Public Accounts Committee on March 20th, 2017

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair.

Welcome back, as well, on behalf of this side of the table.

Also, thank you to the commissioner. Again, you heard earlier that we have had some issues with the person in charge not showing up, and it's great to see you here. We had to send one meeting away, so I just wanted to get on the record that it's great to have him here.

I'd also like to add my name quickly to the welcome to the distinguished delegation from Kenya and thank them for joining us.

We have people in front of this committee all the time, as you can imagine. Ms. Cheng and her team go through the books and say, “They're not doing this right”, then suddenly you have an action plan, and suddenly you have a path forward on how to get to that point. Where I'm going with that is, how familiar are you—and you've only been there seven months—and your staff with the Taxpayer Bill of Rights?

[Bob Hamilton]

We're very familiar with it, yes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

What percentage of the staff who are employed under you would be aware of the Taxpayer Bill of Rights?

[Bob Hamilton]

Off the top, I would have said all. Everybody I've come in contact with over this period understands that it is a part of our responsibilities, so I have no reason to think that people in the agency aren't aware of it.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I say that because item number 6 under the Taxpayer Bill of Rights says that “you have the right to complete, accurate, clear, and timely information“. Obviously, what we're discussing today is that it's not timely information.

There was a motion put forward by one of my colleagues, which was a private member's motion establishing a duty of care for the Taxpayer Bill of Rights. It was subsequently voted down, but it highlighted one particular point that I'd like to read into the record.

A reference was made in the motion to item number 9 of the Taxpayer Bill of Rights where it says “add the requirement that complaints to CRA service must be addressed in a timely manner”. Again, this seems to be a theme that's been pushed on your department quite consistently, yet we're now in a position where we're supposed to trust that your new action plan is going to get us over that hurdle. We just heard a number of complaints from my colleague earlier that it's not there right now. Can you give us some faith that this is the time, now in 2017, when we're going to get there?

[Bob Hamilton]

I guess I can give you the assurance that I will be working as hard as I can with the agency to get there. We have a minister who has received a mandate from the Prime Minister to provide service to Canadians in a timely manner and improve the quality of the service.

Our mandate is to apply the tax system fairly, so to have things like the objections and the appeals function working well is a key part of our mandate. The only thing I would say is that sometimes these things take longer than we would like.

In the case of the appeals, we know that even having a 180-day service standard on low-complexity cases is not where we want to be, but we have to be practical and realize we have this big inventory right now that we have to grind down and that will take time.

I would also probably say that with 40,000 people administering the tax system on behalf of more than 30 million Canadians, we won't be perfect. However, I think you can rest assured that, within the agency, the pressure to improve service and to make sure that we're respecting the taxpayers' rights and giving the taxpayers the service they deserve is very important right now and we'll be doing everything we can.

The final point I would raise is that it's always resources. If we had unlimited resources, we could deal with everybody's return on the minute, but we always have to balance priorities—

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

On that point—if you don't mind, only because I have limited time here—you were provided with $440 million in the last budget, which was to go towards overseas tax havens, if you will. Are you insinuating that, perhaps if that was better spent on some of this, you would be able to help out the.... Instead of going after the little guy, you're going after these big corporations. How many people could that have hired to work on the telephones? How many people could that have helped to go through these appeal processes?

[Bob Hamilton]

The governments make decisions about where they provide money. These are all priorities. These are important activities that the agency uncovers. I think we're doing a great job with the money that we received on the offshore tax evasions. We did receive some money in the 2016 budget on the appeals function and we're trying to do the best we can with that.

Going forward, we're going to have to make sure that we are nimble within the agency to make sure that we're putting resources in the right places. That's all part of the puzzle.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll now move to Mr. Arya, please, for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Mr. Hamilton, you mentioned that in seven months you visited all regional operations and you attested to the pride, professionalism, and commitment of 40,000 employees. Did you find any shortcomings or flaws?

[Bob Hamilton]

Why would you want to focus on that?

First, even though I touched down in every province at least once, I didn't meet all 40,000. It's a very big place. At a people level, the people I did meet were uniformly proud of what they did. They were integrated in the community. They worked together as a team. They were trying to do the best thing they could for Canadian taxpayers and for the government overall. Uniformly, with the people I met, I didn't see any examples.

In the course of that seven months I've seen some areas where the agency should improve. Yes, I think we should improve in the way we communicate both with each other and with Canadians. I think there are opportunities for improvement, for us to become more innovative. The world is changing and Canadians expect us to provide them with services like they get from their bank, like they get from others. We need to make sure that we're innovative to find ways to do that.

I think those are some areas where I think we could improve. I mentioned, as we audit people, can we make sure that we're educating them along the way and making sure that all those conversations are respectful?

That's my seven-month report.

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

You mentioned that your agency takes great pride in quality decisions and service to Canadians, but the Auditor General's report says that 65% of the time, agency rulings in whole or in part are in favour of the taxpayers. Why is that?

[Bob Hamilton]

It's important to understand on that 65% number that a couple of things happen when a file moves from the assessment audit to appeals. In the cases where the appeal is ruled with the taxpayer, only a small percentage of those were because the auditor was seen to have misapplied the law. In a number of cases new information became available; either the taxpayer provided new information or information that was there wasn't realized.

In a lot of those cases new information caused the decision to change. That can happen. That's part of why what we're trying to do is to make sure we deal with cases at the appropriate place, in the assessment audit place, and that only at the appeals are we looking at, not new information coming, but revisiting the decision. That's part of the 65%.

[Chandra Arya, Liberal, Nepean, ON]

You mentioned that you wish to resolve low-complexity objections in 180 days 80% of the time. It appears that currently this is being resolved in 143 days. Why are you increasing the amount of time?

[Bob Hamilton]

It's a question of how you measure it on average. Is it 143 days versus measuring we're going to get through 80% of them in 180 days? The factor that plays into both of those decisions and the reason we need a service standard of 180 days now is the backlog. If you took the backlog away, I think we'd be able to process these in fewer than 140 days, for sure.

[Chandra Arya, Liberal, Nepean, ON]

Ms. Cheng, in your report, exhibit 2.3, you showed the average time to resolution of low-complexity objections is 143 days. That includes both the backlog and the current inventory?

[Nancy Cheng]

That would be because we were looking at five years of information, up to March 2016. At that point we do not distinguish backlog; all the objections are in play.

[Chandra Arya, Liberal, Nepean, ON]

Do you think the current proposed time of 180 days is longer than what is being done now?

[Nancy Cheng]

What I'm hearing from the commissioner is that they'll start with that, but the intention is to work that number down. Certainly from our perspective, the expectation would be this number should be quite a bit lower than the 180. Especially when the commissioner is considering asking for information way earlier. That's going to shorten the timeline. I suspect they would be in a position—

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

I have a quick question for the commissioner.

[The Chair, Conservative, Kevin Sorenson]

Very quick. You have four seconds.

[Chandra Arya, Liberal, Nepean, ON]

You say that some of the group cases take years because of the process involved in the courts. Are you trying to do something else with the department to hasten the process?

[Bob Hamilton]

We feel we've already taken some actions to get that process to be as efficient as possible. There's a recognition that those are going to take a longer time. Bundling cases together and having a lead case that we go forward with that binds all the others is a good process; there are a lot of cases and it takes a long time. That's why we've tried to pull apart how we're going to attack the group cases versus the low-complexity cases. They're very different. For example, I wouldn't feel comfortable giving a service standard on a group case. I wouldn't even know what to say in that case.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll now move back to Mr. Jeneroux.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair.

I'd like us to go over some quick facts, if we can. Is it 180 days from the date received or from the date assigned to the appeals officer?