Public Accounts Committee on Nov. 23rd, 2023

[Karen Hogan]

If I could give you a visual for it—I'm a very visual person—among those three volumes that you lifted up, our audit opinion applies to this, the financial statements and the notes contained therein. The rest is supplemental information provided to help readers understand the details of the financial statements.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Okay.

Once you sign off on the public accounts, what other work needs to be done before the public accounts can be tabled?

[Karen Hogan]

Again, once we've signed off on the public accounts...that means our work is complete. We've received all of the information and evidence that we need. We then provide our signed auditor's report to the Government of Canada.

The rest of the work, which is involved in the publication and preparation of the written and electronic versions, rests with the receiver general, the comptroller general and the Department of Finance to carry out. They can tell you the work that's required once the audit is signed off on.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Do you think the timeline could be condensed?

[Karen Hogan]

If you're asking me as the auditor, that really rests with the preparer. If they are prepared to prepare the financial statements earlier and more quickly, we can work with them in order to ensure that we complete our work in a way such that all of this could come out earlier. However, it is a joint effort that requires the public service, as well as my audit office, to move all of this up.

It's a large endeavour. If it's 260 auditors, imagine how many public servants are involved in this.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

I can only imagine.

What's being done to further improve the process for tabling public accounts?

[Karen Hogan]

I'm going to ask Mr. Huppé to answer that. Again, they table the public accounts. All we do is audit the financial statements and provide an audit opinion on them.

[Roch Huppé]

As the Auditor General said, there's a series of steps that need to be taken. For example, the preparation of what we call the HTML version for the electronic piece...it needs to be accessible. What we're trying to do....

Maybe I should point out that this committee, two years ago, gave us a recommendation in a report to produce the public accounts and table them by October 15. I owe you an answer to that by December 31. You will note that I highly welcome that recommendation. I highly believe that we can produce the public accounts by October 15. We need to make sure that we do it intelligently. We need to make sure that we iron out the details we need to make sure that the process is straightforward. We need to make sure that everyone implicated understands that October 15 is the date we will be shooting for for tabling.

Unless there is an exceptional circumstance—an election, for example, or a pandemic or something of that nature—I believe we could be ready to table as recommended by the committee.

[The Chair, Conservative, John Williamson]

Thank you very much. That is your time.

Ms. Sinclair‑Desgagné, you now have the floor for six minutes.

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

Thank you, Mr. Chair.

Welcome to all our witnesses, and particularly Mr. Forbes, who is here with us at the Standing Committee on Public Accounts for the first time.

Auditor General, thank you for your work on public accounts. You addressed several major issues. I'm going to begin by disposing of a minor detail in the public accounts report. Last year, someone found the only typo in the public accounts report. This time, I may be the person to have found a typo. That's what I'll begin with.

On page 276 of volume III, the expenses for the Cabinet are listed. One such expense looks rather different from the others and it's for the President of the Privy Council, the Honourable Bill Blair, who reported only $9 for transportation and communication. Should he be congratulated for his frugality or can we assume that there may have been an error, given that most of the expenses run to five or six digits?

[Karen Hogan]

Given the number of pages in such a voluminous report, there are bound to be a few typos, as you pointed out.

I would refer you to my earlier presentation. I don't check every page of the three volumes. The comptroller general will be able to confirm whether there was a mistake. The receiver general might also be able to help you.

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

Thank you. Just briefly…

[Roch Huppé]

We'll be more than happy to check it out.

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

Okay. Thank you very much.

It would be surprising for the President of the Privy Council to have spent such a small amount on travel, given the price of a round trip on the Montreal metro.

Auditor General, I have a question for you now.

One of the issues you mentioned, a very important one for me and the people I represent in my riding, concerns the COVID‑19 benefits. You mentioned it at the beginning of your opening address on financial statements and you said it was one of the most important aspects.

You said that the government had to make the required effort to recover overpayments. But we learned earlier this week that the Canada Revenue Agency had announced that it would not be carrying out the verifications needed in at least 24,000 cases identified as potential overpayments.

In your observations on the financial statements, do you still believe it's important to recover these benefits with a view to a balanced budget, or do you feel differently now?

[Karen Hogan]

I read the short report prepared by the Canada Revenue Agency earlier this week, and focused on comments that pertain to our work, and our performance audit of the benefits.

I must admit that I found these somewhat disappointing. The Canada Revenue Agency said that it had verified 50% of the businesses…

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

Is it really 50%?

[Karen Hogan]

Sorry. It's 53% of the businesses we had identified. However, if we look at the detailed information, only 4% of these businesses were verified after payment. The remaining 49% had been verified prior to payment.

Don't forget that in my report, my recommendations were really centred on the lack of rigour in the work involving the pre- and post-payment verifications. So I still maintain that it's a very important aspect.

I'm very concerned about the fact that the government is adopting a standardized approach, as it usually does, to deal with a situation that is anything but standard. It has to do a lot more work on post-payment verifications to determine whether the amounts were paid to ineligible businesses or taxpayers. Only then should it decide whether or not to recover the funds.

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

That's most interesting, Auditor General.

I would now like to turn to the deputy minister of finance, because he, of course, handles the government portfolio.

On one hand, it's clear that billions of dollars may have been overspent on individuals, and on the other, that loans from the Canada Emergency Business Account will have to be repaid at a time when many businesses are considering bankruptcy. People think there is an imbalance. On one hand, overpayments are not being recovered and on the other, honest people are being asked to repay loans before they are able to do so.

Isn't there an imbalance there? How have you looked into the issue? Most importantly, did you do a detailed analysis of it?

[Chris Forbes]

Thank you for your question.

I'm going to deal with both aspects of your question.

I know that the Canada Revenue Agency is trying to examine instances of overpayments, where individuals received overpayments. It has a verification process and it is trying to monitor…

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

Yes, but we just heard that the agency was using a standardized process, when the situation is anything but standard. COVID‑19 benefits were overpaid. The CRA should establish a non-standard verification process and do far more investigating to recover the money. In many instances, we know that there was fraud. People who defrauded the government.

Why doesn't the Department of Finance make more of an effort on that side of things rather than simply refuse to postpone the reimbursement of loans under the Emergency Account? What would that accomplish apart from keeping the subsidies at the rate of 5%?

Frankly, it looks as if a straightforward economic analysis, a cost-benefit analysis of aid programs during the pandemic, was not carried out.

[Chris Forbes]

I can't speak for the Canada Revenue Agency about cases involving legal action. However, I can tell you that the CRA is certainly focusing on the big picture with respect to the risks involved in overpayments or tax underpayments.

The agency has a team of auditors who decide what types of accounts will have legal action taken against them for fraud, overpayments, or tax underpayments.

I rely on them to determine which are the most important cases in terms of…

[The Chair, Conservative, John Williamson]

Thank you very much.

I'm giving the floor to Mr. Desjarlais now.

Mr. Desjarlais, you have the floor for six minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you, Mr. Chair.

Thank you to the witnesses for being present here today.

I also want to congratulate Mr. Forbes on his new role. I look forward to our continued work, and I hope to see you again at our committee.

I'd like to turn, in particular, to section 1 of the financial statements and the analysis on page 15. It mentions that the corporate income tax revenues have increased by $15.1 billion, or 19.2%. We've seen that the $15.1 billion increase in corporate tax revenues looks substantially larger from the former fiscal year, from 2022 to the period this audited statement comes from, which ended earlier this year. It speaks to a very large increase in corporate taxation revenues, but it doesn't paint nearly the whole picture as to where that's coming from. One could guess that it could be more corporations, or it could be more profit, which I think is important for Canadians to understand.

My Conservative colleague Mr. McCauley mentioned that he might want Loblaws to control the Bank of Canada because it can make a profit. I disagree with that, but I take that as a joke. I do want to narrow in on that, because it's really important, I think, to understand corporate actors in relation to their participation in our country.

Deputy Minister Forbes, what was the total corporate profit that yielded such an increase in the corporate tax?

[Chris Forbes]

I'm sorry. I don't have that number with me, but we would expect corporate tax revenues to rise in line with corporate profits. That was a year, obviously, when the economy was growing quite strongly coming out of COVID. To me, it's consistent with similar growth rates in corporate profits.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

To that point, in your work, have you ever reviewed, or do you review, the work of the Competition Bureau in relation to some of its work as it relates to corporate taxation, for example?