Evidence of meeting #12 for Public Accounts in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contract.

A video is available from Parliament.

On the agenda

Members speaking

Before the committee

Jones  President, Shared Services Canada
Pagé  Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency
Hayes  Deputy Auditor General, Office of the Auditor General
Davis  Assistant Deputy Minister, Chief Financial Officer, Shared Services Canada
Brunner  Assistant Deputy Minister, Digital Services, Shared Services Canada
Skinner  Deputy Assistant Commissioner, Information Technology Branch, Canada Revenue Agency
Serjak  Assistant Commissioner, Assessment, Benefit, and Service Branch, Canada Revenue Agency

5:30 p.m.

Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

Hugo Pagé

We will get back to you in writing, because it's a multi-faceted question. We also need to consult with our colleagues at the finance department, because parts of your question relate more to tax law than to how that tax law is administered.

Sébastien Lemire Bloc Abitibi—Témiscamingue, QC

I have another question. It's about the government's IT deficiencies. Do taxpayers and tax professionals still have the option of providing the CRA with hard copies in the event of a system failure? Oftentimes, there is no plan B, and that's what causes problems.

How much did you actually save from moving to electronic tax filing, given the risk of information being lost?

5:30 p.m.

Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

Hugo Pagé

Those who have no other choice or who want to can still paper-file their returns and use paper forms.

As for the savings, it's hard to give you a number, because there are many factors to consider. As you know, paper-based communications are more expensive: there are postage costs, document storage costs and mailroom costs. Paper-based correspondence has real costs.

It's really tough to answer your question and tell you exactly how much the transition to an electronic system cost.

Sébastien Lemire Bloc Abitibi—Témiscamingue, QC

The loss of information is probably what costs the most from a tax expert's standpoint, not to mention the consequences of trying to retrieve that information.

5:30 p.m.

Conservative

The Chair Conservative John Williamson

Thank you.

Next, we will go back to the official opposition.

I understand, Mr. Kuruc, that you're going to split your time with Mr. Stevenson.

We'll go over to you.

Ned Kuruc Conservative Hamilton East—Stoney Creek, ON

Mr. Pagé, I'd like to go back to this $4.9-million cheque issued. I'd like to continue from what my colleague said. What are the human and computer thresholds to look at an audit? What is the number? Is it $1 million or $5 million?

5:30 p.m.

Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

Hugo Pagé

What we need to understand is that there are multiple business lines. We have, for instance, individual income tax, corporate income tax, excise tax and so on. The risks are assessed depending on the nature of the business line, and within each of the business lines, they are controlled or adjusted so that we minimize the risk for the taxpayer.

Of course, we are not providing the threshold, because that would be giving fraudsters a recipe for trying to defraud the government, and that's why we're reluctant to share that information publicly.

5:30 p.m.

Conservative

Ned Kuruc Conservative Hamilton East—Stoney Creek, ON

Yet, they defrauded you of $4.9 million.

5:30 p.m.

Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

Hugo Pagé

I can't comment on that file.

5:30 p.m.

Conservative

Ned Kuruc Conservative Hamilton East—Stoney Creek, ON

Thank you.

An article states, “A source with inside knowledge of the CRA's workings said that returns are routinely processed electronically without human oversight, even in cases where millions are paid out that would later raise red flags.”

My question is for Mr. Hayes.

You looked into some of these government benefit evaluations during COVID, after hearing that no controls were in place—and now we are hearing that we don't know what those controls are at CRA—to automatically review corporate refunds under $5 million. Should CRA practices be reviewed externally by your office?

5:30 p.m.

Deputy Auditor General, Office of the Auditor General

Andrew Hayes

We do review CRA very regularly. I can think of audits over the last number of years that have related to, obviously, the COVID benefits, but we've also looked at tax appeals, collection efforts and the like.

I think the question really comes down to how effective the controls are and whether they need to be reviewed by the CRA. Those are questions for the CRA.

What we would be able to bring out in an audit is whether they're working effectively. I think the question that's coming up today, which might be frustrating some members, is about details. I can understand why the CRA does not want to share specific details in an open session like this; however, accountability can be achieved in other ways, and there might be options for the committee to get there.

5:30 p.m.

Conservative

Ned Kuruc Conservative Hamilton East—Stoney Creek, ON

Thank you for your answer.

I'll cede the rest of my time.

5:30 p.m.

Conservative

The Chair Conservative John Williamson

Thank you. That is spot-on.

You have two and a half minutes, Mr. Stevenson.

5:30 p.m.

Conservative

William Stevenson Conservative Yellowhead, AB

Thank you.

I have three questions, so I don't know if I'll get through them.

As a CPA in public practice, when a new client came in the door, my conversation was always that my job was to prevent them from doing something that would raise red flags. They would all ask what red flags were. Many times, we'd talk. We'd go to some place in a CPA conference, and they'd say that CRA is looking at this and this, so we would always know that. Most of the time, when we got there, it was documentation. CRA said that if you couldn't prove it, you were guilty, unless you could prove otherwise. Documentation, as the auditor said, is....

I'm sure, Mr. Jones, you are probably correct, and you probably did some of those things, but you didn't have the proof and the documentation; therefore, it didn't exist, as far as the auditor is concerned.

That being said, when there are any of these problems, going back, what are the punishments when it comes to human error? What are the corrections when it comes to the digital side? If it was digital, was it a mistake because the computer looked at it? A lot of times when we looked at these—as I said, they were to avoid red flags—I submitted things electronically, and a person often never saw these, so the computer did it.

What corrections do we have there? Who is responsible for that, versus the people who are maybe looking at the paperwork and not submitting because of punishment for letting these fraudulent things go through?

5:35 p.m.

Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

Hugo Pagé

I'm assuming the question is for us.

5:35 p.m.

Conservative

William Stevenson Conservative Yellowhead, AB

Yes, it's for you.

5:35 p.m.

Assistant Commissioner and Chief Financial Officer, Finance and Administration Branch, Canada Revenue Agency

Hugo Pagé

Okay.

What we have to understand is that the risk landscape continuously evolves. What's important for us is that we keep track of what those changes are, how we adjust to those changes and how we adjust our control framework around those risk areas.

To your question as to who is accountable when there are situations where perhaps control could have been improved, we look at the lessons learned. We look at what we can learn from that experience and what we can adjust.

5:35 p.m.

Conservative

William Stevenson Conservative Yellowhead, AB

We've gone back and forth a few times and said that the CRA is responsible for a lot of the criteria and where you're going to be looking for any adjustments. Can you tell me why it took so long? You have, supposedly, now analyzed a lot of the details, but until the 100 days were put in, it seems like a lot of those were ignored.

You're showing progress that seemed to not take very long to increase your response times on the phones. Why did it take so long for that to happen? In the past, it was taking hours to get through. The 100-day limit came in, and all of a sudden we can get it under five minutes again.

Can you explain why the 100 days are the only thing that seemed to turn the tide? Is it because the Liberal government—

5:35 p.m.

Conservative

The Chair Conservative John Williamson

Thank you, Mr. Stevenson. Your time is up.

I'll allow an answer.

5:35 p.m.

Assistant Commissioner, Assessment, Benefit, and Service Branch, Canada Revenue Agency

Melanie Serjak

I can answer that question. Before the 100-day plan began on September 2, the CRA had been taking a lot of steps and taking on a lot of initiatives to improve service that may not have reached the level of visibility that they are getting today with regard to the 100-day plan. The 100-day plan is mobilizing the entire agency toward the service situation, and we're treating it with the highest priority possible.

Our call volumes are diminishing naturally, as it is the low-peak season for us, so we are using the opportunity this fall to focus our efforts on utilizing the capacity we have to effect change and pilot an experiment with new things that will move the needle come our high-peak season. That, for us, is in the tax season, which is coming very quickly in February.

5:35 p.m.

Conservative

The Chair Conservative John Williamson

Thank you very much.

Finally, we'll go to Ms. Tesser Derksen for five minutes.

Kristina Tesser Derksen Liberal Milton East—Halton Hills South, ON

Thanks so much.

I'm going to share my time with Mr. Housefather, if that's okay.

I have a question for the Auditor General's team.

In exhibit 9 in your report, there is a table where you noted how weight was dispersed across performance for an agency evaluation. Do you remember that one? The table shows that 10% of the evaluation was based on agent behaviour; 45% of the evaluation was based on productivity, which was “call handle time” and “adherence to schedule”—that is important for efficiency, I'll grant you; and the remaining 45% was based on the quality of service.

However, in the explanation immediately afterwards—and it took me a second read to catch this—your report notes that only 9% of the quality of service total was based on accuracy. In the way it was written, “45% was tied to schedule adherence,” while only 9% was “based on accuracy”, when in fact that 9% was part of the broader 45% under “quality of service”.

In your experience, what type of weight should have been placed on the quality of service and the accuracy piece? Rationally, if we're going to boost that number, we have to take it from somewhere else. Would you take it from schedule adherence?

I'm looking for some insight into that, because it was something we talked about a lot in the previous meeting.

5:40 p.m.

Deputy Auditor General, Office of the Auditor General

Andrew Hayes

With due respect to the agency, it would not be my place to be prescriptive on this. However, I think the Auditor General's comment is that 9% for the completeness and accuracy of responses—I'll paraphrase that in a different way and say precision in terms of the information being provided—doesn't send the message that there's a strong commitment to quality service.

Trade-offs have to be made, whether they're in the adherence to schedule or another area. That's a question for the agency to sort out. The Auditor General's message was clear, though. To instill a culture of quality.... Effectively, changing behaviour is about what you're measuring, and sending a message that you're interested in the enhanced accuracy of responses would merit a higher score there.

Kristina Tesser Derksen Liberal Milton East—Halton Hills South, ON

Okay. Thank you.

Was that my two and a half minutes, Mr. Chair? Okay.

5:40 p.m.

Conservative

The Chair Conservative John Williamson

Thank you, Ms. Tesser Derksen.

We now go to Mr. Housefather.