Public Accounts Committee on Feb. 2nd, 2023

[Han Dong, Liberal, Don Valley North, ON]

My follow-up question to that is this: Would that diminish our ability to recover funds that were paid out to individuals who weren't qualified—the fact that we did not get these employees' SIN numbers?

[Marc Lemieux]

If I may—

[Bob Hamilton]

No, I don't—

Go ahead, Marc. I'm sorry.

[Marc Lemieux]

We now have that information because we have the T4s for all the employees in Canada for that period of time, and we know for which businesses they were working. It's now possible for us to look at that information.

[Han Dong, Liberal, Don Valley North, ON]

That's good to know.

On page 23, the Auditor General talked about no real-time business revenue data. The report goes on to say:

10.77 More broadly, real-time GST/HST reporting could also

reduce the reporting burden on businesses

reduce errors and improve compliance on tax assessments

help in informing, designing, and assessing public policies

I also see the response of the—

[The Chair, Conservative, John Williamson]

Could you pose your question very quickly, please, so that we have time for a quick answer?

[Han Dong, Liberal, Don Valley North, ON]

Sure.

Could you tell us what's in the works when it comes to real-time reporting?

[Bob Hamilton]

Yes, I'll be very quick on this.

There are two aspects to real-time reporting. One is ePayroll, which we talked about earlier, where we get electronic, real-time payroll information from businesses. The one that you're referring to there is what we call e-invoicing, where we get electronic invoices at the time of the transaction rather than waiting for the monthly or quarterly filing.

What we're doing right now is looking at what other countries have done, because there are a few countries that have implemented this system. It's a fairly big change, so we're taking our time to make sure that we think about it and get it done right. We're doing the ePayroll at the same time. We're really in an advanced investigative stage of how we might implement such a system.

[The Chair, Conservative, John Williamson]

Thank you very much.

Ms. Sinclair-Desgagné, you have two and a half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

My questions are once more for Mr. Tremblay, of Employment and Social Development Canada, the ESDC.

Are you aware of the fact that "unemployment insurance" systems, as they are called in the United States and France, were sufficiently flexible to add other components to deal with the crisis?

[Cliff C. Groen]

I can take this question if that's all right.

Good afternoon, and thanks for your question.

I'm unaware of the employment insurance system in France, but I'm thoroughly familiar with the one in the United States.

The solution adopted in the United States for benefits during the pandemic shows that Canada's decision was really the better one. Many reports released in March, April and May 2020, revealed that it took months for eligible applicants to receive benefits. That's what we wanted to avoid and that's why we introduced the CERB.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you. That's interesting.

On the other hand, the United States did better than the Canada Revenue Agency in terms of recovering funds. At least they can estimate the total amount of benefits that were sent in error or wrongly claimed.

My understanding is that each system had advantages and disadvantages. Would it be fair to say that?

[Cliff C. Groen]

Yes, each of the two systems clearly had advantages and disadvantages.

As the Auditor General's report pointed out, there were shortcomings in implementing and designing the program. However, the situation was an emergency and it was related to the pandemic…

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Okay.

Excuse me for interrupting. I have only 30 seconds left and a final question I'd like to ask.

A recession is expected.

Do you believe that the Department of Employment and Social Development is in a position to deal with a potential increase in applications if there were a future crisis, in the distant future we hope, but which unfortunately will no doubt arise in the not-so-distant future?

[Cliff C. Groen]

Yes, of course.

We are aware of the risk of a recession, and it may lead to more employment insurance claims. We are analyzing the situation in some depth. As we have done in other situations, we will take whatever action is needed to be able to pay employment insurance benefits to Canadians on a priority basis.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Desjarlais, you have the floor for your last two and a half minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I do want to thank all the witnesses for being present today on this important discussion. I know how important this is to many regular Canadians who will, unfortunately, be forced, in some cases, with having some of the dollars clawed back that, in many instances, I believe, they were encouraged to.... You know, you heard it from Ms. Shanahan and from other MPs during that time.

I believe that's a critical fact that's only speaking to the matter of fairness on behalf of Canadians. We understand the circumstances in which they were incentivized to actually apply for the program, in what was one of our country's most dire situations. I have a great amount respect for the families who had to make that decision. However, I understand the need, of course, to do the work of making sure that we regulate and take the appropriate measures to ensure that some of that money is recouped, particularly in fraudulent situations.

Of course, that work wasn't done by a wave of a magic wand. It was done by regular, everyday folks, regular Canadians working for the CRA.

I have a really tough time, especially when the commissioner mentions that there are unlimited resources at the CRA, that everything is great and that you can do all the things, even though Canadian taxpayers know that tax avoidance is high in Canada and has become an issue. Then there is the fact that the CRA had to administer an unprecedented program like this, given the CERB capacity. I have capacity concerns.

My question is this: Given the unprecedented strain of administering and delivering the pandemic relief programs, did it have a negative effect on the CRA's efforts to address the long-standing corporate tax gaps? That's for the commissioner.

[Bob Hamilton]

Maybe just to correct the record.... I don't think I would have ever said that everything is fabulous at the CRA and that we have infinite resources. I mean, we all deal with having the resources to do a job.

What I do think is that we have adequate resources to do both of the things you're describing. We haven't seen a material reduction in our efforts on tax evasion more broadly. There was certainly a pause as the pandemic arrived and we had to send people home and take people off their duties so that they could help us on other fronts, but that was a temporary—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Okay, sure, but what were the CRA's estimates for the annual gaps and uncollected corporate tax, then, between 2018 and today? Have they grown?

[Bob Hamilton]

Could you just repeat the last part?

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Have they grown?

The numbers I cited before were from 2014 to 2018—that $5 billion to $7 billion in tax avoidance. You're saying you have enough resources to tackle that problem. I'm saying, “Show me the results.” Between 2018 and 2022, have you been able to actually monitor this and get the results Canadians deserve?

[The Chair, Conservative, John Williamson]

Thank you, Mr. Desjarlais. Let's hear from Mr. Hamilton for a brief answer.

[Bob Hamilton]

I would say yes. I don't have the results right at my fingertips, but every time we get additional money to battle tax evasion, it comes from the Department of Finance with a measure of how much money we are going to bring in by our audits and by our additional efforts. We've always been able to meet those. As I say, there was a particular point in time as the pandemic arrived—

[The Chair, Conservative, John Williamson]

Thank you. That was a superb answer. I'll stop there, because I don't want to keep you here all night.

Mr. Kram, you have the floor for five minutes. After that, we'll have one more from the government side, and then that will be it. It's over to you.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay. Thank you very much, Mr. Chair.

I would like to come back to the Auditor General and to pages 32 and 33 of the report. I'd like to read a couple of quick quotes. It says:

As of June 2022, the department identified approximately 13,000 cases of identity theft in Employment Insurance Emergency Response Benefit payments worth $7.9 million.

Then the next point is this:

As of July 2022, the agency identified more than 23,000 cases of identity theft in COVID‑19 benefit payments for individuals worth $131 million.

Those two points are, regrettably, under the heading “Unrecoverable amounts”. Is it safe to say that the $138.9 million is gone forever?