Evidence of meeting #47 for Public Accounts in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.
A video is available from Parliament.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Okay. How many of those cases were referred to law enforcement?
Assistant Deputy Minister, Integrity Services Branch, Service Canada, Department of Employment and Social Development
There was no referral to law enforcement, as this was an internal investigation. It was a review, for cause, in regard to breaking the code of conduct associated with the employees of all of our departments.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Have the monies that those 49 employees received been clawed back, or are those still part of the ongoing investigations?
Assistant Deputy Minister, Integrity Services Branch, Service Canada, Department of Employment and Social Development
Those monies have been established as overpayments that must be repaid. They are being treated as any other Canadian who received benefits they were not entitled to.
Conservative
Michael Kram Conservative Regina—Wascana, SK
They must be repaid, but have they already been repaid?
Assistant Deputy Minister, Integrity Services Branch, Service Canada, Department of Employment and Social Development
They are in the process of being repaid. I would have to confirm the numbers that have been repaid.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Could you please provide those numbers in writing to the committee?
Assistant Deputy Minister, Integrity Services Branch, Service Canada, Department of Employment and Social Development
Absolutely.
I know your earlier question was in regard to those external clients who perhaps demonstrated some fraudulent activities. We did discover that there were some fraudulent activities that did need to be referred to external authorities and 12,000 of those cases were referred.
Conservative
Conservative
Conservative
Michael Kram Conservative Regina—Wascana, SK
I will leave it at that and we'll see if I get another round by the end of the meeting.
Conservative
The Chair Conservative John Williamson
You might very well get one.
We'll turn now to Mr. Fragiskatos.
You have the floor for five minutes.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you very much, Chair.
Thank you to the officials for being here today.
I want to first pose questions to Mr. Hamilton, and I do have something for ESDC as well, to Mr. Tremblay.
Mr. Hamilton, if we look early on in the report, it goes into the number of recipients who were ineligible for access to programs. Again, early on the number is close to 18%—17.9% of recipients were ineligible. That was on page 39.
Further down, I'm looking at page 47, 8.7% of recipients were ineligible. Furthermore, on page 69, only 0.5% of recipients were ineligible. There are a lot of shifts here. What's this all about? What does that reflect?
Commissioner of Revenue, Canada Revenue Agency
What it reflects is something that we mentioned earlier, which was us improving our prepayment controls as we went along, because with these programs one didn't know at the time how long they were going to last or what subsequent programs would be there. As they stayed on for a while, we developed additional tools to be able to have better prepayment control.
We learned. As Jean-François said, we were flying the plane as we were fixing it. This table is actually a reflection of that. As you see, at the very beginning there was more going out that wasn't getting caught by prepayment controls. As time went by, they were becoming more and more effective. As you said, 17.9% went down to 0.5% by the time we got to the lockdown benefit. That's really what was driving that.
There was an element, too, of additional data that came in that allowed us to do our work better. I think we talked earlier about our getting the income tax filings from 2019. It really is just a reflection of our gaining experience with the programs and putting in place some better controls to have less money go out the door before we were comfortable with it.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you very much.
I'm sure that process was made easier by the fact that, at the outset of the pandemic and in the peak periods, it would be difficult to put in place those controls all at once, but as things eased there was a greater opportunity to—you used the word “learn” before—learn and implement particular controls to the point where things.... We got to the point—again, I cited the number and and you repeated it—where 0.5% of those who applied were ineligible, down from close to 18%. The whole experience of getting through the worst parts of the pandemic into a situation where things turned more normal obviously would have helped as well, I would think.
Commissioner of Revenue, Canada Revenue Agency
That definitely would be a factor as well, but I think it's important to recognize that in the prepayment world we were learning and we were getting better. I think that's part of our message on the postpayment compliance. We have our risk-based approach. We have our algorithms. We use our intelligence, and we get better at the compliance as we see different things happening and say, there may be something here that we need to put into our program.
We always learn as we go with any compliance efforts, whether it's prepayment or post, but what you're seeing here is that learning and potentially a changing environment as well, as you say.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Can you go into that learning a little more? How does that process unfold exactly? What does that look like?
Are officials within CRA engaging with one another, taking a look at what else is possible, having conversations and perhaps looking at what other countries are doing? How does that all come together? How does that learning unfold?
Commissioner of Revenue, Canada Revenue Agency
I might just ask if one of my colleagues wants to go into detail, but I think it's basically all of the above.
Assistant Commissioner, Collections and Verification Branch, Canada Revenue Agency
Exactly.
The agency worked very closely with ESDC. The risks that we were identifying by listening to leads, for example, that we would receive from external stakeholders, by looking at the business intelligence that we were able to acquire, that's how we developed those methods. Then we do the actual audit we see if our business intelligence is right, and then we adjust to make sure we go after the case where there is more risk.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you very much.
Do I have another minute, Mr. Chair?
Conservative
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Mr. Tremblay, if there's another opportunity I'll come straight to you, I promise.
Thank you.
Conservative
The Chair Conservative John Williamson
Very good.
Ms. Sinclair-Desgagné, you have the floor for two and a half minutes.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Thank you, Mr. Chair.
Mr. Tremblay, you looked somewhat disconcerted earlier when I talked about reforming employment insurance.
Did you know that the minister,Carla Qualtrough, is committed to tabling an employment insurance reform in 2023? We are in 2023 now.
Deputy Minister, Department of Employment and Social Development
I am, of course, aware of this, Ms. Sinclair-Desgagné.
I'm not disconcerted about the reform of employment insurance or discussions about it, but it had nothing to do with the audit under discussion.
As I mentioned, there were consultations and it will be up to the government to decide on the matter of a reform and when to disclose the information.