Public Accounts Committee on March 9th, 2021

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

So let's talk about that difference, Mr. Sabia.

Mr. Deputy Minister, earlier, I was very surprised to hear you say that you could not defend the past actions or decisions of certain people, since you were not in office. As parliamentarians, we have a job to do. Personally, I am in the process of learning to work with the Standing Committee on Public Accounts. Various departments are accountable to our committee. Our committee is the only one where we have to act in a non-partisan way in order to obtain answers.

I totally agree with my colleague from the Bloc Québécois that it is unacceptable that we asked the Department of Finance three times to provide us with one figure and that we did not receive an answer.

Mr. Marsland, since you were there from the beginning, could you tell us what happened? Why couldn't we get that number at the time?

[Andrew Marsland]

I think our response to the committee, Madam Chair, was that there was no public figure available—and that was correct. There was no public figure available.

As Mr. Sabia mentioned, we do many estimates of many aspects of the tax system, and we do these in the context of providing confidential advice to the government.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Marsland, I agree with the confidential advice to the government. That is fine.

When figures from the Department of Finance are available, I believe the Standing Committee on Public Accounts has the right to ask for them. We're not asking you for the recommendations on your numbers; we are just asking for the numbers.

I'm really surprised that your number is $160 million, which is the same number as the Auditor General's assessment, but the Auditor General told us that she thought it was probably much higher than that. Without questioning the numbers you are giving us today, I am a little surprised.

Mr. Sabia, I would like to say one thing. The Standing Committee on Public Accounts is a committee that is accountable to Canadians. You seem to be walking on eggshells when you answer our questions, and that surprises me a little. What we want is transparency. As I said, we understand that ultimately you keep the advice you give to the government to yourself.

Why is it dangerous to give the committee reasonable estimates of uncollected taxes?

[Michael Sabia]

In my opening remarks, at the beginning of our meeting today, I used words like “estimate” and “as things evolve” several times. Yes, we have numbers. That said, our goal is to try to answer your questions in a way that will help you better understand the nature of a tax system, in this case—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr.—

[Michael Sabia]

—not to make things more difficult to understand, because—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Sabia, I think you can leave it to the members of the committee to determine whether they are able to understand the facts and figures that are presented to them. A reasonable estimate was requested in November. If we had known the amount of the reasonable estimate, $160 million, we would have been able to continue our work. As my colleague mentioned, it took two letters and another appearance before the committee on your part to get that figure.

Why should parliamentarians not be able to understand that this is a reasonable estimate? What makes you question their ability?

I have a hard time understanding what this is all about. I think we need some clarification on that.

[Michael Sabia]

Honestly, I'm again a little surprised at your reaction. I have made it clear on a number of occasions that we are changing directions in a way that is transparent, while also recognizing the importance of what we do, including advising the government. I believe that we are demonstrating a certain openness and that you have the proof of it today.

[The Chair, Conservative, Kelly Block]

Thank you.

[Michael Sabia]

I can't explain why—

[The Chair, Conservative, Kelly Block]

Thank you.

[Michael Sabia]

—in the past, someone decided not to provide you with a certain number.

[The Chair, Conservative, Kelly Block]

Thank you.

[Michael Sabia]

I'm here and I'm providing you with the number you asked for.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Sabia. I appreciate your answer.

We will now move on to Mr. Longfield, for five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Madam Chair. I'll be sharing my time with Mr. Sorbara.

It has been a good conversation today. I'll just mention, first of all, the importance of our working together and understanding each other's timelines in the work we're both trying to accomplish on behalf of Canadians. It is very difficult to give some of these answers in terms of the timelines that we have within our committee, when we have really just a few minutes to get some answers on complicated taxation principles.

One for me, Mr. Sabia, is that the GST is collected as general revenue for the government, and then it goes out as a general expense to the government. In a previous answer you said that sometimes the supplier will have to pay GST, and then that becomes part of their remittance back to the government. It's in a different revenue and expense stream than the levy on a fuel surcharge. The Conservatives will call it a carbon tax. We call it a levy on a surcharge, which goes back to Canadians. Sometimes there is terminology used that confuses the types of information we're trying to get.

Could you maybe comment on the general revenue and general expense on GST versus the program revenue and program expenses that are reported in the public accounts?

[Michael Sabia]

Andrew, do you want to take that?

[Andrew Marsland]

Sure.

Madam Chair, if I understand the question correctly, we report GST revenues. I think we report them net of the refundable GST credit, but as the question suggested, these become general revenues. They flow into the consolidated revenue account and are expended out.

I think the distinction was made between that and the fuel charge, where, under the Greenhouse Gas Pollution Pricing Act, there is a requirement that those amounts be returned to the province through the mechanism of the climate action incentive payment and other mechanisms, and a requirement to account for those amounts on a periodic basis, to show that those requirements were met.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you. That answers my question.

Mr. Sorbara, I think you have a question or two as well in the two and a half minutes remaining.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Longfield.

Welcome, Deputy Minister, to the committee again, and thank you for availing yourself.

I wanted to get to the aspect of digitization. You came back today, and we wanted some clarification on the finance department's estimates on numbers with regard to digitization, in one aspect. In terms of looking at the overall economy, and even looking at the NextGenerationEU fund that's been set up with a heavy focus on digitization of not only the European economy but how that's paramount for all economies, how important is it that we take a whole-of-government approach working with industry, private sector, charitable and non-charitable sectors in terms of how we view digitization?

[Michael Sabia]

It's very important. If we've learned one thing in this pandemic, it's that digitization and digital access is not a “nice to have” anymore; it's an absolute fundamental. I'd go further than that. In terms of the future economic growth of the country, not just digital access in the sense of broadband connectivity but digitization of businesses, the adoption of digital technology across small and medium businesses is absolutely fundamental.

It should be a national priority, because that's where the jobs and Canada's economic growth will come from in the years ahead. It's an area in which, if I can speak personally, I'm particularly interested, in terms of finding the new locomotives of growth for our national economy. This one is hugely important.

It starts with expanding broadband connectivity, because that's intuitive and important. It goes beyond that. It's the capacity of small and medium businesses to adopt these technologies, to have access to the people who can help them do that. There's a whole range of issues here that are important to the future economic growth and well-being of Canadians.

This issue applies very much, and I agree with you, across governments. It very much applies to an earlier question that was asked about how government interacts with organizations outside of government itself. This is something that Canadians have to get serious about, more serious than we've been.

I say that because the challenge of growth facing our economy is the biggest economic challenge we'll have once we get our way through this pandemic. This is something that warrants a lot of time and attention. It warrants a serious look in terms of government policy as to how to enhance what we're doing in this area.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Sabia.

We will now move to our last round of questioning.

Mr. Blanchette-Joncas, you have two and a half minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

I'm going to come back to Mr. Sabia.

Earlier, you really caught my attention when you talked about a change in direction in the Department of Finance. What did you mean by that?

[Michael Sabia]

I didn't mean a shift, I meant a slight adjustment. Maybe it's marginal. I don't know; I just arrived at the department. We might be able to share with you other aspects of our activities and be more transparent, while still honouring our core activities, which is to provide advice to the government.

Sharing this number with you is just one example of how we have made a slight improvement in our operations because of the importance of the work that your committee does. We are always open to helping you if we can.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

You just said that improvements have been made. Let me emphasize that; I appreciate the fact that you have provided us with that figure. However, are you telling us that some practices clearly should have been changed in the past? Let's call it what it is. There was a lack of transparency on the part of the department on certain issues in the past.