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37th PARLIAMENT, 3rd SESSION

Standing Committee on Finance


EVIDENCE

CONTENTS

Monday, March 22, 2004




¹ 1530
V         The Chair (Mr. Roy Cullen (Etobicoke North, Lib.))
V         Mr. Alan Nymark (Commissioner, Canada Revenue Agency)
V         The Chair
V         Mr. Alan Nymark

¹ 1535

¹ 1540
V         The Chair
V         Mr. Rahim Jaffer (Edmonton—Strathcona, CPC)
V         Mr. Alan Nymark

¹ 1545
V         Mr. Rahim Jaffer
V         Mr. Alan Nymark
V         Mr. Rahim Jaffer
V         Mr. Alan Nymark
V         Mr. Rahim Jaffer
V         Mr. Alan Nymark
V         Mr. Rahim Jaffer
V         Mr. Alan Nymark
V         Mr. David Miller (Assistant Commissioner, Assessment and Collections Branch, Canada Revenue Agency)
V         Mr. Rahim Jaffer
V         Mr. Alan Nymark

¹ 1550
V         The Chair
V         Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ)
V         Mr. Alan Nymark

¹ 1555
V         Mr. Gilles-A. Perron
V         Mr. Alan Nymark
V         The Chair
V         Hon. Robert Thibault (West Nova, Lib.)
V         Mr. Alan Nymark
V         Hon. Robert Thibault
V         Mr. Alan Nymark

º 1600
V         Hon. Robert Thibault
V         Mr. Alan Nymark
V         Hon. Robert Thibault
V         Mr. Alan Nymark
V         Hon. Robert Thibault
V         Mr. Alan Nymark
V         Hon. Robert Thibault
V         Mr. Alan Nymark

º 1605
V         The Chair
V         Ms. Sophia Leung (Vancouver Kingsway, Lib.)
V         Mr. Alan Nymark
V         Ms. Sophia Leung
V         Mr. Alan Nymark
V         Ms. Sophia Leung
V         Mr. Alan Nymark
V         Ms. Sophia Leung
V         Mr. Alan Nymark
V         Ms. Sophia Leung
V         Mr. Alan Nymark

º 1610
V         The Chair
V         Mr. Brian Masse (Windsor West, NDP)
V         Mr. Alan Nymark
V         Mr. Brian Masse
V         Mr. David Miller
V         Mr. Brian Masse
V         Mr. David Miller
V         The Chair
V         Mr. Brian Masse
V         Mr. Alan Nymark
V         Mr. Brian Masse

º 1615
V         Mr. Alan Nymark
V         The Chair
V         Mr. Alex Shepherd (Durham, Lib.)

º 1620
V         Mr. David Miller
V         Mr. Alex Shepherd
V         Mr. David Miller
V         Mr. Alan Nymark
V         Mr. Alex Shepherd
V         Mr. Alan Nymark

º 1625
V         Mr. Alex Shepherd
V         The Chair
V         Mr. Gary Pillitteri (Niagara Falls, Lib.)
V         The Chair
V         Mr. Alan Nymark
V         Mr. Gary Pillitteri
V         Mr. Alan Nymark

º 1630
V         The Chair
V         Hon. John McKay (Scarborough East, Lib.)
V         The Chair
V         Hon. John McKay
V         Hon. Robert Thibault
V         The Chair
V         Hon. John McKay
V         The Chair
V         Hon. John McKay
V         The Chair
V         Mr. Gilles-A. Perron
V         Mr. Alan Nymark
V         Mr. Gilles-A. Perron
V         Mr. Alan Nymark
V         The Chair
V         Hon. Maria Minna (Beaches—East York, Lib.)

º 1635
V         Mr. Alan Nymark
V         Hon. Maria Minna
V         Mr. Alan Nymark
V         Mr. John Kowalski (Deputy Assistant Commissioner, Compliance Program Branch, Canada Revenue Agency)
V         Hon. Maria Minna
V         The Chair
V         Hon. Robert Thibault
V         Mr. Alan Nymark

º 1640
V         Mr. John Kowalski
V         The Chair
V         Mr. Brian Masse
V         Mr. Alan Nymark
V         Mr. Brian Masse
V         Mr. Alan Nymark
V         The Chair
V         Mr. Alex Shepherd
V         Mr. John Kowalski
V         Mr. Alex Shepherd
V         Mr. John Kowalski
V         The Chair

º 1645
V         Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)
V         The Chair
V         Hon. Robert Thibault
V         The Chair
V         Ms. Judy Wasylycia-Leis

º 1650
V         The Chair
V         Mr. Rahim Jaffer
V         The Chair
V         Mr. Massimo Pacetti (Saint-Léonard—Saint-Michel, Lib.)
V         The Chair
V         Mr. Massimo Pacetti
V         The Chair
V         Ms. Judy Wasylycia-Leis
V         The Chair
V         Hon. Maria Minna
V         The Chair
V         Ms. Sophia Leung
V         The Chair
V         Mr. Gary Pillitteri

º 1655
V         The Chair
V         Ms. Judy Wasylycia-Leis
V         The Chair
V         The Chair










CANADA

Standing Committee on Finance


NUMBER 009 
l
3rd SESSION 
l
37th PARLIAMENT 

EVIDENCE

Monday, March 22, 2004

[Recorded by Electronic Apparatus]

¹  +(1530)  

[English]

+

    The Chair (Mr. Roy Cullen (Etobicoke North, Lib.)): I call the meeting to order.

    Our order of the day is pursuant to Standing Order 81(4), the main estimates 2004-05, votes 1 and 5, under the Canada Customs and Revenue Agency, which was referred to the committee on Tuesday, February 24, 2004.

    In front of us today from the Canada Customs and Revenue Agency we have Mr. Alan Nymark, commissioner; Mr. Stephen O'Connor, deputy assistant commissioner, finance and administration branch; Mr. John Kowalski, deputy assistant commissioner, compliance program branch; and Mr. David Miller, assistant commissioner, assessment and collections branch.

    Gentlemen, I think you know how this works. After your brief presentation, we'll go to some questions and answers. Please begin.

+-

    Mr. Alan Nymark (Commissioner, Canada Revenue Agency): Thank you very much, Mr. Chairman.

    I appreciate very much the invitation to be here today. This is my first appearance as commissioner of the CCRA. From a legal point of view, it still is the CCRA until the legislation is amended by order in council. We have dropped the “C” for “Customs”, and we are now the Canada Revenue Agency.

+-

    The Chair: Does that mean no more customs duties?

+-

    Mr. Alan Nymark: You'll have to see Ms. McLellan for that.

    Through the 2004-05 main estimates, the Canada Revenue Agency is seeking appropriations for a total of $3.2 billion to deliver the mandate approved by Parliament for this agency. This 2004-05 budget request is some $430 million lower than the amount approved in last year's main estimates, and that is for the reason we were just discussing. This reduction reflects a $623-million transfer resulting from the shift of customs activities to the new Canada Border Services Agency. Later this year, we will be asking Parliament to approve a further transfer of funds from the CRA to the CBSA, once the full partitioning of the corporate support resources has been completed. Even as we transfer these resources to the new Border Services Agency, we will continue to work with our colleagues there to facilitate a smooth transition and an effective continuity of services.

    While the agency budget is decreasing overall as a result of the customs transfer, there are a limited number of additional workload requirements for which we are seeking additional funding in 2004-05. These increases are in the material before you. They are additional requirements for the children's special allowance program, the implementation of tax measure changes introduced in the 2003 budget, and the administration of provincial taxes. In addition, there are increased requirements associated with collective bargaining agreements and employee benefits. So that is the overall decrease as a result of the transfer to the Border Services Agency and a limited number of increases for those items I have just mentioned. I'll be pleased to answer questions on the detail of that in a moment or two.

    But perhaps you'll give me just a moment to touch very briefly on two or three themes, Mr. Chair, that are important to the agency and I hope are reflected well in the request for main estimates.

    The first is the issue of trust and integrity. As you know, we collect some $305 billion in revenues annually through a system that is largely based on voluntary compliance. This consent has been earned through consistently demonstrating, we think, that we are fair and professional and that we act in the public interest. In fact, 93% of filers pay on time and 90% of employers remit their tax deductions on time and accurately, and that is encouraging.

    As you know, issues that degrade the trust in the integrity of our administration put compliance rates at risk, so our approach is one of assessing and managing risks. We use, we believe, sophisticated risk assessment techniques that are able to target our efforts and resources on areas of non-compliance. On the other end of the spectrum, we provide services and information to support those who are willing to comply with the law voluntarily and without greater encouragement.

    Overall, the tax compliance risk management process is founded on the following key elements: identifying non-compliance and distinguishing compliant taxpayers from those who are non-compliant, understanding factors that drive or enable non-compliance, prioritizing compliance issues based on risk assessment, developing targeted approaches that focus on the underlying drivers of non-compliance and that maintain existing compliance, leveraging strategic partnerships, measuring success in increasing compliance, and refining our approaches through continuous learning. Further to this, we maintain a visible and credible audit presence across the country.

¹  +-(1535)  

[Translation]

    Take GST fraud as an example. Measures we use to enforce the act seek to reduce the possibility of fraud at each step in the administration of the tax. The measures are the following: a rigorous registration process; a return processing program; an audit program; high-risk analysis teams; and an investigative program.

    We are constantly improving the administration of the GST/HST. As a result, in the last year we've made a number of positive changes including: requiring SINs to be provided at the time of registration; requiring photo identification for clients registering in person; national implementation of an enhanced registration review process and high-risk analysis teams to identify potentially high-risk registrants; and the dedication of an additional 163 full-time employees to auditing returns before payment. Beyond that, we doubled the number of prosecutions for GST/HST fraud over the last few years, with a 96 per cent conviction rate.

¹  +-(1540)  

[English]

    In addition to managing risk in a globalized world, we work in collaboration with strategic partners, particularly the United States, including members of the whole international tax community.

    I'll just say a few more words before closing. Security and privacy issues also affect trust and integrity. Again, we have taken positive actions. Stringent security measures are in place across the agency to protect client information. We recently undertook a security review for CRA across the country. The final element in trust and integrity is service delivery. Through providing citizens with the right tools, the right information, and the right service we enable them to meet their obligations on their own. I have a couple of examples for you.

    We have improved the way we handle client calls through our call centres. Among other benefits, clients now have better access to agents during peak periods and expanded hours of service. We continue to reorganize and to be recognized as e-government leaders through advancements in technology. More than 40% of all individual returns were filed electronically last year, and we expect that number to grow this year. We recently introduced the “My Account” Internet service, where individuals can securely access personal account information online, and we are continuing to rationalize and allocate our resources where they are needed across the country.

    Looking ahead, we will continue to explore opportunities with our partners, in particular our provincial partners, and how we can do business in a way that serves our clients better.

    As you may know, Mr. Chair, we are in the fifth year of our role as an agency, and Parliament has required that we conduct a review in our fifth year. We will be presenting the results of that five-year review in the fall of this year.

    With those remarks, I'd be very pleased, along with my colleagues, to respond to whatever questions you may have. Thank you very much.

+-

    The Chair: Thank you very much, Mr. Nymark.

    We'll start our five-minute round with Mr. Jaffer.

+-

    Mr. Rahim Jaffer (Edmonton—Strathcona, CPC): Thanks, Mr. Chairman, and thank you to all the witnesses here today.

    I appreciate the savings, in a sense, from transferring the customs parts of the Revenue Agency over to the new department. We notice the reduction you referred to, Mr. Nymark, of approximately $400,000 thus far. I'm wondering if you have any idea of how much more will be transferred over in the process, or how much CRA will actually see in savings. Do you have any idea of those numbers yet?

+-

    Mr. Alan Nymark: Of course, these are savings to the CRA's main estimates. These won't be savings to the government as a whole.

¹  +-(1545)  

+-

    Mr. Rahim Jaffer: Right.

+-

    Mr. Alan Nymark: I believe the number so far is $643 million. It reduces to about $400 million because of our increased requests with regard to the four or five items I've mentioned. That is by far the largest amount that will be going to the Border Services Agency, but right now we are looking at the common services--HR, IT, financial--and kind of drawing lines through the staff in terms of which staff were supporting revenue and which staff were supporting customs. We hope to draw that to a close for the most part by the end of March, actually, probably with the exception of information technology. At least for the foreseeable future, I would imagine that we would continue to provide the platform of information technology to the Border Services Agency.

+-

    Mr. Rahim Jaffer: Okay, I appreciate that. I was also going to ask when you thought the transition would at least be closer to completion. At least on that side, then, it's the end of March.

+-

    Mr. Alan Nymark: In customs the first 6,000 or so--i.e., the front-line people--effectively transferred on December 12. Until March 31 essentially we'll be trying to divide those common support services. Quite frankly, that's a rapid transition for probably 9,000 people, in the end.

+-

    Mr. Rahim Jaffer: On the other side, too, I notice that there are payments to the Canada Post Corporation for special purposes. I understand that Canada Post now is going to be related under this department. Is that expected to go up any more? As more of the transfers are made and it becomes part of this department, do you anticipate any more costs attributed to that change with Canada Post?

+-

    Mr. Alan Nymark: No, that is the number we're putting in for Canada Post. It reflects two things. The first is both parliamentary mail and mail for the blind. The second is a declining appropriation that the government gives for their pensions.

+-

    Mr. Rahim Jaffer: Okay.

    You mentioned that last year, I believe, 40% of Canadians filed electronically, and you're hoping that number will increase. I'm curious to know the difference in cost between electronic filing versus traditional paper filing. What sort of savings would the department have with the potential increase in electronic filings?

+-

    Mr. Alan Nymark: Well, at the risk of getting a long answer for you, I'll ask David Miller, who is really keen on this, to respond.

+-

    Mr. David Miller (Assistant Commissioner, Assessment and Collections Branch, Canada Revenue Agency): You have to remember that with electronic filing all you're really doing is substituting the data capture part of it--that is, someone going through all the material in the envelope, sorting it out, and filing the information once the data capture has taken place. The rest of our process is identical.

    We estimate our savings on the individual program, the T1 program, to be about $2 a return. Our target this year will be to increase, hopefully, the number of electronic filers by about a million. That would mean $2 million worth of savings for us, and would also mean that we wouldn't have a pile of paper six miles high to sort through, process, and then otherwise file.

    It's more than just the savings throughout the system. For many people it is more convenient using the telephone or one of the other electronic services.

+-

    Mr. Rahim Jaffer: Okay.

    Mr. Nymark, with regard to the five-year review that you mentioned is coming up in the fall, there's one thing I just want a bit of clarity on. I know that at some point last year, there was evidence that some of these tax files had unfortunately been stolen because of some laptops that had gone missing at Laval University. I think it was Minister Caplan at the time who said that there would be a full review done on the security of the whole department. Just from visiting the building here and seeing the security measures that are in place, I know that is something the CRA takes very seriously. However, was that review ever conducted, or will that in fact be included in this fall review that you mentioned, the five-year review of CRA?

+-

    Mr. Alan Nymark: Was it ever conducted? It certainly was. Let me try to recall the elements of it. First, from a policy point of view, what is our security policy? Second, from the point of view of our infrastructure, is it secure? Third was from the point of view of our information technology, fourth awareness, education, etc. If you've been in our building recently, you will have seen we have simple things such as posters on the walls, “Security is our Business”, etc., but we've also gone into training programs for our managers and that kind of raising of awareness across the agency.

    Those are all fundamental reviews that are ongoing. Out of those reviews we said, what have we learned in the first few months of looking at this issue that we could implement right away? We proceeded with a set of actions across the agency as a result. So we can report on the full phase by the time we get to the five-year review, but we didn't wait for finalization of reviews; we've taken action across the board on security issues, particularly related to IT.

¹  +-(1550)  

+-

    The Chair: Thank you, Mr. Jaffer.

    Monsieur Perron.

[Translation]

+-

    Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ): Thank you, Mr. Chairman. Good afternoon gentlemen, thank you for being here.

    I want to continue discussing the issue we have just broached. Information thefts have occurred in Laval; we're talking about the files of several tens of thousands or hundreds of thousands of citizens. My concern is the following: what have you done or what are you going to do to help the victims of information thefts, those whose bank accounts numbers, social insurance numbers, and so on and so forth, have been stolen? I would remind you, Mr. Nymark, that this is the fifth break-in to have occurred at the building in Laval. Perhaps only documents were stolen, but this is the fifth break-in at this building. What have you done or what do you intend to do?

+-

    Mr. Alan Nymark: Thank you, sir.

[English]

    The first point I would make is on identity theft. We have no indication at all from either the local police or the RCMP, which have both been involved in the investigation, that identity theft was at play in this particular break-in. I do not know if the investigation is complete, but we took the precaution of giving the information to those who were listed on our databases to ensure that they could take whatever action they would like to protect themselves should there be identity theft involved. The police have not suggested to us that in fact the break-in was directed at identity theft. The investigation is not complete; that is our information today.

    That there were several break-ins at Laval is true. With each case, the level of security has been increased to the point where there are three to four levels now at Laval, ranging from enhanced in-person to, at the most extreme, bars on all the windows, but there are also two other kinds of security available at that building. As far as I'm aware, there haven't been any break-ins since the case you're referring to, and the level of care is very high indeed.

    As you know, the case you are referring to was the theft of a unit that should not have been left in the open. Our policies clearly indicate that the kind of computer that was stolen should not have been left in the open; it should have been left behind a locked door. It was out for servicing and, by coincidence or not, it happened to be the night that there was a break-in. Our policy, as it is across the country, is that all processing units of that sort should be behind locked doors inside all the security measures that are in place. We have had advice from our special investigative unit and others as to whether there are any other security measures we could take at Laval to protect our computers and any other materials that are held there. We are quite open to any suggestions in that regard, but I believe it is a secure establishment.

¹  +-(1555)  

[Translation]

+-

    Mr. Gilles-A. Perron: I was surprised to hear you say, at the beginning of your presentation, that you are not aware of any document theft. I would like to remind you that there was at least one case of a Quebecker who fell victim to attempted fraud. The perpetrator tried to use this person's social insurance number. I can tell you who this person is: his name is Mr. Chrystian Gravel. In fact, Mr. Gravel launched a class action suit against your agency, sir. Several cases of this type have been reported in Quebec: the fraud attempts were directly related to information held in your computers, dear friend.

    I think the biggest problem in Laval is due to the moving of the Revenue Agency's offices. For years, they were located on Saint-Martin Boulevard, in a very secure building. You never had any break-ins, but your offices were moved to a building which belongs to the Laval bus drivers' union, for a reason still unknown to us. The new building in Laval is less operational than the old one.

[English]

+-

    Mr. Alan Nymark: Thank you, Mr. Chair.

    On the issue of identity theft, again, this is under investigation by the police. You have made some statements in terms of direct relationships between certain events and the theft, and I would have to say that we should await the results of the police investigation.

+-

    The Chair: Thank you very much, Monsieur Perron.

[Translation]

    Mr. Thibault, go ahead.

+-

    Hon. Robert Thibault (West Nova, Lib.): Thank you very much, Mr. Chairman.

[English]

    Mr. Nymark, gentlemen, thanks for coming. Thanks very much for your presentation.

    I recognize that cost saving isn't the reason for changing the agency and for moving border security to another administration. From your experience, from what you can tell so far--I would assume that this won't be a cost saving but that it will mean additional costs--have you found out how much more it's going to cost us by moving that part of your service to another administration?

+-

    Mr. Alan Nymark: Mr. Chairman, through you, with respect, I think that question should be asked of the new agency, not the old agency.

    I can tell you we will be saving money. I cannot tell you how much additional money may be required, although I do believe the President of the Treasury Board has certainly made his position clear, that these machinery changes should be largely cost neutral.

+-

    Hon. Robert Thibault: Then you're telling me you have a net saving if you remove that amount from your department, those services being gone also.

    If you looked at your budget last year and you said, okay, we weren't providing that last year and we're still providing what you have in your budget, what would the net change in your budget be? Would it be an increased cost? Would the fact that we're having an increased number of returns being processed electronically, which I presume gives you some savings with the benefit of all those, mean you'd have a net increase or decrease, and roughly by how much?

+-

    Mr. Alan Nymark: Mr. Chair, through you, from our point of view we are simply transferring activity, human resources and financial resources, to ensure that activity can take place in the new agency as though it took place in the old agency. From our point of view, this is not increasing our productivity; this is a straight transfer of resources to do the same activity there as was done in the agency. The degree to which the new agency may face pressures would seem to me to be at least partly dependent on the efficiency with which they provide their common service versus the efficiency we provided in the old agency.

º  +-(1600)  

+-

    Hon. Robert Thibault: I'm not talking about your remainder services. For your remainder services, in your remainder budget you can tell us you're saving money, but you're not providing the huge amount; you have 6,000 fewer employees.

    In the remainder services you're providing, what is the net additional reduction in costs for those?

+-

    Mr. Alan Nymark: It is neutral as long as we are providing the same resources to the Border Services Agency. We have sufficient money left in our budget to service the tax services, and there should be no effect on the tax services at all.

+-

    Hon. Robert Thibault: But you have some collective agreements that increase your costs. You have other elements of your operation that are reducing your costs, e-filing, for example. In that area, at the end of the day, with the remainder of the operations you provide and by taking out the border services, are you increasing your costs by 3%, reducing them by 3%, or what?

+-

    Mr. Alan Nymark: There are a few areas where we are asking for increased resources, which I named in my opening comments. The 2003-04 main estimates were about $3.6 billion. If you subtract the $623 million, which I mentioned, for the Border Services Agency, you reduce the budget by a further amount as CCRA's contribution to the reallocation exercise of last year, which will continue again for this year. We are then asking for new funds in 2004-05 for the issue of children's special allowances; for budget 2003, administrative items--

+-

    Hon. Robert Thibault: There's another question I wanted to get to. So in the interest of time--

+-

    Mr. Alan Nymark: I'll give you the bottom line. That adds up to a net request, therefore, on our part of $3.2 billion.

+-

    Hon. Robert Thibault: The $420 million less is the transfer, but the cost of those operations was more than $400 million last year. It doesn't answer my question, but I'll go to another one that is more general.

    On the matter of border security--I know it's no longer yours--the question that was being batted around for a couple of years was whether we should arm or not. From my experience at the fisheries department, I have great reservations about arming people unless you absolutely have to. I wasn't very comfortable with the thought of arming them. I've seen what it has done in the province of Nova Scotia with our game and fisheries officers.

    I know a lot of officers who worked in your service, and they never approached me--that is, any of my constituents, or very few of them--to ask me to support arming them, but their union representatives did. Where is that question now? Is that question resolved? If so, how is it affecting the morale of those workers?

+-

    Mr. Alan Nymark: Mr. Chairman, I shouldn't speak on behalf of the Border Services Agency, and I may be out of date, but I believe in November 2003 there was an announcement made by the Government of Canada that there had been a policy decision that any requests for arming would have to meet certain criteria. At that time, it was indicated that it was unlikely that Border Services individuals would be able to meet the criteria of the policy of the Government of Canada. That is where it was at the last time I was responsible for those items. There may have been developments since, but I am unaware of them.

º  +-(1605)  

+-

    The Chair: Thank you, Mr. Thibault, Mr. Nymark.

    Ms. Leung.

+-

    Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Mr. Chair.

    I understand that the tax service is the largest business line under CCRA, and from 2002 to 2005 the agency's estimates will rise from $71 million to $2 billion. That is quite an increase. Can you explain?

    First of all, how does the tax service really generate revenue? Also, why is there such an increase? Can we increase the revenue at the same time?

+-

    Mr. Alan Nymark: Could I ask for a repetition of the figures you've used?

+-

    Ms. Sophia Leung: In 2004-05, the agency's estimates will rise from $71 million to $2 billion--unless I have the wrong figures, but it's in the report.

+-

    Mr. Alan Nymark: The 2003-04 number is, in fact, $1,955,803,000. It's up very marginally, actually, to $2,027,733,000. So it's a very marginal increase.

+-

    Ms. Sophia Leung: It's almost double. Is that right? You say it's--

+-

    Mr. Alan Nymark: No, it's up $70 million on $2 billion.

+-

    Ms. Sophia Leung: Okay.

    Can you explain how you generate your revenue from the tax services? Can that be increased? That was my other question.

+-

    Mr. Alan Nymark: It's a very good question, because we do have a lot of resources. One of the significant issues we have is, where do we allocate those resources, and should we be allocating those resources to the area of highest risk of non-compliance with the tax laws or should we be allocating those resources to those areas where we think we could raise the most money? It's a balance between the two, frankly. Our experience with our risk management system is that whenever we are allocated new moneys through the budgetary process, and through the parliamentary process, we can return greater new revenues than the expenditures that we actually make on raising those revenues.

+-

    Ms. Sophia Leung: I have another question, maybe not really related. We have heard a lot about tax evasion, and the question has been raised many times with the agency. What kind of improvements have you made on that?

+-

    Mr. Alan Nymark: We do have an underground economy compliance program, which involves outreach with particular sectors in the economy that have larger than usual compliance problems. I think it's well known that one such sector is the construction industry, so we work closely with the construction industry to ensure that their members are aware of tax obligations. We do special audits in that area. We enter into partnerships with provincial governments, as with the Province of Quebec in connection with the construction industry. The Government of Ontario has recently approached us to develop a partnership on the construction industry. We compare notes with our partners around the world, the United States, the U.K., Australia, and others, to see what techniques they use.

    We feel, whenever we press further in the area of the underground economy, if our only point of view were to raise revenues, that would certainly be an area where we could focus resources.

º  +-(1610)  

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    The Chair: Thank you very much, Ms. Leung.

    Mr. Masse.

+-

    Mr. Brian Masse (Windsor West, NDP): Thank you, Mr. Chair.

    You mentioned in your opening comments that 93% of individuals file on time, and I believe you said 90% of businesses file on time. Can you tell us the numbers for the 7% of individuals who don't file--how many files that is, what the value is--and similarly for the 10% of businesses? What is the cost of those files?

+-

    Mr. Alan Nymark: I'll ask my colleague David Miller to try to answer that. If we can't give you the individual numbers, we'll be delighted to supply them in writing, but we'll take a first run at it orally.

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    Mr. Brian Masse: I'd appreciate that.

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    Mr. David Miller: I'll try to address it in a general sense. When we talk about those individuals who pay on time, the 93%, that means we take no further action; the money is in the door by the time we get to April 30 in most cases. The next question is whether we should give them a phone call or actually send them a letter saying they owe us money. That's when the accounts receivable have been established. That's when those returns and those amounts start to come in. The value of the amounts owed by individuals I'm not going to be able to break down; I've got it overall. The important thing here is that the 90% and 93% represent filings without any initiative on our behalf to get that money coming in. In many cases, to get them to pay, whether it's companies or individuals, it's simply a matter of following up with a phone call or, in some cases, correspondence. After that, we get into our hardcore collection, where we have to pursue some of the legal means we have to get that money.

+-

    Mr. Brian Masse: Maybe I can get that from you in the future. I'd be interested to know that, and also how much it costs to pursue some of the files based upon their value. Obviously, if you make one phone call to prompt somebody--I guess striking the fear of God in them, with the government calling them--some people respond, while other people are a little more sophisticated in their defence against paying their taxes, and it might require legal assistance from your department. I would be interested to know the costs that are incurred.

+-

    Mr. David Miller: We do carefully keep track. For example, the amount we get through just phoning individuals the first time is $1.4 billion.

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    The Chair: Mr. Miller, if you have information, you can send it to the clerk, and then we'll circulate it to all the members.

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    Mr. Brian Masse: That's great. Thanks, Mr. Chair.

    I would follow up now with a question about your negotiations currently with PSAC. Where is that matter at this time, and how have you accounted for it in your budget?

+-

    Mr. Alan Nymark: I'm not sure what happened today, but we were in conciliation last week. We had put a monetary offer on the table. The union had not responded with a change in its request; I believe it was still 8% per year. By the end of the week the conciliator had concluded that there was no value in pursuing the discussions at that time. I haven't checked today whether the union has filed for a conciliatory board action. So that's where the negotiations are.

+-

    Mr. Brian Masse: Why has it taken so long to get a new contract? I believe it's been since October 31, 2003, that there has been no contract. This is the hand that feeds the government in many respects, providing the revenues. Why has it taken so long?

    More specifically, going back to my earlier question, how is that affecting the collection morale, and is there enough support there for people to pursue the delinquent files that pay dividends at the end of the day? With, for example, the IRS in the United States, there have been indications of how much money they're losing by not having the appropriate supports and working environment. Do you feel that is happening in your department right now?

º  +-(1615)  

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    Mr. Alan Nymark: No, I don't believe that's happening in the department right now. I believe our compliance approach is second to none in the world, and I say that with some humility, having only been in the department for nine months. We spend a lot of time with our international colleagues, and I think we are at the leading edge of compliance activities.

    As far as morale in the department goes, I think it is good. We are in a period of transition, particularly with the Border Services Agency leaving. Personnel who once worked together will now be working apart. So you can expect some kind of impact from that, but I think overall the agency staff have understood the new paradigm of security for the customs service and the division is being well accepted. So I don't think overall there's a negative impact from that either.

    As to why it is taking so long, this is my first round of collective bargaining negotiations. I'm informed that this is the pattern of collective bargaining negotiations and it is not outside the ordinary in the length of time. We are, I think, about a week or two ahead of the Treasury Board, looking at the negotiations for the overall Government of Canada. So we have not fallen behind the rest of the government; we've kept up and, in fact, have been just a little ahead of the rest of the Government of Canada.

    As to willingness to engage in more intensive discussions, I met the leads of the two unions in the agency in the summer. The normal course of events is that you meet for three or four days, break for a few weeks, meet for three or four days. They asked if, on this occasion, we could meet more intensively for full weeks at a time and schedule additional negotiating sessions. We did that. We cancelled one negotiation session, along with Treasury Board, in January, and we did so in order to refresh our mandates with the Government of Canada. So we only missed one negotiation session, and then we went back to the table in February.

+-

    The Chair: Thank you, Mr. Masse.

    We'll go now to Mr. Shepherd.

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    Mr. Alex Shepherd (Durham, Lib.): I was sort of interested in the comments about e-filing. I think in some of your numbers you talked about an increase of $70 million on a budget of $2 billion, which is roughly 3.5%. That exceeds the rate of inflation, so I'm not sure it isn't higher than we would anticipate.

    More importantly, if there's one department of government that you'd expect to benefit from a technology dividend, if I can use that analysis, it's yours. When I think of the $2 figure you gave me for filing a return, a little red flag goes up. It seems to me that with e-filing, your savings have to be far greater than that. When I look at the filing of manual returns, they're prone to mistakes, they have to be corrected, and there have to be reassessments made. It seems to me that the benefit would be far higher than $2 per return, so I guess I'm asking how you got that figure.

    In addition, with all this technology we have available to us and another million people who you say are going to come into the system--which is substantial, based on the number of filers--why aren't we seeing the actual costs of the department go down? Instead, you're asking for this 3.5% increase.

º  +-(1620)  

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    Mr. David Miller: Perhaps I could address the part about the $2 figure. The part I didn't mention on the savings is that one of the joys of moving from paper returns to electronic returns is that there is a different infrastructure that you have to support, in terms of both a help desk for individuals who are trying to file electronically, and the servers and other support necessary to allow several million returns to come to us in a very short period of time. So in actual fact, if we net those two out, the incremental cost of providing electronic service has almost been equal to the savings we've had from additional electronic filing.

    The $2 number was derived from having a good understanding of how much it costs us to process a return on paper. You're correct that by having electronic returns we do save on mistakes and on not having to go back to the client. All those basic calculations are correct by the time we receive them. We also save on any errors that may have occurred in the data entry field. That's all part of the $2.

    Right now, although we have 24 million Canadians who file individual tax returns, we budget for each one of our seven tax centres on the basis of how long it takes to do a specific component of the transaction, down to the point where we expect a particular aspect to take two minutes and 33 seconds. If they have a million of them, then we budget on that basis. So that's how fine-tuned our system is, in terms of allowing numbers to be lined up with the expected number of returns we'll get under that method.

    Quite honestly, we've used the savings we've made within the organization to make investments in electronic filing, to make the kind of evolution to allow both businesses and individuals to actually use the Internet, or even the telephone, to make their returns. We've reinvested savings in one part of the program to improve either service or enforcement activities, depending on relative priorities.

    But in the bottom line, with the over $2 billion for tax services, a $2-million savings through additional filing electronically is a small component; it's one-tenth of 1%. But it helps us with the flexibility to move from lower-value-added activities to higher-value-added activities.

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    Mr. Alex Shepherd: Presumably you're saying we have the investment in the infrastructure, therefore future budgets should actually require less expansion. We shouldn't be seeing increases in this department in the future because we should getting some benefits out of this technology that you've invested in.

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    Mr. David Miller: Mr. Nymark mentioned one of the reductions we're doing as a government. We're moving money, through reallocation, from lower to higher priorities, so there are several reduction exercises going on, mostly government-wide.

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    Mr. Alan Nymark: As part of our approach to our budget, we are constantly reallocating from lower priorities to higher priorities. Secondly, we are constantly driving the business line to apply technology to the point where they're getting productivity savings out.

    The productivity savings we get from the application of technology do not necessarily flow back into the agency. They are often taken out of the agency to the Government of Canada. So we often negotiate with Treasury Board to keep the savings that result from the application of technology.

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    Mr. Alex Shepherd: It's a sore point with Treasury Board, because Treasury Board is asking the same questions as I am. They want to know where the savings are, and they should be able to reduce your budget.

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    Mr. Alan Nymark: Well, out of the productivity enhancements that we have achieved through the injection of funds over the last number of years, I believe that this year, for example, we have a productivity number of about $44 million that we're returning to Treasury Board.

    You asked if a 2.5% increase in our tax services budget is a large number or a small number. It's certainly not a small number, but is it explainable beyond the cost-of-living increases? I guess my answer to you on that is that the volume in the business we do grows every year. Secondly, much of those funding is for new projects that the Government of Canada asks us to do through budgetary allocation; we do those projects.

    So this is not just drift in a larger budget allocation. Every part of the 2.5% increase that we have had over the last year is for a specific purpose.

º  +-(1625)  

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    Mr. Alex Shepherd: According to me, it's 3.5%.

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    The Chair: I think we've run out of time, if you don't mind.

    We'll go now to Mr. Pillitteri, please.

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    Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you very much, Mr. Chairman.

    I'm going to be asking questions along a little bit of a different line of questioning.

    One is that, of course, you're very happy that customs has left your portfolio, because if anything, given the state of the border issue, it is where a lot more expenditures and costs are to be incurred. In representing the riding of Niagara Falls, I would have been the first one here to say to you, look, the whole border issue is under-staffed and under-funded and therefore needs more money, as I don't think you have enough over here. But seeing that you've increased the estimates, and given that you are losing revenue, I think there's enough of a cushion there.

    But I'm going to go on a different tack. This year in the tourist industry, in 2003 specifically, there was so much of a downturn in the economy as far as the SARS aspect of it is concerned, and especially in the whole part of southern Ontario and in anything tourist related.... I see here that you had some 92,000 appeals in 2003-04. So you're looking at about 95,000 appeals, and what you were successful at in return.... I think this is an area where the percentage you're anticipating could possibly be even higher than that. Being a businessman, I'm pretty sure there'll be a hell of a lot more appeals in one part.

    The other thing I'd like to ask you about is, how considerate are you going to be with this? Being a member of Parliament, I know how unreal and how untrue it is when they're filing their taxes. They don't understand that we do not make any money; they don't understand that we're in the red. They don't understand any of this.

    So what is your proposal? I think you will have more appeals than that...and a seven-year return. You know, putting back seven years in order to re-file their taxes and so on, I think your number for that could be low.

    Do you anticipate any changes from this?

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    The Chair: Mr. Nymark.

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    Mr. Alan Nymark: First of all, I would not agree with the premise of the introductory part of your question in terms of our emotional state with the departure of customs!

    Some hon. members: Oh, oh!

    Mr. Alan Nymark: There is no question, however, that it's a very fast-changing world globally; and therefore customs is in a very dynamic environment with a lot of pressures. It's also a very exciting place to work. It's extremely important for Canadians, given the degree to which we rely on international trade, for example, for our incomes.

    So we're sorry to see our brothers and sisters in customs depart, but as I said, I think the agency understands and agrees with the security paradigm being paramount. The revenue aspects of customs are a relatively minor part of the border responsibilities these days, so it makes a great deal of sense for it to be in the security agency.

    On members of Parliament filing their tax returns, I—

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    Mr. Gary Pillitteri: I'm not referring to members of Parliament. I was referring specifically to business people.

    A voice: Who are members of Parliament.

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    Mr. Alan Nymark: I must say this is not a forecast, because we're not in the forecasting business. The Department of Finance is in the forecasting business. But if you were asked, David, today how it's going with the current collections in the tax filing system.... It's going quite well. The economy has obviously been sufficiently robust that the revenues are coming in and we're not seeing a particular problem there.

    On the aspect of appeals, do we see a cyclical tracking of appeals with the rate of growth in the economy? I don't know the answer to that question actually. I would like to look into it for you.

    On the issue of the time it takes for appeals, we're working very vigorously right now to see if we can reduce the queueing in our appeal system so that we can get timely responses out to those who do file appeals.

º  +-(1630)  

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    The Chair: Thank you very much, Mr. Pillitteri.

    Mr. McKay.

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    Hon. John McKay (Scarborough East, Lib.): Thank you, Chair, and thank you, witnesses.

    There are a couple of questions here generated by the Library of Parliament that I thought were quite surprising. The first has to do with the jump in FINTRAC suspicious financial transactions, which go from 3,700 up to 2.2 million. I would have thought 3,700 was a large number of suspicious transactions, but 2.2 million....

    Is there some explanation for why that number is so large? Is there some sort of profile? Is it an issue of legislation or is it just an issue of FINTRAC getting underway?

    Oh, I'm sorry. I'm told that question should be directed to Finance, as would the second one, then.

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    The Chair: You can answer that yourself.

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    Hon. John McKay: I'm supposed to be able to answer that myself. Oh, well, there you go. It was a brilliant question, though. I'm sure you'll agree with that.

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    Hon. Robert Thibault: I'd like to apologize for waking the member up.

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    The Chair: We'll deal with the motion at the next meeting, right?

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    Hon. John McKay: Those were my two questions, which are gone now. So thank you for those brilliant answers.

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    The Chair: Well, thank you, Mr. McKay.

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    Hon. John McKay: I think I should allocate my time to Mr. Shepherd. It was actually on a line of questioning that I thought was pretty good.

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    The Chair: I'm sure the questions were brilliant and Finance will be happy to answer them if indeed they come up in that context.

    Mr. Perron had a quick question, I believe, and then Ms. Minna. Then we'll try to wrap it up.

[Translation]

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    Mr. Gilles-A. Perron: I suppose it is because of a lack of time that you did not answer the second part of my question earlier. What were the reasons which led the Canada Customs and Revenue Agency—and I'm not talking about you, Mr. Nymark, because it was before your time—to leave the old building on Saint-Martin Boulevard, to go to Laval? All employees were against this move, including a good portion of management at HRDC for the region of Laval as well as the minister at the time. Some members asked questions in the House for which there were no answers. I hope you will give me an answer, please.

[English]

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    Mr. Alan Nymark: Well, I apologize for not answering earlier, and also--unless one of my colleagues wants to jump in here--it was before my time as commissioner. With due respect to your question, I'd like to research it and give you a proper answer so you'll have the basis upon which we made that move.

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    Mr. Gilles-A. Perron: I'd be pleased. I hope it's not for a political reason that you guys moved out.

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    Mr. Alan Nymark: I must say it's a good-looking building.

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    The Chair: Thank you. If you could send that through the clerk, we'll distribute it.

    Ms. Minna.

+-

    Hon. Maria Minna (Beaches—East York, Lib.): I want to go back for just a moment to the issue of the underground economy, which seems to come up all the time. I had a meeting in the last several months with the construction industry in Toronto. They are very gung-ho and are always talking to me about this issue themselves.

    First of all, the major part of the underground economy tends to be in renovation in terms of construction and in some other areas. They were suggesting that if the government were to implement some sort of tax credit, or what have you, for the renovator, that is, the householder, this would encourage people to get receipts. If they can deduct some of it, then they're going to want a receipt, which will then, to some degree, oblige the renovators to provide receipts or they're not going to get the jobs. Some sort of scheme of that nature would, to some degree, catch...and I think they were talking in the order of billions of dollars that could be recovered by whittling down the underground economy.

    I wonder if your department has done any studies or any research in that area at all or has had discussions with the different industries on that matter.

º  +-(1635)  

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    Mr. Alan Nymark: Like Mr. McKay's question, since that question involves tax policy, the appropriateness of a tax credit is best directed to the Department of Finance.

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    Hon. Maria Minna: You might have had some understanding....

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    Mr. Alan Nymark: I could offer personal views about that, but I'm not sure that the Department of Finance would like that.

    Could I ask, John, if on the compliance side vis-à-vis the construction industry, you could perhaps outline some of the work that we have undergone?

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    Mr. John Kowalski (Deputy Assistant Commissioner, Compliance Program Branch, Canada Revenue Agency): I would be pleased to. Thank you very much.

    You're right, we have heard that kind of suggestion as well. As Mr. Nymark pointed out, Finance officials are aware of that particular suggestion, and it would be up to them to decide if they wanted to pursue that or not.

    We have quite a robust relationship with the construction industry. We have a lot of partnerships, particularly with the Canadian Home Builders' Association, which deals a lot with renovations. We're working with them actually on the Get it in Writing! campaign, and we're now into phase three of that campaign.

    We started off with a little pamphlet on the underground economy, and it went on to awareness sessions for contractors, where contractors could learn certain things in their dealings with consumers to encourage consumers to deal with above-board contractors as opposed to the underground economy.

    Now it's also shifted into a social awareness campaign, where we're trying to educate consumers through fora such as the home shows that are carried out across the country on the risks of dealing with the underground economy. So we're trying to get them to know that there are certain liability issues if somebody gets hurt on your site--and you're personally liable if somebody gets hurt on your site. There are warranty issues if you're dealing with the underground economy. If something goes wrong and you want them back in six months, they may not be around because they're not a legitimate business, and so on. It's been quite a successful partnership with the CHBA in that regard.

+-

    Hon. Maria Minna: For the rest, I'll have to go back to Mr. McKay.

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    The Chair: Okay, thank you, Ms. Minna.

    We have Mr. Thibault, Mr. Masse, and Mr. Shepherd with a couple of quick questions, and then we'll wrap it up.

    Mr. Thibault.

+-

    Hon. Robert Thibault: Thank you, Mr. Chairman. Thank you very much to the committee for their indulgence.

    I don't know if it's right to ask you the question without having given you prior notice. I don't expect that you would have the details now. It comes back to the underground economy again and compliance.

    My riding has a lot of fisheries and a lot of lobster fisheries, and I always say that our lobster fishery is the most prosperous single fishery in all the country, with $400 million in reported earnings. True earnings are probably $600 million-plus annually. It's a big concern to the industry itself, because it gets increasingly difficult for the legitimate businesses to operate. They're forced, for competitive reasons, to operate in the underground economy. They can't get access to resources unless they pay part of their purchase price cash, because the fishermen are in a higher income bracket and they like to get as much revenue as possible.

    So your department has been doing a lot of work with the Department of Fisheries and with the industry. I'd be interested in knowing at some time from the department what information you can provide to us on how that's progressing, and if you see the light at the end of the tunnel on that file.

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    Mr. Alan Nymark: Maybe John would like to supplement my response, but we would be glad to provide the information to you.

    Certainly in Atlantic Canada it is perhaps even more important than the construction industry on a relative basis for the underground economy. We have a very clear program there to deal with it in cooperation with Fisheries and Oceans Canada, as well as with the provincial governments. It is a priority for the agency.

    John, would you like to say a word or two?

º  +-(1640)  

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    Mr. John Kowalski: Sure. You're absolutely correct, we did receive a number of representations from industry associations and producers that the growth of the underground economy was having a serious and negative impact on their own businesses.

    We certainly took that seriously. We began working with the Province of Nova Scotia, other federal departments, other provincial governments, and professional organizations. There are monthly meetings on the underground economy dealing with lobster and other issues as well.

    In June 2002 there was an MOU signed where we would be delegated the authority under the provincial legislation--this would be agriculture legislation--to determine whether seafood buyers, processors, and harvesters have met their record-keeping obligations under the Nova Scotia Fisheries Act. In the conduct of our own audits, we were able to do that on behalf of the provinces as well.

    There is quite a rigorous process underway. We do expect that there will be a significant number of people, in the hundreds, who will be subject to compliance audits and to possible assessments, including interest and penalties for any amounts that they have evaded.

    We have referred a number of results, from this joint MOU that was mentioned, back to the province. They have the ability to amend or suspend or even cancel the licences of people who aren't doing what they are supposed to be doing in accordance with the legislation. There have been quite a few good initiatives and good progress in the file.

+-

    The Chair: Thank you, Mr. Thibault.

    Mr. Masse.

+-

    Mr. Brian Masse: Thank you, Mr. Chair.

    CCRA started a process of relocating jobs related to employees on international trucks in customs and revenue from Windsor. Some went to Ottawa already. The plan that is supposed to evolve is that then they would be relocated to Toronto.

    We have 14,000 trucks per day that go through our border. We already have enough problems. The agents on the ground floor at the border are able to work with the brokerage agents. As well, there are other problematic issues related to faxing hard copies and documents that are required for the international MOU.

    What is the plan for that figure? Will that be happening? Will the employees be moving out of the Windsor area? Is there going to be a review about the logistics and, I guess, the effect on revenue and customs in taking those employees out of the ground area, where all the action is happening, and putting them in Toronto, where they are not connected to the broker agents, the truckers, and the American officials?

    It's such a huge problem for our community and for Canada. The concerns that I'm hearing, even from the broker agents and the staffing component, is this is going to add further delays and problems.

+-

    Mr. Alan Nymark: I believe, Mr. Chair, that needs to be directed to the Canada Border Services Agency. They have been responsible since December 12 for any administrative actions such as the ones you're describing.

+-

    Mr. Brian Masse: Can I get maybe get that confirmed?

    The process did start in your department, though. There were jobs moved out of the Windsor area to Ottawa. If you could answer that part, maybe in the form of a letter to me, later to the committee, that would be fine, and then forward the rest to the border security agency. I only want to clearly define exactly where those people are going to end up at the end of the day and how the process can be reviewed.

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    Mr. Alan Nymark: What I can undertake to do is to speak to my counterpart at the Canada Border Services Agency and get back through the chair.

+-

    The Chair: Okay. Thank you very much.

    Finally, Mr. Shepherd.

+-

    Mr. Alex Shepherd: I have one quick question. Mr. McKay raised the issue of FINTRAC. There is a CCRA question in here. It seems to me, when the legislation was going through, that in fact they exempted information flowing to CCRA for compliance purposes.

    I'd be interested in knowing, of the 2.2 million cases, how many of them have been referred to CCRA and how many of them have resulted in positive assessments.

+-

    Mr. John Kowalski: I don't have the information at hand. I recall looking at it a couple of months ago and having some preliminary numbers on it. We can get back to you with the exact numbers.

+-

    Mr. Alex Shepherd: And you'll report back to the committee?

+-

    Mr. John Kowalski: We can do that, yes.

+-

    The Chair: Thank you. Please refer that through the clerk.

    Thank you very much, Mr. Nymark, to you and your colleagues for being here today. Thank you very much for coming. We'll call this part of the meeting adjourned.

    We have a motion from Ms. Wasylycia-Leis that we're going to try to deal with quickly.

    Ms. Wasylycia-Leis.

º  +-(1645)  

+-

    Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairperson. I'm pleased to have this opportunity to present a motion that I believe is consistent with the reform of our committee structure and is now the practice of at least two other committees. It is, with all respect to the parliamentary secretary for finance, to suggest that he ought not to be on this committee as a voting member. So the motion really seeks that the government whip remove the parliamentary secretary for finance from this committee.

    The purpose of the motion is to further exemplify our wishes as a committee to be independent of any government influence, to certainly encourage the parliamentary secretary to be here to observe, and even to participate if he wants to request the right to speak, but not to be here as a full voting and speaking member of the committee. This is the case now certainly with respect to the agriculture, defence, and industry committees, and I think it's becoming an accepted practice in terms of our new view of the role and function of committees.

    I would therefore urge members to support this motion in the spirit of the ongoing positive work of this committee.

+-

    The Chair: Thank you, Ms. Wasylycia-Leis.

    Monsieur Thibault.

+-

    Hon. Robert Thibault: I have a little bit of difficulty with the motion. I understand where the member is coming from, but I have a little bit of difficulty in telling any political party who they should and shouldn't appoint. If we ask a party not to appoint parliamentary secretaries, do we at the same time ask all parties not to appoint their critics? The critics will tend to bring forward the accepted position of the party, as the parliamentary secretary, we would assume, is going to be bringing us the point of view of the minister or of government. I think that's quite valid and quite valuable to have. I think it's an important part of the discussion.

    So that would be my concern. I think it's an addition to the committee to have that link, to have your parliamentary secretary, who tends to be well-informed. He sometimes asks questions that are for another meeting--

    Some hon. members: Oh, oh!

    Hon. Robert Thibault: --but we forgive him that much. He anticipates future meetings very well.

+-

    The Chair: Thank you. Any more debate?

    Ms. Wasylycia-Leis?

+-

    Ms. Judy Wasylycia-Leis: I'd like to respond to Mr. Thibault's comments, if I may. I don't want to shut off debate, though, if anyone else would like to speak. Let me say that the purpose of the motion is not to deny representation from each political party to express the views of his or her party. The purpose of the motion is to draw the line between the government of the day and the parliament of the day, and the committee system is a reflection of Parliament. It is meant to be that mechanism, that body, that allows for in-depth discussion and review of the areas--in this case finance--separate and apart from the will of cabinet and the wishes of the government.

    So while I know that to date our parliamentary secretary has not tried to overly influence the direction of our committee, there is certainly always that possibility. I would hope that we would want to make sure that our committee always reflects our concerns as parliamentarians and that we have that opportunity free from the influence or subtle pressures of a parliamentary secretary, who is a representative of the government and who now sits at the cabinet table.

    I think it's important, just from the point of view of the workings of the committee system, that we consider this as a very constructive suggestion. Other committees have done this precisely for that reason, that it reflects the spirit of the new way in which we're doing the work of committees--since last year when we embarked upon the election of the chair and made a commitment among ourselves to try to act in a more independent and more thoughtful way on an ongoing basis.

º  +-(1650)  

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    The Chair: Thank you.

    Mr. Jaffer.

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    Mr. Rahim Jaffer: I do understand what the motion is trying to do, and I agree with the aim of the motion to keep our committees as independent from the House as possible, because that's where a lot of business can get done. I agree also with the efforts to differentiate between the roles of the government, the cabinet ministers, and the representation on this committee. So I do agree with Judy's motion in that respect, because we want to keep this committee as independent from Parliament as possible, so it can continue to work independently of members of the government, the cabinet.

    I think there should be no offence taken by our parliamentary secretary, who's here. If anything, we're trying to help him by freeing up the already busy schedule I know he has. I think he can understand that. We do appreciate his input here, but that issue of independence, I think, is something that is very valid.

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    The Chair: Okay.

    Monsieur Pacetti.

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    Mr. Massimo Pacetti (Saint-Léonard—Saint-Michel, Lib.): I look at it from the other point of view. I like to see him here, because I think we get to influence the minister, who gets to see our point of view. I think the committee is strong enough. I think we're able to put our points across, and he's able to give our point of view to the minister. So I see it the other way around.

    I have a question for Ms. Wasylycia-Leis.

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    The Chair: Through the chair, presumably.

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    Mr. Massimo Pacetti: Which are the committees that have no parliamentary secretaries? Or did I not understand correctly?

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    The Chair: All the committees have, but I thought I heard you saying there are several committees that don't.

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    Ms. Judy Wasylycia-Leis: Several committees have reached a decision not to include the parliamentary secretaries. They are, I understand, agriculture and defence.

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    The Chair: Ms. Minna.

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    Hon. Maria Minna: I suppose the clerk will check that out, but quite apart from what's happened in other areas, it seems to me that this committee in the past has done some pretty aggressive work and not worried about being influenced by a parliamentary secretary.

    I don't see the parliamentary secretaries as an integral part of government. They are to a degree, but I've done the job and I know they can be just as independent, but they don't have to impose their views on anyone. What they can do is provide information that sometimes makes it a lot easier for the committee to function. They're privy to some information that may be helpful for us as we discuss issues. If we were to then eliminate the critics from the different parties, that goes back to the same thing. I know it's not part of the government, but it's part of a different structure. It's not an independent committee. The committee is here to discuss. Some of it is government bills, some of it a direction the committee may choose to take on its own. There are many members around the table, and he's one person. He's not a cabinet member; he's a member of Parliament who happens to also be a parliamentary secretary, but can function as a link to a lot of information this committee can use.

    If we're so afraid and so insecure about our ability to function as an independent committee that we have to oust somebody, I think it's a pretty sad day, quite frankly.

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    The Chair: Thank you, Ms. Minna.

    Ms. Leung.

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    Ms. Sophia Leung: Thank you, Mr. Chair.

    I think this committee has produced very good work, and quite independently, without the PS. I agree with my colleague's ideas. We need more information, a liaison between the department and us. I support Mr. McKay's staying if he prepares better questions.

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    The Chair: Thank you.

    Mr. Pillitteri.

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    Mr. Gary Pillitteri: Thank you very much, Mr. Chair.

    I've been on this committee since 1993; I think I'm the only member who's been here from day one. I recall only one parliamentary secretary trying to influence this committee, and he's sitting right there, Mr. Chair. I don't remember any other individual trying to influence the committee. The thing I have seen most of the time has been the parliamentary secretary as a reference for information on bills we're working on. We've sometimes had more than one parliamentary secretary at this committee, because we had Revenue, we had Finance. I don't think, Ms. Wasylycia-Leis, you are so insecure as to think that having one honourable here would have such an impact on this committee as to change the minds of the members.

º  -(1655)  

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    The Chair: Thank you, Mr. Pillitteri.

    Do you want to wrap up, Ms. Wasylycia-Leis?

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    Ms. Judy Wasylycia-Leis: I just want to say this has nothing to do with how I react or do not react in the presence of the parliamentary secretary. We're talking about a matter of principle and a way in which the committee system should be structured. It's not about here and now, it's not about Mr. McKay, and it's not about me; it's about what is the best way to structure committees to ensure that we have, as consistently as possible, asserted our independence and our unique role in the parliamentary system.

    It's comparing apples and oranges if we suggest that the parliamentary secretary is similar to the critics. The parliamentary secretary is appointed by the government to work with the cabinet minister, and now, with the new changes, I believe Mr. McKay actually does sit at the cabinet table or have some additional privileges in respect of cabinet responsibility that weren't there previously.

    So in light of that and the way in which the role of parliamentary secretaries is evolving, and in light of the way in which Parliament has talked about the need to revamp and strengthen our committees, I make the motion. I think our parliamentary system will eventually reflect it. Today maybe this committee is not ready to do this, but I think it is coming and it is something we will have to do eventually.

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    The Chair: I will put the question.

    (Motion negatived)

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    The Chair: Thank you very much for your interest.

    The meeting is adjourned.