Public Accounts Committee on Nov. 9th, 2017

[Michael Ferguson]

Again, I would just like to mention that we're not suggesting the threshold needs to change, and we're not suggesting that it's not okay to have a system that costs money. Our issue is that if there is a system on paper that says all things imported through the mail or by courier with a value over $20 should have a duty charged on them, if that is what the system is, then there need to be the resources in the system to make sure that it is in fact enforceable.

We're not trying to say where it should be, or whether there should be a change, or how you come out on the balance of that policy question. What we're saying is—and again, understanding that we know you can never get to 100%—there needs to be a much higher expectation that in fact, yes, the system is being applied at the $20 level, whereas right now I think it's clear that the system is being applied at higher levels in some instances.

[The Chair, Conservative, Kevin Sorenson]

Did you want to continue with your statements? You have 40 seconds left.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

It reminds me of the good old spirit of too much taxation kills taxation, so I think we are on the same page there. As the deputy minister said, this is a political issue, and unfortunately I have no more time to say where we stand on it.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Mr. Christopherson, please.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

Just to pick up that last one, if I understand it, the essence of this is that the government is saying on paper that by law they should be doing the $20, but in reality they're using another number because the $20 is impractical from their point of view.

[Michael Ferguson]

Again, they are trying to enforce it to $20, but they can't enforce it to $20 all of the time.

[David Christopherson, NDP, Hamilton Centre, ON]

They don't have an informal system of using a larger dollar figure? They just fail at the $20 and that's it?

[John Ossowski]

I'm not aware that we have another number in play that we use as a benchmark. I think it's really a function of volume and complexity, and they do the best they can.

[David Christopherson, NDP, Hamilton Centre, ON]

That would almost be better. As much as it's not 100% in terms of what we do, at least it would make more practical sense.

If I can, Chair, and I know we're down to limited time, I want to spend just a moment on an area that my friend, Mr. Arya, got us into. That is the refusal of information.

Mr. Stewart, you started to give an indication that this information is not captured by the most recent order in council. Again, back up. It's public already. People know that we have a battle going on in terms of fuel subsidies, and the Auditor General is still not able to get all the information. I'm saying this publicly because that's out there. We're in camera now dealing with the parliamentary law clerk and others as we go through the legality of that. Obviously it's a big issue when the Auditor General says he's entitled to this information and that he would please like it, but the government says no. That's a problem. There are piecemeal fixes, and I won't get into the complexities of it. Mr. Stewart, you were about to say that the order in council that was issued recently to resolve the Auditor General's need for information back to when this government took power, I think we're into another issue again in which the information actually goes into a previous government, and that creates an artificial wall where the bureaucratic world says no. That's kind of where the rub is.

Could I have your comments?

[Rick Stewart]

Mr. Chair, I think you can appreciate that my obligation is to provide the Auditor General with documents that he's entitled to as dictated by orders in council and his act, and I'm obliged to respect the limits of those orders in council.

Your broader question of whether that limit should be on a different date or exist at all, that's a question I'm not in a position to respond to directly. That's a question you'll have to direct to the Privy Council Office.

[David Christopherson, NDP, Hamilton Centre, ON]

Yes, okay.

I was just making the case, Chair, that, again, I've made the argument that the two outstanding issues that exist, the legal matters we have are, without divulging any confidences, the instant case of trying to get the information pre-2015, that remains an outstanding issue. Then there's the overall issue that the Auditor General has been asking for for years, which is a change in language so we don't get into this each time. So far every time we've gotten into it, we've had a one-off resolve with an order in council, but it still leaves more questions because of the detailed nature of the order in council naming certain documents certain things. So we still have an issue in Canada—as proud as we are of our auditing system, and we all crow about having clean audits and everything—right now, we have a serious issue in which the Auditor General is asking for information that he deems is within his legal mandate, and the department is saying they aren't going to give it. That's as far as I can go now because we're in camera arming ourselves with the legalities of all of this, but it is a big deal. The Auditor General is not looking for any cabinet secrets. He doesn't want any of that. He just wants numbers. He wants his analysis.

If you want a chance to say something, I'll let you have it, and then I'm going to move on, if I have time.

[The Chair, Conservative, Kevin Sorenson]

Mr. Stewart.

[Rick Stewart]

Thank you, sir. I would appreciate adding something, if I may.

The Auditor General was seeking information in order to determine—as we understood what they were seeking—whether we turned our attention to the question of administrative costs as we considered the appropriate level for the de minimis threshold. While we were not permitted to share a single document in question, what we were able to provide, within the flexibilities that we have, was a series of email transactions between ourselves and the agency that indicated there was an engagement and a dialogue back and forth with the agency that pertained to this question of administrative costs, as we were looking at the issue.

It's not a perfect solution for what the Auditor General was looking for, but in our mind, it was an evidence track that at least suggested that indeed we had turned our attention to the question. It did not provide information on what our judgment was out of it, but it at least, in our mind, demonstrated that we did turn our attention to it.

[David Christopherson, NDP, Hamilton Centre, ON]

That's going to require, Chair, an opportunity for the AG to respond, if he wishes, please.

[Michael Ferguson]

Indeed.

Well, I think if our evidence on issues about whether departments are doing analyses is about whether there was email correspondence back and forth that talked about there being some analysis done, that's not the depth of evidence, let's say, that we need to be able to conclude whether analysis was at an appropriate level.

So, yes, and we said in the report that they indicated to us that they had done the analysis, which we wouldn't normally put in a report if that had just been a verbal “we did something”. We put that in the report because, yes, there was some evidence that there was information that existed, but at the end of the day, the point is still the point. We needed to see the actual analysis to be able to conclude on this.

[David Christopherson, NDP, Hamilton Centre, ON]

That's right, and this remains an ongoing issue for us.

I would say, Chair, that until we resolve the issue of macro language, this public accounts committee going forward in the foreseeable future is going to continue to run into this rub. That one is now with the fuel subsidies issue where we're still in crisis.

Am I out of time now?

[The Chair, Conservative, Kevin Sorenson]

Yes, you were a few minutes ago.

Mr. Stewart, is it your deputy minister or you who would deem this as a cabinet confidence, or is it actually the Privy Council Office that would say, “Here's the line. The analysis, the numbers, the particulars are the cabinet confidence”?

[Rick Stewart]

It's a determination that we make in collaboration and consultation with the Privy Council Office.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Now we will go to Mr. Lefebvre, please.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

It's been a very interesting few minutes.

I just want to get some clarification. Mr. Chen raised the issue with respect to the penalties. In the Auditor General's report, it says that the average penalty was $151, which is almost identical to the penalty for the first offence which is $150. Were the vast majority of the penalties in this report for first-time offenders? What is the percentage of who these penalties are applied to?

[John Ossowski]

I will turn to my colleague on this one.

[Brad Loynachan]

You are correct that, in fact, it's an escalating penalty regime. In that regard, first infractions in some cases are warnings without a monetary assessment, and then it will build for repeat contraventions of the same nature.

[Paul Lefebvre, Liberal, Sudbury, ON]

All right, so there are two things. I've asked what the percentage of first-time offenders is that this average goes to. After that, does it stop at that point? Is there a mechanism to follow if they are repeat offenders as well?

[Brad Loynachan]

Certainly. It's an automated system within the CBSA. For the same importer for the same contravention, the system will automatically trigger the higher level penalty for subsequent infractions.

[Paul Lefebvre, Liberal, Sudbury, ON]

You talked about the warnings. You have a warning system before a penalty. Is that correct?