Evidence of meeting #71 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 billion.
A video is available from Parliament.
9:30 a.m.
Liberal
Rémi Massé Liberal Avignon—La Mitis—Matane—Matapédia, QC
The Auditor General stated that there is an accumulated deficit of $17.8 billion. Even considering the debt written off this year, this is obviously still quite high.
In your opinion, do departments do everything they can to collect on debts owed to the crown before they write them off?
9:30 a.m.
Comptroller General of Canada, Treasury Board Secretariat
It depends. Each department operates differently. Some departments are larger than others. The larger departments get better results than the smaller ones.
If you look at the mechanisms that departments have available, you see that they can use Canada Revenue Agency, the receiver general, or their own facilities or people to try to collect the debt. There is some debt that, frankly, is just not worth collecting. It's not worth the effort.
I would tell you that the experience varies. Canada Revenue Agency is very effective. Some of the smaller organizations struggle with that, and maybe there is a better way.
9:30 a.m.
Liberal
Rémi Massé Liberal Avignon—La Mitis—Matane—Matapédia, QC
Thank you, Mr. Matthews.
You mentioned the Canada Revenue Agency. You said it is especially effective in this regard. I do not mean to call that into question, but we can see that the Canada Revenue Agency wrote off a total of close to $3 billion in 2016-17, $3 billion in 2015-16, and $3.4 billion in 2014-15. So a tremendous amount of debt is written off.
You also referred to the Receiver General of Canada. I know the Receiver General of Canada established a pilot project to help departments collect debts that could be recovered. There appear to be some good results.
Are you aware of this initiative? Could you tell us about it? Is this something that warrants further exploration?
9:30 a.m.
Comptroller General of Canada, Treasury Board Secretariat
Thank you for your questions.
Yes, I am aware of that pilot project. I think there are actually three of them.
They were successful. When you are looking at these pilots.... As to could you assign debt to the receiver general to collect, you have to look at the nature of the debt, but yes, we've had some good success. I am not convinced it would be successful in every case, but if you look at debt related to pension overpayments and those types of things, where you have a relationship with the organization or the person, absolutely. If it's a one-off, where you've dealt with the organization only one time, the receiver general would probably struggle just as a private company would. We've had some good success, and we are going to continue the pilot. It's going to be extended.
Really, what is on us is to figure out when the receiver general is a good choice, and when there are better mechanisms out there. As a result of the pilot, we will be issuing guidance—it won't be “musts”—to departments: if it's this kind of debt, the receiver general works best; if it's this kind of debt, CRA is better; if it's this kind of debt, do something different.
That's what we hope to learn. There are ongoing pilots and yes, they've had some good success.
9:30 a.m.
Liberal
Rémi Massé Liberal Avignon—La Mitis—Matane—Matapédia, QC
Thank you, Mr. Matthews.
I have a final question along the same lines, and it is for Mr. Rochon.
Given our government's focus on tax fairness, do you have any comments about helping departments use all the necessary mechanisms to recover debts before they are written off?
9:40 a.m.
Deputy Minister, Department of Finance
I completely agree with my colleague Mr. Matthews. In cases where that is appropriate, it is certainly a good investment. We have to admit, nonetheless, that there are some difficult cases in which the amounts cannot be recovered. Judgment must always be exercised in recovering the amounts owed.
9:40 a.m.
Conservative
9:40 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Okay. Just in that 30 seconds, is there any of the debt that has been cancelled or forgiven that is foreign debt and what percentage of the overall $6 billion would be foreign entities or maybe forgiveness of loans to other...?
9:40 a.m.
Comptroller General of Canada, Treasury Board Secretariat
We can get that information for you. Off the top of my head, the bulk of it relates to programs for Canadians, but there's certainly a possibility some is foreign, especially on the international side.
9:40 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Just as a ballpark, do you think it would be 20% or well under that?
9:40 a.m.
Comptroller General of Canada, Treasury Board Secretariat
We can probably get you a number before the end of this meeting.
9:40 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much.
We'll now to go Mr. Nuttall for five minutes.
9:40 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Thank you, Mr. Chair.
Thank you to the Auditor General's office and the Auditor General, and certainly the staff from Treasury Board and Finance for being available here today.
I want to follow up on some of the questions regarding writeoffs and to a specific program and then perhaps I'll have some follow-up questions on a specific industry. What are the writeoffs associated with the Canada Small Business Financing Act?
9:40 a.m.
Comptroller General of Canada, Treasury Board Secretariat
I'm going to have to get back to you on that one. I don't have that information at my fingertips. I'll check and see if we can get something deployed in the meeting, but off the top of my head, I'm afraid I can't answer the question. I'm sorry.
9:40 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Okay, so we don't know how much of the total writeoffs are related to that?
9:45 a.m.
Comptroller General of Canada, Treasury Board Secretariat
I will cycle through volume III here and look by department. That might give us some intelligence as to that act specifically, but my guess is it's going to be hard to find on a moment's notice.
9:45 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Okay. Then I will pull it up at a later date.
In terms of lapsed funds, one of the departments that you highlighted for us was ISED, Innovation, Science and Economic Development. There was a lapse of $434 million where there was an estimation that $246 million wouldn't be spent partway through the year. Is that what I'm understanding in the frozen allotments?
9:45 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
I'm on page 12 of the Public Accounts, the presentation that was....
9:45 a.m.
Comptroller General of Canada, Treasury Board Secretariat
Yes, on page 12 of the deck, we have ISED. There is indeed a lapse of $434 million, and the frozen allotment is $246 million, so you are correct.
9:45 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Okay. When you go through the volume II, details of expenses and revenues, when you look at the different agencies that fall within ISED, some of the agencies are way out of whack with the average lapses. For instance, the Canadian Space Agency is 15% below what was estimated. Then there are two others: Federal Economic Development Agency for Southern Ontario is 12%, and the National Research Council of Canada is 20%.
The interesting thing on the National Research Council is the $149,566,000 that is available from previous years. At what point do those dollars phase out?
9:45 a.m.
Comptroller General of Canada, Treasury Board Secretariat
There are two things. We'll speak generally about ISED, Mr. Chair, and then we'll answer the specific question on how dollars phase out.
When you look at ISED, the Canadian Space Agency was highlighted. Their lapse is very much related to one big project, the radar satellite projects, and when you're dealing with a complex project like satellite development, delays are not unimaginable. So you got delays there which cause a lapse. That's not ideal, but it's explainable.
You then cycle into some of the other organizations you mentioned where you have lapses in grants and contributions dollars. The government has takers; you need to have applicants. Sometimes the applicants materialize in volumes we expect and sometimes they don't. Then you have an issue of whether you can negotiate a transfer payment agreement or not. Depending on the nature of the department, you may see some delays. Infrastructure is a great example of where negotiations cause delays.
In terms of the ability to carry forward money, there's a built-in carry forward around operating and capital. Departments are allowed to carry forward 5% of operating and a certain percentage of capital. There is no automatic rollover of grants and contributions dollars. If a department can't spend its grants and contributions dollars, they have to make an application to our friends in the Department of Finance and say they would like to spend this money next year. If Finance blesses it, it then would get picked up again in the supply cycle, back to Parliament to get voted, and away we go again.
9:45 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Here's where it doesn't make a whole lot of sense to me.
Last year, there was a 10% rollover approved into the National Research Council Canada. This year they fell 30% short, not 15% short, on their spending estimates.
At what point does that fall back into general coffers and go towards...?