Public Accounts Committee on April 22nd, 2021

[Andrew Marsland]

When we provided all of the documents that are relevant to the Auditor General's work—

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

Mr. Marsland, you're not answering my question. You're preventing me today from doing my work as a member of the Standing Committee on Public Accounts.

I don't have the information contained in the Auditor General's report. The role of the Standing Committee on Public Accounts is to make sure that programs are effective and that they comply with policy.

You are at the moment not answering my question, and also not providing information.

How can you expect me to perform my role here today as a member of this committee if I don't have access to documents pertaining to your department?

[Andrew Marsland]

Madam Chair, it is not my decision to make with regard to whether a cabinet confidence is released to the committee. There are legal provisions in place that protect those. It is not my decision to release them to the committee.

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

Mr. Marsland, would it be correct to say then that your department has never decided whether or not such information should be made public?

[Andrew Marsland]

I'm not sure I fully understand the question. It is not the department's decision whether or not those documents are made public. They are protected by cabinet confidence.

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

Okay.

Who determines cabinet confidence, Mr. Marsland?

[Andrew Marsland]

That's certainly not my role. I think there has been discussion previously in the committee, Madam Chair, on seeking expertise regarding the application of cabinet confidence to documents.

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

Mr. Marsland, You're not answering my question now. It's not the first time that your department has withheld information from the Standing Committee on Public Accounts.

Do you recall the November meeting, when you were asked for information on e-commerce taxation?

You attended with Mr. Sabia's predecessor, Mr. Rochon. I asked the question and requested a written response.

In December, you gave the same answer. You did not answer the question. We had to call Mr. Sabia to appear before the committee to get an answer.

It's the same old story. We're acting in the same bad movie. Why aren't you answering the question? Why does your department refuse to share information that affects taxpayer money?

It's a historic program. How many billions of dollars does the Canada emergency wage subsidy represent, Mr. Marsland?

[The Chair, Conservative, Kelly Block]

Could we have a very short answer, Mr. Marsland?

[Andrew Marsland]

The last question was how many billions. The amount that has been paid out so far by the Canada Revenue Agency is, I believe, $74 billion. The estimates for the program were provided in last week's budget.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will now go to Mr. MacGregor for six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you so much, Madam Chair. I'm happy to be here on behalf of Mr. Green today.

I'm going to focus on the Canada Revenue Agency.

In paragraph 7.50 of the report, the audit noted that for fiscal year 2019-20 the agency had 273 full-time equivalent employees for the enforcement of GST/HST delinquent filer compliance. The salary expenditures were $27.7 million, but those employees had a fiscal impact of about $3.2 billion during that year. That's sort of an investment with a return of more than 100 to one. The fiscal impact included the federal tax, provincial tax, interest, and penalties collected. The recommendation was that “given the good return on investment”, the agency was encouraged to do more work. It was basically that the CRA should strengthen its efforts towards tax compliance on GST/HST, and so on.

My question is regarding the 273 full-time equivalents for the enforcement of GST/HST filer compliance. Does this represent an increase, decrease, or pretty much status quo compared to fiscal years preceding that?

[Bob Hamilton]

Madam Chair, I apologize for having joined the call late. I was able to get in a few minutes after it started, but I did have another meeting that I had to finish up.

I would turn to one of my colleagues to talk about the specifics of whether that number of resources is more or less than in previous years. I don't have those numbers at my fingertips.

In terms of the question that you asked about the revenue generated by this program and the 100:1 ratio, we do recognize.... We run things under risk-based analysis here. One of the commitments that we have in our action plan is to take a look at the delinquent filer program to make sure that we're allocating resources appropriately, that it's meeting expectations, and to look forward to whether we need to make any changes to increase the efficiency and the output of that program. We identified a potential, and we can see that with the resources we had, we were able to generate additional revenues. We always look at continuously improving our programs. In the action plan, we committed to do this.

Perhaps I'll turn it to my colleague to answer that specific question on the level of resources.

[Marc Lemieux, Assistant Commissioner, Collections and Verification Branch, Canada Revenue Agency]

The level of resources has been constant compared to previous years. The program continued with the same level of funding.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you for that clarification.

Mr. Hamilton, I guess you partly answered my follow-up question, but with regard to the determination of what an adequate level of staffing is to ensure proper compliance, can you illustrate a little bit more some of the thoughts that go into making that determination?

[Bob Hamilton]

At the most global level, we have to look at the resources we have at our disposal at the agency and try to put them towards the most effective places. We don't have unlimited resources to do everything. We have to take, as I said, a risk-based approach to figure out whether we have the right number of resources on that particular program.

In this case, it's the delinquent filer program. Within that, we look at what the returns or added efficiency to the program would be. One thing that you need to recognize is that when you put a certain number of resources to a program, you can have a high return—say, 100:1 in your example—but as you put more resources in, it becomes harder and harder, and we see that the rate of return would typically decline. I'm not saying that it would in this case, but it would typically decline. We have to look at how valuable the additional resources would be for this delinquent filer program relative to other things that we could do. That's where we use our intelligence and our risk-based systems to try to calibrate that.

As I've said, as a pandemic exercise, we are going to take another look at this program to see if it could be more optimal.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Hamilton.

I want to get in one last question. I have just under a minute here.

In the CRA's response to the Auditor General, you said:

Actions in response to this recommendation will include a review of workload selection and prioritization criteria, examination of the level and allocation of program resources, identification of potential legislative changes and increased outreach to increase compliance regarding GST/HST filing.

The action plan will be completed by September 2023.

Why will it take you more than two years to complete this review?

[Bob Hamilton]

Let me start on that one, and then I'll turn to my colleague.

I think the first thing I'd like to say is that it's not that everything will wait until 2023. We're going to make progress, obviously, in the coming months and over the course of the next year, but some things will take longer.

I think the one thing for us to recognize as the agency is that these new programs, such as the wage subsidy, are in addition to the core programs that we run every year. We have quite a big machine in terms of delivering service to Canadians and in compliance. As we go through and think about what to do with a particular program or how to improve it, we have to make sure that we're thinking about it with the lessons we've learned in the pandemic and also thinking about how it fits together with our core programs. Those things can take some time, but we will be seeing progress between now and 2023 in the operational efficiency of the program and the identification of some lessons learned.

[The Chair, Conservative, Kelly Block]

Thank you very much.

If you were going to turn it over to your colleague, Mr. Hamilton, he would need to give a very short answer.

[Marc Lemieux]

If possible, Madam Chair, I would simply add that there will also be some changes eventually to systems. Those take time. That's why we intend to have done that by that date.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Lemieux.

Colleagues, we are getting closer to the time of our vote, so I will suspend the meeting for now to allow you to prepare for the vote.

I ask that you return as soon as possible so that we may resume our meeting with our witnesses.

[The Chair, Conservative, Kelly Block]

Colleagues, it looks like everyone has rejoined us. We do have 15 minutes left in our scheduled meeting, which means we have just enough time to get through the next two rounds of questions.

I will move to Mr. Lawrence for five minutes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

I am hoping I have a couple of fairly brief questions for Mr. Hamilton, then I will yield the floor to Mr. Webber.

Mr. Hamilton, I note that the budget had some additional funding for IT and other support. If the budget had been a year earlier, would we be a little further ahead if we had been able to get the resources to you more quickly?

[Bob Hamilton]

Madam Chair, I think it's important to recognize we have a very sophisticated, well-funded IT system here. We're quite confident in it. It's true one could always do more. We look forward to using some of the IT expenditures to improve our system. In fact, in some cases it will be ongoing maintenance and improvements to the existing system.

Could we have done more had it been a year earlier? I'm not sure. It's a hypothetical question. I'm pretty confident that we have a well-funded IT system, but we do look for increased funding to respond to additional pressures that we see on the horizon.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you. That's a diplomatic answer, for sure.

Also, Mr. Hamilton, on that, last year your department, at the direction of the government, was gracious enough to give Canadians additional time to file their taxes. Our party, of course, has been calling for that as well.

You're not involved in policy—that's for the government—but would it be technically possible to delay the tax filing as you did last year while Canadians continue to receive benefits such as the Canada emergency wage subsidy?