Evidence of meeting #49 for Public Accounts in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was taxpayers.
A video is available from Parliament.
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
I do have that number. The number for 2014-15 is $18 billion.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
From old files, what is the total we have to deal with overall?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
That's it.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
Does the $18 billion include international evasion?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Yes.
Conservative
The Chair Conservative Kevin Sorenson
You just have a little more time. I'll just grab a quick question here.
Ms. Cheng, you've heard very optimistic words from the CRA. They have all the pieces in place. They're looking to do this quickly. Are you satisfied with what you've heard today? Do you have any areas of concern, after listening today?
Assistant Auditor General, Office of the Auditor General of Canada
I'm very encouraged with what the commissioner has provided in his opening statement. Those seem to be the areas that we are concerned with. The communication aspect is very important because a lot of taxpayers are waiting for answers. The uncertainty doesn't help with the dynamics or the trust factor. The element of managing the inventory is absolutely critical. We had a graph that shows the overall change in inventory, but we also split it out into the intake and the ability to resolve cases. Those lines were converging, which suggests that you might be looking at another spike. The fact that the commissioner and the agency are going to try to deal with that is important.
When we look at the different sides and where some of these pressure points are coming from, a lot of it has to do with the information front. We have a pie chart in there that shows that, at the end of the day, a lot of times, we could have resolved these things earlier if CRA had had the information. What was the problem there? If we didn't ask for it, why did we wait before we asked? If we had the information and didn't look at it at the right time, then that suggests an awareness and training issue so that it can be looked at sooner. If we were looking for the information only when the appeal officer was looking at it, why didn't somebody ask for that kind of information earlier? There is a lot of data in there that the agency can take a look at and use to improve its services. Most of the key elements are there. We obviously haven't had time to look at each of the elements in detail, but, overall, we're quite encouraged with what we're hearing.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
I just have a quick question. It says in the past 10 fiscal years the number of objections have increased by 171%, yet staff has only increased by 14%. Have you requested, in this budget, a complement to bring you up to the amount that you think you need?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Just in case you missed it, I would note that we did get money in the budget. That was fine. I would say that in the past probably not enough resources have been devoted to this activity. The numbers that you quoted are the ones that I look at. How big has the workload grown? How much of the extra resources...? It probably could have been a bit bigger. There's been some reallocation within the agency to try to put more money here. We did get money in the last budget. We'll see what the next budget holds. I won't comment on that at all. Whatever happens, we need to look at this at an agency level going down the road and think about how we're best allocating our resources. That's my job. Whether it's looking at tax evasion activity, fixing our phone system, or whether it's this. That will be a part of what we need to do, and I'll be looking at it with an eye to deliver on the action plan that we have and try to make sure that we're adequately resourced.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Thank you.
Ms. Cheng, Mr. Goulet, I want to come back to my earlier comment. In 2004, Revenue Canada conducted an audit on notices of objection. We are now in 2017, and the 2016 report has been published.
How can we ensure that this will not happen again?
I know that Mr. Chair has already asked these kinds of questions, but I would like to know what your comments are.
Have you reviewed the 2004 report?
Your study covers 2011, 2012, 2013, 2014 and 2015.
What kind of assurance can we draw from the comments we have heard today?
Could you tell us how this approach compares to the last one?
Assistant Auditor General, Office of the Auditor General of Canada
Since it was last looked at in 2004, rolling forward, are we seeing similar issues? The issues here have to do with the feedback loop that was being talked about, because sometimes you know we are getting the results of the actual objection process and those lessons learned weren't properly captured. We're seeing a lot of similar elements. I could ask Mr. Goulet to see if he's got additional things to say, but, by and large, it's important that the assessors and the auditors get to know why the decisions were overturned so that things don't happen the same way.
Liberal
Paul Lefebvre Liberal Sudbury, ON
That said, we do not want this to happen again. That was the case in 2004 and it still is.
Will the measures implemented this time be the same as the ones in 2004?
Mr. Goulet, do you want to answer?
Jean Goulet Principal, Office of the Auditor General of Canada
Thank you for the question.
In 2004, we made that observation. In 2012, the agency conducted an audit and came to the same conclusion. In 2015, when we went to the agency, it had begun to receive suggestions from its employees on how to resolve the issues.
Of course, I cannot at this point assure you that the agency will take action. However, like Ms. Cheng, I am very encouraged by all the steps that have been taken. In addition, at meetings with agency representatives, we heard very positive comments on this matter. Without being defensive, they acknowledged that something had to be done. The agency representatives made a commitment to take action.
Assistant Auditor General, Office of the Auditor General of Canada
I think the important point is to follow through now. We've heard the approach that's going to be taken. It seems to be on the right track. We're all encouraged by that. It would be necessary to make sure that those actions get carried through and that indeed the inventory goes down, the rates of overturned...are changing. That would be worth another look down the road.
NDP
David Christopherson NDP Hamilton Centre, ON
Very briefly again, Chair, I want to return to the issue that I had earmarked earlier, on the 65%.
You answered, Mr. Hamilton, that much of that is new information that comes in. We've heard Ms. Cheng speak to whether, if it's new information, that information could have been or should have been anticipated as being required. Obviously, you were suggesting the 65% may not be as big as it looks. How much of it do you think can be reasonably be answered away, because it's a big number?
Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
It's a big number, and part of what we're going to try to do is to have that information come earlier in the process. As I said, I think it could be a combination of two factors. The first is the taxpayer offering up the information at the right point in time rather than at the appeals. Second, it's us knowing that we need that information and asking the question earlier, or realizing that the information exists somewhere. If you look at the numbers, 32% is new facts that were not previously requested or received. That's a big percentage. Then there's another percentage, almost 30%, that was not previously obvious. So what's that exactly? We're going to do some work on that. New facts previously requested but not received, that's about a quarter. That's a pretty big chunk. Then you get to about 8% where the appeals officer felt that the auditor had misapplied the law. That's 8%, it's still a positive number, but I think there's enough in the first three categories that we should be able to find a better way to get the right information at the right time. I'm quite hopeful on that.
NDP
David Christopherson NDP Hamilton Centre, ON
That's great, it makes sense. I realize that there are answers that are technical but it makes sense to identify information we can be asking people up front that you know you're going to ask them for anyway and to do it in a way that allows them to have the shortest amount of time.
Ms. Cheng, you mentioned something in your opening remarks, and I'm going to ask you just to expand on it. In paragraph 10 of your opening remarks you state that, “We also examined the Canada Revenue Agency’s performance targets for the objection process and found that the Agency did not consider timeliness from the point of view of the taxpayer.”
We know in previous occasions Mr. Ferguson made a big issue out of the fact that things get measured inside departments and they feel real good about themselves because that measurement looks good, but they're not taking into account what the common-sense question is, which is, how long did it take for the taxpayer? When we're measuring we need to be measuring more those things that affect the ability of government to provide services to Canadians and not just moving it from desk A to desk B. In your own words could you just touch on that, giving the importance the Auditor General is placing on this?
Assistant Auditor General, Office of the Auditor General of Canada
As the member pointed out, this was a point that the Auditor General has made on a number of occasions. In this particular case, we were seeing that the clock starts ticking in terms of that performance measurement metric when the appeals officer starts working on it. Then we say earlier, when could we actually be looking at the overall account? It should be the time when that objection is launched. So that front end, until such time that the file is assigned, is not captured as part of the performance indicators up to that point, and it shouldn't be because then we're measuring an activity within the agency as opposed to stepping back as a taxpayer. I'm looking at it in terms of me interfacing with the agency and how long it took for my file to be completely resolved.
Conservative
The Chair Conservative Kevin Sorenson
I don't think there are any other questions coming from any of the members.
Have you ever done an assessment as to how many of the objections you receive are from taxpayers who've filled out the forms themselves as compared with having an accountant go through them? That's not to put the blame on the individual taxpayer. Probably all of us get calls from constituents concerned about the difficulty of working their way through the tax form. “Can you make the tax form easier? Can it be simpler? Why do I need an accountant to do this?”
Have there been those kinds of internal studies done?