Public Accounts Committee on May 9th, 2019

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

I wonder who these 524 people are, who actually did submit the forms, out of the millions and millions of transactions. Perhaps the CRA employees are the only people who know that this is something they're required to do.

What's the answer to this? If this is dealing with the law as it is currently constituted, should we have a CRA that's overwhelmed with millions and millions of GST or HST forms? Is there another answer here?

[Sylvain Ricard]

Consider the cost-benefit side of it. I think the example in the report is $2 a month for an individual. They write a cheque for $2, put that in an envelope and put a stamp on it. The CRA receives it, opens it, processes it, registers it and deposits it. It's probably going to end up costing way more than $2, both for the taxpayer and the CRA. Again, that's their mandate. That's their reality. It's not for us to say how to best approach that, and to judge. As was mentioned, it's a requirement.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Surely there must be a policy change here, to not be in a position where tens of millions of transactions are not being done correctly.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll now move to Mr. Sarai.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you.

I want to carry on with that.

Would you say that these transactions are with the bigger suppliers, such as Amazon, iTunes or eBay, or is it with smaller courier and other online businesses, where you buy something, and it gets sent to you?

[Philippe Le Goff]

We looked at the courier low-value shipment program, which currently has 14 participating companies, including FedEx, UPS, DHL and others. This is all that we looked at.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Would this be the responsibility of the courier, according to our current CRA Act, or would it be the responsibility of the vendor to collect those taxes? I'm just wondering, so we know where to go looking for—

[Philippe Le Goff]

Under the program, it is the responsibility of the courier to collect the tax.

[Randeep Sarai, Liberal, Surrey Centre, BC]

You're saying that these couriers were not collecting the tax, in the majority of cases.

[Philippe Le Goff]

No, what we say is that CBSA is unable to validate if the amount of tax collected and remitted to CBSA is accurate.

[Randeep Sarai, Liberal, Surrey Centre, BC]

What other jurisdictions, globally, are well versed on e-commerce tax collecting—the Scandinavian countries, or the U.S.? Which would be a good standard? It seems very onerous. I know people who, originally, if they made software, thought it was best to do it through iTunes, because it's able to collect all the different jurisdictional taxes for you. What jurisdictions are doing a good job of collecting and simplifying it so it's not what Mr. Ricard said, where you're collecting $2, buying a stamp and sending a cheque? Is there something that would be automatic? You plug in, it's going from this country or province to province, and it automatically calculates everything for you. Are there jurisdictions we could look at as the gold standard?

[Philippe Le Goff]

I could not provide you with the name of a country. I know that at the World Customs Organization, guidelines are currently put together. Countries are working together to address this worldwide problem.

[Randeep Sarai, Liberal, Surrey Centre, BC]

My second question has to do with the refugee delay and backlog.

When you say the recommendation was for two months as the goal, is that to be a protected person, or for your full refugee process, down to permanent residence? Was two months to be declared a protected person not maintained, or was it a full process, taking up to two years, and now you're anticipating it might even be five?

[Sylvain Ricard]

It's for the decision on your asylum claim. So, you are getting a positive or negative answer to your request to get asylum status—

[Randeep Sarai, Liberal, Surrey Centre, BC]

Do you mean as a protected person or as a permanent resident?

[Sylvain Ricard]

I mean as a protected person.

[Randeep Sarai, Liberal, Surrey Centre, BC]

As to the RCMP, my understanding is that enough carbines and body armour were provided, but it's not guaranteed that they are distributed. Is there a deficiency in the methodology that the RCMP uses to distribute these, or is this a willingness issue that they don't think everyone needs it?

[Nicholas Swales, Principal, Office of the Auditor General]

First of all, we don't know, and the RCMP doesn't know, in fact, whether they have enough carbines. One of our observations was that they don't have a methodology that they've implemented that allows them to know what the correct number is. We observed that they bought more than they had estimated, but that's not the same as saying that they have all that they would need.

In terms of hard body armour, they do have a total across the country that meets the standard that they had set of one per operational vehicle plus 10%, but there were two provinces that weren't at that threshold, so that meant other provinces had more than the minimum, which they are certainly able to do, but we did expect that all the provinces would have the minimum.

Therefore, the issue is clearly partly one of distribution and partly one of deciding what threshold you want to meet for the hard body armour and the carbines. What we found was that methodologies for distributing the carbines were not sufficiently in place. They had identified that they should be giving them to at-risk officers, but they didn't have a consistent definition of what that was, nor had they worked out how many carbines there should be in different locations based on the characteristics of that location, like the number of high-risk incidents that it experienced.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Sarai.

I'm going to give the last couple of minutes to Mr. Christopherson. He can kind of sum everything up, if he wishes. Then our time will be up.

[David Christopherson, NDP, Hamilton Centre, ON]

Thanks, Chair. I'll try to do this quickly.

I just want to touch on a couple of themes that are running through these reports and some ones that we've seen in the recent past. I'll start with the special examination on Marine Atlantic. Again, in your overall message in paragraph 14, Auditor General, you state that:

Overall, we found that Marine Atlantic Inc. had good practices in place to oversee the running of the Corporation and to manage its operations.

It's hard for us to ask for much more than that.

The next paragraph says:

Nonetheless, we were concerned that the Corporation was not able to make long-term strategic decisions because of circumstances outside its control—specifically, delays by the government in approving the Corporation’s full five-year corporate plans. We reported this issue in our 2009 special examination, and we found it to be a significant deficiency in the current audit.

That's the government, and it's not necessarily this one per se. It's previous governments too. I've fessed up that I saw the same problems bottlenecked at the provincial level where decisions at the centre—around the premier or the prime minister—are holding up major decisions, and so they're not able to do the job that they want to do for Canadians because the senior government that gave them the mandate and the funding to do it didn't give them the approvals they need and didn't give them the people on the board. I'm running out of time.

Canada Post—it takes so many hits. It needs to be said. This is the Auditor General:

Overall, during the period covered by this audit, we found that the Canada Post Corporation had in place good practices to oversee the running of the Corporation and to manage its operations.

It's been a while since it's had that kind of good news, but there you are, and fairness dictates that it be put there. However, the AG goes on:

We were concerned that circumstances outside the Corporation’s control limited its ability to make long-term strategic decisions. The circumstances included delays in several areas that were within the government’s control: appointing new members to the Corporation’s Board of Directors, along with a new President and Chief Executive Officer; approving the Corporation’s annual corporate plans...

Does that sound familiar? That's just from here. There's one more here—

[The Chair, Conservative, Kevin Sorenson]

Be very quick, please.

[David Christopherson, NDP, Hamilton Centre, ON]

—that is an example, and I can't go into that because I've run out of time, but the point is we have a huge problem with decisions being bottlenecked at the PMO level, at the government approval level, and something has to be done, and it's not just one party. This is a systemic problem that can be fixed. We just need to make sure they have the political will.

Thank you, Chair.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Christopherson.

Our time is up.

I want to thank you for coming here today and giving us a little...almost like an appetizer for what's to come. We look forward to beginning our meetings again next week.

Tuesday at our committee we'll be studying the main estimates and the planning and priorities and following that we will get into the Auditor General's department-by-department audits. Also, I'll remind you, we have a couple of draft reports we've studied that we need to finalize and see that they're tabled in the House.

Thank you to the Auditor General and his team for work well done. We look forward to seeing you in the days to come as we call departments before our committee.

The meeting is adjourned.