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.

On the agenda

MPs speaking

Also speaking

Nancy Cheng  Assistant Auditor General, Office of the Auditor General of Canada
Bob Hamilton  Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Mireille Laroche  Assistant Commissioner, Appeals Branch, Canada Revenue Agency
Jean Goulet  Principal, Office of the Auditor General of Canada

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Well, that's the status quo.

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

—whatever I can down the road.

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

If I'm never satisfied now, I'll just say we're done.

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

It is something that we will get to the bottom of, so at some point I'd be happy to furnish the committee with whatever the results are.

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

We may ask you to do that anyway.

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

You're right, it's not 70 versus 75, it's a big gap. How could that be? I don't know the answers, but there are some things that it could be. They probably have a better process than we do. We need to fix our process, and we're taking some actions to have earlier interventions. We can get closer because of that. There is also the possibility that they were measuring something a bit differently in the U.K. case than what they're measuring here. This can happen. They could be focusing on something in particular. Or the U.K. tax system doesn't work the same way as ours does.

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

To be fair, that was an aggregate of six countries that looked at it, not just the U.K. Anyway, sorry to interrupt.

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

Well, I'm focusing on the U.K. because that was a good one.

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

I know, and I want to make you focus on the rest.

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

But it would apply to all the other countries as well. Their tax systems operate a little bit differently, so there might be some differences. But I'm certainly anxious to find out how all of that adds up to that difference, and we have some work, together with the U.K. and the U.S.—

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Do you have a deadline for yourself as to when you expect to be satisfied?

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

I would certainly hope in the coming couple of months that we would be able to understand the calculations better, not to necessarily have fixed it, but at least to understand why we're different, and hopefully start to draw some lessons from that.

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Do I still have some time, Chair?

4:45 p.m.

Conservative

The Chair Conservative Kevin Sorenson

No you don't, but you were so kind to me earlier, if it's a concluding comment—

4:45 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

I'll remain faithful to my original approach and be honest with you, no, I would be changing subjects.

Thank you, Chair, I conclude.

4:45 p.m.

Conservative

The Chair Conservative Kevin Sorenson

Mrs. Mendès.

4:45 p.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Thank you, Mr. Chair.

I will continue in French, to inject a bit of French into this meeting.

I want to begin by pointing out that less than 1% of all tax returns filed across Canada are subject to review or appeal. So this is not a major or a widespread problem. The fact remains that Canadians often remember the bitter relationship they may have with the Canada Revenue Agency, and that is what forges the reputation of Revenue Canada agents and of the agency itself among Canadians.

During the debates in the House over these past few weeks, we have repeatedly heard that Canadians felt that the agency is much more concerned about the small taxpayer than the tax evader—in other words, those who are doing everything to avoid their legal obligation to pay their fair share of taxes.

I know that the minister invests a great deal of energy into the fight against tax evasion. You have received funding specifically for combatting tax evasion. However, there is still a challenge in that fight. We realized that during our meeting with the British public accounts committee, last December. The members of that committee focused a lot on tax evasion, which is legal in Great Britain. In fact, it is not illegal. However, it is a major problem in the sense that Canadians feel that they are being targeted by Revenue Canada's hammer.

How can we counter the perception that it's always the small taxpayer, the Canadian who regularly pays his or her taxes, who gets scooped up, while so many other people manage to use tax evasion to avoid their tax obligations and not pay their fair share?

4:45 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

When it comes to this, it is first important to have an idea of the number of files that are the subject of an objection. As you know, that figure is less than 1%. In the vast majority of cases, there is no objection. That is the most important thing. However, the files that are the subject of an objection are also important. It is important to have an effective process in place.

In addition, another interesting issue has to do with the fairness of the tax system for small and medium-sized businesses and for some individuals. I think it is very important in Canadian society to have a

self-assessment system.

It is important for Canadians to see that their tax system is fair. We collect taxes owing, whether the company is large or small. Occasionally, the processes established for a large company are very long and complex. However, it is important to have good tax collection systems.

That is why the funding set aside for this purpose in the previous budget, in 2016, was substantial. Now, we manage a lot of activities related to recovering taxes from foreign companies involved in fiscal evasion. We want to ensure that all Canadians have confidence in their tax system and its fairness. We will collect taxes owing.

4:50 p.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Mr. Hamilton, I'm just going back to the question of what we saw in Britain when we were there. They were also addressing the tax evasion issue with the big companies. The companies were using all sorts of very legal systems to evade, and they were linking it to tax transparency. The fact was that these companies were not declaring in Britain, for example, all the massive revenues they were making from around the world. They were talking about Google and Apple, and other big companies in the world, and how that was part of the huge and mass tax evasion system that allowed them to, bottom line, not pay much tax anywhere, not pay any income tax anywhere, or business tax anywhere.

Is Revenue Canada also looking at that?

4:50 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

It's a huge issue for us along with the Department of Finance. The Department of Finance sets the policies and we administer them, but we are a big part of that exercise globally.

When I was at the meeting in February, talking to my U.K. and U.S. colleagues, one of the big items on the agenda was how to ensure that proper taxes are collected in each jurisdiction. We all face the same issue. We have it in Canada. As I mentioned, we have a lot of activity in that domain, but it is something that we need to tackle globally.

We have a base erosion and profit shifting exercise taking place at the OECD and the forum on tax administration. Revenue Canada is a very significant participant. In fact, in my group, as the commissioner, I lead two activities. One is on large international businesses, and the second is on tax capacity in developing countries. We are playing a big role in trying to figure out how the global tax system can work better for us and for all countries.

4:50 p.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

We'll try to bring the tax transparency conference here this year, absolutely.

4:50 p.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you, Ms. Mendès.

We'll go back to Mr. Aboultaif.

4:50 p.m.

Conservative

Ziad Aboultaif Conservative Edmonton Manning, AB

Thank you again. I have just a couple of small questions.

Based on the recommendation from the Auditor General that you heard today, it seems like you are up to a big job. That could mean restructuring the whole operation of the CRA, or at least looking into the overall way of doing business. How are you going to improve that without looking at the overall operation instead of looking at certain areas?

So far, we haven't seen that there is a secret recipe that you're going to come up with in order to be able to solve all these problems and move forward. When issues get compiled one after the other, it means you will never be able to catch up in a short time, or maybe even in the long term. There seems to be an immediate emergency call to put forward some kind of secret recipe or strategy to do so.

What's on your mind, since you're new to the job and you're up to the challenge?

4:50 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

I'll talk about the appeals function first.

Obviously, the Auditor General came through and gave us a snapshot. We agreed with the recommendations that were made, so we have something to do.

I outlined the more agency-wide activities that we're going to be doing. We're going to be improving our processes. We're going to tackle the backlog. We're going to be learning from what we do.

The other thing I didn't really mention, which is important, is that Mireille has done some reorganization within her group to make sure that she and her team are well set up to deliver on this challenge. That's a part of it. Again, I have to say that when I met with the people in our appeals operations across the country, they were ready to do this. They want to be providing this good service to Canadians, so I hope we've given them the organizational structure to do so. We'll give them the tools to do it. We're going to get better data to be able to measure how we're doing. We're going to communicate with Canadians. People will be holding our feet to the fire.

I think we have the pieces in place to do that, but I agree with you. I have run enough organizations to know that this is a big job, and we'll have to stay at it.

We'll probably take a little bit longer than we would like to, but we're going to push it as aggressively as we can. We have a board of management at CRA as well that is pushing us in this domain, so I have more than enough people looking out for how well we're doing on this front.

I'm quite confident that we're going to see some improvements, and if people are realistic about how quickly we can actually do things, I think we'll be able to get ourselves back on track.

4:55 p.m.

Conservative

Ziad Aboultaif Conservative Edmonton Manning, AB

Do you have any idea of the number in dollars for the unsettled cases that your agency is looking at, at the moment?