this recommendation?

[Michael Ferguson]

The agency has agreed with the recommendation. They say that they are committed to testing the effectiveness of the risk assessment tool. They have agreed that it is something they need to back-test and make sure that it is effective.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

To confirm, the Canada Revenue Agency has agreed to your recommendation on the national risk assessment model and has agreed to have it evaluated in this fiscal year. Is that correct?

[Michael Ferguson]

It says that the ongoing evaluation will be accomplished through the built-in feedback provided as part of the automation project. So the project is to be completed in 2014-15, and we would expect that this process would be built into that model.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Now there's been some discussion and you've raised the fact that you were unable to conclude whether the Department of Finance had followed its processes to provide timely analysis of legislative issues regarding aggressive tax planning. Yet in your concluding paragraph 3.61 you say quite clearly:

...it is apparent that most of the Agency’s priority requests from 2011 to 2013 have been addressed in recent budgets.

Is that correct?

[Michael Ferguson]

That's correct in terms of the particular items that we were looking at. We did see that most of them were dealt with in budgets. However, what we were looking for was to determine how the Department of Finance actually processed the requests. While we saw what was going into the system and the fact that there were budget changes, we weren't able to look at the actual steps that Finance took to see whether they did comply with all of their normal steps and that they were taken in a timely fashion.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

So in paragraph 3.58 it says that you were provided with a description of the process used for legislative changes, a template used in budget briefings and information about budget measures announced by the department and some analysis.

So they were compliant in giving you what they could, or at least what they felt they could that did not meet the cabinet confidentiality. Is that correct?

[Michael Ferguson]

It is my understanding that they assessed what we were asking for and gave us things like the description of the process that they felt they could give us, and then determined that the rest of the information constituted a cabinet confidence.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Okay.

I also note that there is a very helpful chart—at least helpful for people like me, exhibit 3.1—which points out a number of things: offshore insurance, RRSP strips, stock dividend value shift, and tech wrecks. Now rather than going into all those, I just wanted to point out that you also had a subsequent event, described in paragraph 3.62, after your audit was concluded. There was some further legislative action showing that the government does obviously pay very close attention to what Canada Revenue Agency feels are legislative priorities, and you obviously took those seriously.

[Michael Ferguson]

Well, they did propose changes in the federal budget of February 2014 to address the offshore insurance plan issue. So again, that was another situation where we did see eventual legislative changes to deal with issues that the Canada Revenue Agency has brought forward.

[The Chair, NDP, David Christopherson]

Sorry, Dan, but your time has gone by.

Moving along, Mr. Allen, you have the floor again, sir.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair.

Going back to chapter 8, specifically to 8.50, where you talk about data on job vacancies from surveys that you term as having limitations.

In the paragraph itself, you said, “For example, reported job vacancies in Alberta...”. I know my colleagues who live in Alberta always tell us about the great number of jobs that are out there and no doubt that is true. My son actually works there. So there's no question that there are jobs in Alberta.

The dilemma for folks in Welland, for instance, who might be thinking of going there.... According to what I read here, it says that if you look at this particular survey, you wouldn't know where the job vacancy was in Alberta. It could be in Medicine Hat, Fort McMurray, or Grande Prairie.

I used to live in Edmonton, which is at one end of the province compared to the other end of the province, with one in the middle.

You also go on to the end and talk about limited classification types of work and, etc. So really at the end of the day you could pick the right place, such as Grande Prairie, by accident because you thought, “Well, it doesn't really tell me where to go, but I'll go to Grande Prairie, get to the employer”, and then you find out that, 'Well, sorry, you're an electrician, Mr. Allen, and we wanted a pipe fitter.” So I would have travelled to Alberta for a job that doesn't exist because the survey couldn't help me get there; it simply told me there were jobs available. Am I reading that incorrectly?

I realize I've paraphrased some of this and that it's somewhat specific/non-specific, if you will, but is that really what the survey told me, that there are jobs in Alberta but it just can't tell you where the jobs are and what they actually are? Is that really what the survey tells me?