Public Accounts committee  Thank you. I too would like to thank the committee for its time this morning, and certainly the positive feedback is also very much appreciated. We are very committed to the action plan and to working with our colleagues from the Department of Finance to support them in whatever way we can.

Public Accounts committee  Perhaps we should have been clearer. That is in fact part of the assessment that we'll be doing to really understand the cause and effect, if you will. What we've been seeing over the last number of years is that as a result of globalization, an increase in cross-border transactions, and financial restructuring, for example, we're receiving an increasingly large number of complex, high-dollar transactions that are really one of....

Public Accounts committee  CRA, as you know, is very heavily dependent on technology. Over the last number of years we've implemented a number of tools for businesses and citizens. For example, they can file their taxes electronically. We continue to see an increasing number of returns filed electronically each year.

Public Accounts committee  Thank you, Mr. Chair. The CRA is responsible for administration of the legislation and interpretation of the law. I think this audit has identified some areas where we can continue to improve. We have already started to implement our action plan.

Public Accounts committee  Thank you, Mr. Chair, for the opportunity to present the Canada Revenue Agency's action plan to address the recommendations contained in chapter 3 of the Auditor General's November 2009 report. The chapter is entitled “Income Tax Legislation”. As you will be aware, the audit involved both the Department of Finance and the CRA, and I am before you today to discuss the actions of the CRA.

Public Accounts committee  CRA's position is that we did not waste taxpayers' money. Based on the information that was available to us at the time, there was insufficient evidence to conclude that corporations were putting on-account deposits for anything other than reassessments they expected in the future.

Public Accounts committee  On a point of clarification, the official was referring to accounting principles that require the amounts on deposit to be recorded as a liability on the financial statements until the reassessment of taxes owing is complete. As I indicated, I think we agree with the recommendations of the Auditor General, and we have put in place a robust action plan to deal with those findings and recommendations.

Public Accounts committee  I would like to thank the committee for having us here this afternoon. We have developed a robust administrative policy on managing advance deposits and are confident that the enhanced framework will reduce unnecessary interest costs. Thank you.

Public Accounts committee  Mr. Chair, we have no evidence that suggests corporations were placing amounts on deposit for any reason other than anticipation of a future reassessment. With that said, though, we have enhanced the framework. We are training our staff on the new procedures and guidelines, and we are strengthening our annual review process so there is an additional challenge function to make sure there is a valid reason for those funds being on deposit and we have an opportunity to have a discussion.

Public Accounts committee  Thank you, Mr. Chair. The honourable member has asked a number of questions, but let me be clear that through the new administrative policy we'll absolutely be able to enforce a refund and issue a refund. I will defer to my colleague to review some of the details of the CRA's action plan.

Public Accounts committee  Mr. Chair, I want to provide clarification with respect to 1991. That was the time when, prior to that, some concerns had been identified, and as a result Canada Revenue Agency put in place the framework and the policies and practices that we've been using. They have continued to be enhanced on an ongoing basis.

Public Accounts committee  Mr. Chair, the honourable member is quite right; obviously we're not in a position to discuss any particular file, and as I mentioned, there can be any number of reasons for a corporation to have a reassessment--

Public Accounts committee  Perhaps I could ask my colleague to elaborate a little further.

Public Accounts committee  As I said, Mr. Chair, based on the information that was available to us at the time, there is no evidence of corporations putting money on deposit for any reason other than to protect themselves. That having been said, we have developed a comprehensive action plan that strengthens and improves our administration of advance deposits in a number of ways, including the review of these accounts to determine the likelihood of a reassessment, whether the accounts should be adjusted, and whether a refund should be issued.

Public Accounts committee  Mr. Chair, that is precisely the reason the Canada Revenue Agency put in place the administrative framework. The CRA's understanding is that corporate taxpayers are making advance deposits as protective measures to mitigate against the accumulation of non-deductible arrears interest; however, in light of the concerns that were raised by the Auditor General, the CRA has further enhanced its administrative process to ensure that the need for advance deposits is validated.