Thank you very much, Mr. Chair.
Let me briefly, for the benefit of the committee, introduce the colleagues who are with me today.
There's Mr. Bill Baker, who has just recently been appointed the deputy commissioner and chief operating officer of the Canada Revenue Agency; Jim Ralston, who the committee knows is the chief financial officer of the agency; Stephen O'Connor, who is assistant commissioner for corporate strategy and business development; and Lysanne Gauvin, who is assistant commissioner for human resources for the agency. We've got other staff in the room to try to answer all the questions of the committee.
With your permission, I have a quick statement. Thank you for inviting us.
The report we've tabled, which I think you have in front of you--it has been distributed--was prepared by the CRA and was first tabled in the committee just a little over a year ago, so we're re-tabling it now.
Six years ago, Parliament launched a major experiment in public sector governance. New legislation created an agency with unique characteristics designed to merge the best of what public and private sector governance had to offer.
Parliament's reason for passing the Canada Customs and Revenue Agency Act in 1999 was to give the Agency the means to persue three key objectives: provide superior service to Canadians; work more efficiently and effectively internally; and develop closer partnerships with the provinces and territories.
What can now be observed is that the CRA has matured into a truly pan-Canadian organization, able to better serve all taxpayers by improving revenue collection and by eliminating unnecessary overlap between jurisdictions. It is also clear that five years is a short time to assess major changes in governance.
Overall, agency management recommended a year ago that members of Parliament take note of the progress outlined in the five-year report and consider allowing this experiment to be pursued and explored fully for at least another five years.
The key characteristics of the agency's governance regime are: a board of management, responsible for human resources, procurement, real estate, and the administration of the agency, and this board is composed, by law, of individuals from the private sector, the majority of whom are nominated by the provinces and territories; the Minister of National Revenue, responsible for program legislation administered by the agency, and with whom our government clients can work at the political level; a commissioner, or chief executive officer, responsible for ensuring day-to-day management of the agency, under the board's guidance; and a strengthened accountability regime arising from the fact that the agency is entrusted with taxpayer money on behalf of many governments in Canada.
Like all departments and agencies, CRA is required to prepare reports on plans and priorities as well as performance reports. However, it must submit two additional documents: a corporate business plan and an annual report. The board of management's input is reflected in our three-year corporate business plan, which details the agency's objectives and strategies to achieve them.
The reliability of CRA's performance is, uniquely, also subject to reviews by the Office of the Auditor General, named in the legislation as the agency's auditor.
To provide some context for committee members, I'd like to highlight a few statistics that describe the agency and its work. We have 43,300 employees. We collect over $305 billion annually on behalf of federal, provincial, territorial, and several first nations governments. We distribute nearly $12 billion worth of benefits and credit payments to more than 11 million eligible Canadians. Finally, we administer 190 programs for 126 clients. We are recognized as a world leader with respect to innovations such as electronic filing and government online.
There is still work to be done in many areas. The transformation ordered by Parliament six years ago is very far-reaching and very complex. It must be done while maintaining the integrity of the federal and provincial tax bases. In areas such as tax compliance, collection, staffing and recourse, real estate, or board of management governance, we're still at work bringing significant improvements.
The organizational changes and accountability mechanisms have enabled us to make significant achievements in regard to all of our priority objectives. As the report has demonstrated, Canadians are now receiving better, faster and higher quality tax and benefit administration.
In the first five years of our mandate from Parliament, we built a strong and mature organization that is a leader in the public service. Our success to date indicates that our model is sound and that we're capable of taking more responsibility from governments.
So on that, Mr. Chairman, I welcome the questions of the committee.
Thank you, Chair, and thank you, witnesses.
Mr. Dorais, the Library of Parliament estimates that something in the order of 15% of the economic activity in this country is actually underground, and therefore there are no tax revenues generated--according to their statistics, at least. I think the Auditor General estimated it's something in the order of a $12 billion loss in tax revenue. Those seem to be actually older statistics.
I wonder whether you have within your ability to tell us what you estimate the underground economy to be, what you estimate the tax loss from the underground economy to be. Has the shift from being a department to an agency made any difference in that particular issue?
Finally, with respect to the GST, the argument is that there is a correlation, that a consumption tax actually drives up an underground economy. It's anticipated, of course, that on July 1 the GST will come down; the consumption tax will come down. Have you any studies to possibly support the notion that the underground economy will become above ground by virtue of the reduction in the GST in particular?
I'll defer to some of my expert colleagues for the last part, about the consumption tax and its possible effect on the underground economy.
The question the member asks relating to the tax gap is an issue that has been discussed a long time in the agency: how much is not collected, and how much is hidden somewhere in there?
Years ago, purposely, the agency and previously the revenue department decided not to invest major money in trying to estimate the tax gap. The reason for that is very simple: you have almost as many theories as you have people who study this area. People figured that you could sink an enormous amount of money into it and come up with a number that just about anybody could challenge.
We know it exists, and I think we accept the fact that it is a major problem. Our strategies have always been to go sector by sector and take initiatives to get at various aspects of the underground economy. Some of the activities we've taken in the construction industry are an example of that. The minister has just asked us to review that very carefully in view of seeing if we can expand that to a broader concept of the underground economy in the larger sector. We're looking into that.
So I think we've developed a constant pressure on the underground economy, and we are making gains every year, but we have not conducted huge studies to determine what that amount could be. I think we can accept that the estimates that have been made--I can't remember exactly which ones they are--vary from about 4% to 15%.
Thank you, Mr. Chairman.
Congratulations on your appointment, Mr. Baker.
And welcome Ms. Gauvin, Mr. Dorais, Mr. O'Connor and Mr. Ralston.
Mr. Dorais, I'd like to ask you a few questions. A few years ago, the Auditor General, who was Mr. Desautels, I believe, revealed that, on December 24, 1991, an advance ruling had been made on the transfer of two family trusts to the United States, and subsequently perhaps elsewhere. We don't know, because we lost track of them. There were some senior officials from the Department of National Revenue, the Department of Finance, the Department of Justice and other departments. This decision authorized that family to transfer those trusts without requesting guarantees and without taxes being paid to Revenue Canada.
Eighteen months later, the Minister of Finance at the time introduced a bill providing that, every time advance rulings were made on asset transfers—either through family trusts or other vehicles—the party transferring those assets would have to post guarantees in advance to avoid being exempted from its tax obligations in Canada.
I subsequently questioned the Deputy Minister of National Revenue, before the Agency was created, and I was told that Revenue Canada was not equipped to monitor those investors who were transferring assets, that there were no specialists monitoring these people closely. If these people realized their assets in less than 10 years, they had to pay a certain amount to Revenue Canada. If they did it more than 10 years later, there was no problem.
So I ask you whether you now have any specialists who have enough resources to closely monitor these people who transfer assets outside Canada.
In 1996, the Department of Finance did announce certain measures to tighten the migration rules for individuals, including trusts, who emigrated from Canada, and these received royal assent in 2001 and were retroactive to 1996.
Essentially, under the new rules, people who leave Canada must calculate their taxes as if they had disposed of their property, other than certain taxable Canadian property, and they can either pay that tax immediately or else, as you noted, they can post security for that amount. Depending on whether they're an individual--a person--or a trust, there are certain forms they have to complete and certain information requirements they have to provide to the agency. And when they emigrate, they need to identify all the properties they hold.
We do have a system that tracks this information and tracks each of the properties they reported in the year of emigration. Anybody who chooses to defer payment of the tax owing is required to provide security before the due date of the return or to contact us to make an arrangement.
These accounts are in fact monitored on a yearly basis, and each and every year we issue letters to remind the taxpayers, after emigrating from Canada, that if they dispose of any properties, they should notify the Canada Revenue Agency of those transactions.
So that kind of monitoring and tracking system does in fact exist.
We appreciate your being here, gentlemen.
We know that being in the tax collection business does generate, shall we say, some less than desirable publicity at times. I do want to ask you about that, though.
As members of Parliament--at least I speak for myself, and I know other members of Parliament have told me the same--we do have constituents coming to us on a fairly regular basis very concerned about what you might call the culture of the agency on tax collection, in terms of reasonableness, in terms of effort expended for small amounts sometimes. I don't want to get into storytelling, but I think you know what I'm referring to.
Some of the stories I've heard have troubled me a great deal, and my question is as follows. If a taxpayer feels that they have been harassed, treated unfairly, have had their assets sold without proper authorization and then been unable to get the asset back once there's a ruling that it was improperly seized and sold--these kinds of things--is there an ombudsman? Is there a process where taxpayers can bring these issues forward and get some redress?
I know as members of Parliament we've been a little bit frustrated sometimes in trying to get a resolution for actions--and we know individuals don't always act as wisely as they could or should.
What's your corporate culture on dealing with these kinds of issues for ordinary Canadians who are up against the all-powerful department and really don't have the resources to seek redress when they feel they've been very unfairly treated?
Thank you all for being here. It's good to see you again. We've been through this a couple of times at public accounts.
I want to begin first by putting on the record that in 1996, the government announced that the three objectives for the new organization were to: “provide better service to Canadians”, “become a more efficient and effective organization...”, and to “establish a closer partnership with provinces and territories”.
Your department provided this report. In the introduction page of this, you say:
||The Report is designed to help parliamentarians understand the government’s objectives in putting the Agency in place, the general scheme of the Act, and its accomplishments over the past five years.
What I want to raise with you is the difference between what you say in this report and what the Auditor General has found.
And I know you're bringing her in separately, but some of these facts still pertain, Mr. Chair. I'm doing this for the sole purpose that this document, if it's meant to be a help to parliamentarians, should be a reflection of the reality within the agency and not just a spin document. That's the premise of why I'm asking these questions.
So to put some colour to that, on page 9 of your report it says that the act,
||...has been implemented in a responsible manner that fully observes both the intent and the letter of the legislation.
On page 237 of the Auditor General's most recent review, which is only a few months old, she said the agency,
||...approach to assessing files for risk continues to lack sophistication and has major weaknesses that impede the timely collection of tax debts. Further, the Agency still lacks information needed to manage its collection of the tax debt effectively.
Your document, on page 9, states:
||...the fundamental transformation of the Agency’s human resource and administrative regimes also served as the essential ingredient in enabling the Agency to meet the third of its objectives: improving service to Canadians.
On page 245, the Auditor General, says:
||We found that the Agency does not have a full understanding of the composition of the tax debt and why it is growing.
She further points out, on page 256:
|| The number of accounts that collection officers maintain in their inventories varies between 15 and 300.
Your document, on page 60, says:
|| Its risk-assessment processes enable it to target compliance activities towards areas of highest risk and to shift resources to these key areas.
The Auditor General, on page 252, where there are three bullet points, states:
||The automatic risk scoring of delinquent accounts was ineffective because the risk assessment was limited mainly to the outstanding balance and the age of the account; other important risk factors either were not considered or did not weigh heavily in the risk scoring.
||The risk scores were rarely updated or used to prioritize workload.
||There were no profiles of tax debtors for use in modifying basic collection strategies to improve recoveries from debtors who posed a high risk of non-payment.
I have more, but I don't have enough time.
I would also ask the clerk, while you're beginning your response, to circulate--
The document I want circulated, the clerk now has. I bring it to the attention of this committee because it merely points out that it was a unanimous motion at committee, so it included government members. And I quote:
||That the Canada Revenue Agency report to the Standing Committee on Public Accounts by September 30, 2006 on the status of the Agency's 2010 vision plan and that the Committee requests the Agency to provide a detailed action plan including performance indicators and a timetable for completing its 2010 vision and, provide the Committee with regular progress reports.
I would just say that it passed unanimously because the committee was not satisfied with the answers to the Auditor General's reports. And yet I have this document in front of me, which I've just quoted from, which to read it you'd swear that everything was just wonderful.
So either this is a spin document, and let's call it that, or it very much misses the mark as an operating tool for this committee.
I think I've backed up my concerns. I leave that with you. And please respond in any way you feel comfortable.
If I may comment on that, there are two things. First, I think, Mr. Chairman, that the member is confusing the Income Tax Act with the CRA Act. This report comments on the Canada Revenue Agency Act. So that's point number one.
Point number two is about audits. And I would encourage the committee to ask the Auditor General what she thinks of the agency and what she thinks the agency has achieved in its first five years of existence. With the internal audit and the audits from the Auditor General, I think we accumulate something in the order of 135,000 hours a year of audits within the agency. We live and breathe through audits. And to be honest with the committee, when an audit report finds nothing wrong, it's a big waste of money.
So we welcome the comments of the AG. She's helping us in building a stronger agency. We did not disagree with any of the recommendations in her last report, and in fact we're already gearing up to implement everything she has suggested. These kinds of reports are extremely helpful.
On the agency per se, the document you have in front of you, which we would like to hope is as factual as it can be, has been prepared by the agency. It hasn't been prepared by the Auditor General, but I would encourage the committee to ask questions of the AG on that report. She has commented numerous times on the agency and has essentially said that the agency has one of the best systems of reporting to Parliament and provides parliamentarians with the most accurate information.
Of course, not everything is perfect. You will hear from the unions about the recourse in the staffing process. You will hear from the AG, as the member has pointed out, about some of the audit. If everything was perfect, it would be a wonderful world, but the agency has made enormous progress. I think what we've been saying to the committee is that five years has yielded incredible results, and we believe, from a management perspective, that another five years will confirm that the model Parliament chose in 1999 has the potential of bringing amazing governance results in the public sector.
I just want to start with a bit of a comment, and you're welcome to comment on it, if you'd like.
There was an earlier question pertaining to the GST, the reduction of GST, and whether or not that would help to disrupt the underground economy or at least encourage people to be a bit more honest.
I just want to suggest that economics would point to lower taxes leading people to be more honest with tax reporting. The Laffer curve demonstrates, as a matter of fact, that a lower tax rate does lead to people being a bit more forthright in their taxes, since there's not as much to gain by lying or conducting an underground economy.
I do have, as kind of an offshoot from that, a question pertaining more to GST refund overpayment. I find it kind of concerning that currently there's no process in place to estimate where we're at with GST overpayment. In fact, the very fact that it even exists disturbs me. It's essentially theft, when you're claiming more money back than you're deserving of.
Have you made any progress in estimating overpayment, if there's any, and what kinds of repercussions there might be for people who are claiming GST refund overpayment?
Your time is up, Mr. Del Mastro.
While you're preparing that data, I want to remind you of your commitment earlier to provide data to the committee on the number and nature of disciplinary actions that occurred. I didn't put that on the record.
Also, could you provide a bit of a summary sheet? It's my understanding that interest on taxes owing is calculated differently from interest on refunds to taxpayers. Also, the interest payment obligation begins sooner for the taxpayer who owes money to Canada than it does for Canada when owing money to the taxpayer. I would like you to outline that in your summary sheet for the committee's application as well, if you would.
We'll continue with Mr. Boshcoff. You have five minutes, sir.
I'd like to comment, Mr. Chair.
One of the things the agency is taking a hard look at, as we do what all modern organizations have to do, which is look at the right critical mass necessary to deliver a service.... We have the good fortune of having such a terrific, competent, distributed workforce across the country, including places as small as Thunder Bay. So we're looking at what we can deliver, using the talent where it resides, because you're absolutely right, we do know that there are situations where even in a smaller office, it may not only be a lower-cost place to do business, but you might have a workforce that is more experienced because they tend to stay attached to the organization longer.
I want to add one other thing, Mr. Chair.
From a career perspective, I don't think there is a federal agency that comes close to Revenue in offering the opportunity of starting at the ground level...you can go from a clerk and work your way to the most senior assistant commissioner level without having to come to Ottawa. I don't think there are too many organizations that offer this kind of career opportunity to employees.
Mr. Boshcoff, thank you for your questions.
I'll ask Mr. Dorais something.
Some of our subsequent witnesses will, of course, as you're aware, be raising issues of concern to you and to your agency, and I'd like to invite you back on behalf of the committee—perhaps next week at some point—if you would be open to that, because I know the committee members will likely have other questions for you as a consequence of other testimony we'll be hearing. Would this be something that would be possible?
Actually, we created the agency in that period of time. That was a major investment.
If you look at our volume of growth, for example, we sustained a growth of about.... If you look at the report on page 64, you see in figure 10 the graph that shows the growth from 1999 to 2004. The agency did not receive a single penny from the government budget process to allow for the growth in revenue. All this was funded through reallocations coming out of efficiency measures.
We certainly did concentrate a huge amount of money in there. We made major investments in fundamental systems that we needed to put in place; the GST redesign that we started a number of years ago required major investment, year after year.
The issue is always the same. We've been quite open about that. We always have choices when it comes down to allocating the money. We did improve dramatically--and I think the Auditor General mentioned it--on the accounts receivable. We were growing and growing every year, and we've now matched the intake. We're at the stage of having stabilized the thing. The board of management has been following that very closely.
So we've made some progress on that front. Have we got the right system to have a really top-notch collection? No, we haven't got that yet.
Oh, I see. Is it working now? Yes.
A lot of people wonder why they're being audited, and so on. Can you tell us a little about the criteria that are used to decide who gets audited and who is left alone?
Do you have statistics on the incidence of audits by income group? There's perhaps a misconception that it's the little guy who always gets audited, and the tax department doesn't worry about the big guys.
My second question is in regard to penalties. How do you decide what the rate of interest will be on a late payment? In regard to GST remittances that companies have to make quarterly, I'm told that if you're late in your remittance, not only do you get charged interest, but you get slapped with a penalty. I don't know if this is true. How are these things determined? How do you know it's the best optimal penalty or interest rate?
Thirdly, is changing the tax form in response to a sudden proliferation of tax credits a costly and cumbersome process?
Our largest audit coverage is with large corporations. Of the large corporations we audit, virtually all of their tax returns are filed on a biannual basis, so every second year we'll audit two years' worth of corporate tax returns. We do this taking into account the complexity of the transactions large corporations enter into, because of the dollar amount involved, because of the frequent legislative changes that affect large corporations. It's an area we've identified as high risk, and one we look at very closely.
In doing so, we bring a team of tax avoidance and international specialists to bear on it in order to identify the kinds of triggers that would require further action. Whether it's a transfer pricing type of issue or a particular arrangement or scheme we might find offensive, we bring folks to bear on it.
The large number of small and medium-sized enterprises is where risk assessment and risk management is critical for us. We risk assess and risk score each and every one of the some 24 million individual returns that are filed, each of the two million business returns that are filed, and all five million to six million GST returns that are filed. Over the years we've developed a series of indicators—I don't think I have the exact number, but it's in the ballpark of about 200 different indicators—that are in the computer system to assist us in risk scoring a particular return to try to identify particular risk factors.
To take a relatively simple example, if you live in a certain neighbourhood that is well beyond the income you report, that will be one trigger that will show up. If you have a certain business where your gross operating profit or margins are significantly different from what is the norm for that particular industry, that is another risk factor that will show up.
There are other reasons we'll do an audit. We might do a follow-up audit on a previous audit we've done, just to ensure that in fact there is compliance. We have a leads and assistance program, so sometimes we receive leads from external sources. We will look into those where it's warranted. We have a core audit program as well, and we have a small number of people—around 50 or so—who do a series of random audits. We do that just to benchmark our risk assessment systems in order to ensure that they are as effective as possible.
So there are many reasons why we would carry out an audit, but generally speaking it's all risk-based.
How sweet is that? All right, thank you, Chair.
We try not to be petty, but we are—at least I can be.
Some hon. members: Oh, oh!
Mr. David Christopherson: Coming back to a couple of things, I do have a question. On page 37, you say the CRA continues to maintain good working relationships with the unions. On page 53, you also talk about “expanding and improving both the range of service offerings available to Canadians and the variety of channels through which these services are available”, and yet on both fronts you have major problems. You've closed the cash counter—you no longer allow Canadians to pay with Canadian currency anything they may owe—and yet you brag about expanding and improving service while you've just cut service to Canadians. That has triggered a campaign from the union, and I'm sure I'm not the only one receiving these cards from the union—your union—who are extremely upset about the diminishing of services to Canadians. Maybe you can explain the discrepancy for me.
There are two things there. The first thing is the relationship with the union. I'd like to think we have an excellent relationship with both unions of employees, and I encourage the committee to ask them the question. We've been working very hard on all sides to develop that relationship, and I have the utmost respect for the work the unions are doing.
That said, they had us change our mind on the payment counters. The original decision was the abolition of all payment counters. The unions came, and we had long discussions and changed that decision, allowing payments in all our offices, except the cash payments, which require a particular infrastructure to accept and are more difficult to handle.
On the counters, we agreed to disagree; the unions obviously do not share the rationale for the decision. We happen to believe that with the opening of the Service Canada offices—300 offices across the country where general information would be available—with the availability of online services, and with the possibility for people to make an appointment, overall after everything is in place taxpayers will get a better service in the end.
The creation of the agency brought into what was the revenue department individuals from the private sector who imposed their judgment on the various elements of the management of the agency. That has yielded an extreme rigour within the agency. Because I came from another department into the agency, I can tell you from experience that as a result, the nature of the issues around the management table are very different.
As to what we've been able concretely to accomplish, I think the report shows a number of elements of success. We've been able to grow steadily, since 1999 up until now, and all of this has been financed through efficiency measures. Ahead of everyone in the government, we developed the consolidated procurement systems to save an enormous amount of money, and we can provide the committee with the actual savings that have taken place. We've integrated our IT system four years before the rest of the government is thinking about implementing it. We've tested and successfully achieved it.
I'd like to believe that the creation of the agency introduced the rigour of a corporate structure into the public sector environment, while keeping the political accountability.... Frankly, it is a challenge to all of us to make that work and see if we can demonstrate to Parliament and others that this slightly different model of managing a highly operational part of government can work and give good results.
I think the word—I'm not sure if I said it, and if I said it, I should not have said it—is to “compensate”. There is a differential. We collect penalties and we collect interest, and a certain amount of excess revenue comes to the federal government, but you're absolutely right, we pay the province what we assess.
Now, in an agreement like the ones we've signed with some provinces, there's a public interest at stake, and there's a cost assumed by the federal government for that public interest. For business in that particular province, harmonization of tax collection creates an enormous relief in terms of bureaucracy, and they have to see a single auditor, a single taxable revenue. So an element is assumed by the federal government in the interest of the country, in the functioning of the country. I didn't say they would “compensate”, but it's certainly an added revenue.
Do you want to add to it?
Mr. Chair, I don't think I will take my five minutes, but I do have a general question.
This is the first time I've had a chance to listen to all you folks present and speak with respect to the agency and its existence for the last five years.
Some of the priorities that you have outlined and indicated in both your report and in your responses today and some of the facts or some of the issues outlined in the auditor's report aren't necessarily similar. I take what you said about needing to prioritize in terms of the direction you're going in, albeit those issues are as important as one is to the next.
There is only one question I would have. As an organization, if you had three priorities that you were going to be focused on for the next 12 months and you came back here and were asked about them, what would those three priorities be?
I think it would be focusing on our core capacities. I think the agency is always at risk. Because we are good at certain things, we're always at risk of spreading ourselves in all kinds of directions. We are good at collection and benefits administration in large volume or for the benefit of government clients. That's our core business, and I think we really need to keep our eyes on the ball. That would be priority number one.
Priority number two is maximizing the use of the particular governance model we have. I would venture to say that we have not, over the first five years, taken as full advantage of the private sector and applied this to our organization as we could have. This is why we came with the recommendation that we need some more time to really make that work to a peak.
The board of management has evolved tremendously over the last year, and it has had input more and more into the management of the agency, and we're starting to see some results.
The last element is to look at maximizing the use of the capacity we have throughout the country. We can grow the business in areas that we're already in; we can solicit new business. We have additional capacities in some places we can use to deliver programs on behalf of governments across the country, so we're looking at ways to maximize that. Those would be my three priorities.
: Merci, monsieur le président.
I want to ask you about the issue of clawbacks for the purposes of calculation of seniors' income. If I'm a senior receiving OAS and I receive a dividend of $100, the clawback, I believe, is treated at $125. I think that's correct. If I receive $100 cash, it's treated as $100 cash income, but for purposes of a dividend it's the gross-up amount of $125. I'm given to understand that in the budget of 2006, that $100 is now going to be treated as $145 for the purposes of clawback.
The first question I have of you is on dividends. Why, for clawback purposes, is a $100 dividend treated as anything other than $100? Second, for the purposes of this budget, is it true that the clawback provisions have increased effectively from $125 to $145?
I'll try to speak and will be corrected by my people.
We pride ourselves on being at the forefront of technology. Effectively, our technology branch is strong, about 3,600 people, which makes it the biggest one, I think, in the federal government.
Although the fiscal year is not over--it will be three days from now--I think we will reach 53% for e-filing. Last year, it was very close to 50%, and it was 47% two years ago. So it's increasing a lot.
Now, there are some economies through e-filing, but they average about $2 per return. It's not huge, but the level of service has changed. We have a standard of service of 15 days for e-filing, for reimbursement, and we're meeting a standard of 12 days right now. So those who file electronically receive their reimbursement within 12 days in most cases, which is amazing.
Through “My Account”—and these are new services that have come out—you can change your address, you can appeal a decision, you can look at the last six years of your account, I think it is, and you have all the information. You can calculate a certain number of things directly from “My Account”. So the level of service has increased dramatically as a result.
: Merci, monsieur le président.
I'm going to take off my critic's hat--I am the critic for revenue. I don't normally get these opportunities. I would like to go back to the whole notion of the model, simply because if it does work--if it's a new direction for us and it works--then by all means, it may be something we want to look at in terms of replicating in other areas.
Again, there is no grilling here; I'm really just asking. Could you come back? I didn't really get the answer I was looking for earlier. I appreciate what you said, and I'm sure it's important from a management perspective, but I didn't get a sense of the structural building blocks in going down this road. How does it provide better service? In other words, what are the things that are working so well that maybe we ought to think about transferring them to, or applying them in, other areas of government?
No. Very often the chair and the minister will meet and they will exchange. Their official powers are in the act; the minister can give directives to the board and the board can give a recommendation to the minister. These powers have never been used in the five years.
What the board is looking to is whether it's well managed or not. Like a private corporation, they have an audit committee for all the management. The minister gives us program direction; the board has no access to taxpayer files and has no access to programs. The minister has this access. The minister gives us the political direction we need, and the board gives us the management direction, just as a private corporation board would. I'm accountable to both, and my performance is assessed by both.
That model works well in areas in which there is very little policy content--we do no policy--and a very high operational content, which we do. Especially since the border points have left the agency, we are no longer involved in preserving the territory of Canada or defending the border. We are strictly involved in financial transactions with taxpayers, trusts and corporations, and businesses. We handle money. We collect it and we give money to beneficiaries, so it's very highly operational, with a low policy content, and it has yielded some results.
I wanted to mention something that hasn't been mentioned: the authorities given to the Revenue Agency for human resources management. This place starts and ends with people. The authorities we now have allow us considerable latitude in the way we classify, in the way we structure ourselves, and in the way we treat employees.
To give you one example, in the Canada Revenue Agency we created a group called the management group, which regroups anyone who's in a supervisory role, by and large; we work with that group. They have a separate classification--unionized, but a separate classification--and we've created a process by which you can get alignment for the strategic direction and identification of a management community.
I point this out because it's something we've done at the CRA that has been under close observation by the rest of the public service, as have a number of other HR practices. I just spent three and a half years outside the CRA, and believe me, many places would covet the opportunity to do what we've been able to do with our authorities. I think it's reflected in our employee satisfaction in public service surveys. It's very encouraging.
In terms of tax shelters, there's a requirement under the Income Tax Act for all tax shelters to be registered with the agency. That's done in order for us to be aware of the existence of a tax shelter. There are quite severe penalties if they're not registered. So we need to be aware of tax shelters. And ever since I think about 1994, when there was a joint announcement by the Ministers of Revenue and Finance, we've given very close scrutiny to tax shelters. We will review them to ensure that they do in fact comply with the legislation as it's written.
What happens is that we will assess people's income tax returns as they file them. But we still have a period of three years in which we can actually reassess that return. Some of the tax shelters, of course, are very complicated in the way they're structured, and it can take us some time to review that tax shelter and to determine whether or not it is compliant with the legislation.
So it does happen sometimes that there is a time gap between when that determination is made and when we will go back and reassess the individual investors who are participating in that particular tax shelter. Sometimes you do have that kind of a time delay.
In terms of legislative changes, those, of course, are the purview of the Department of Finance, and we're not privy as to when they do or don't make those.
Thank you, Ms. Ratansi.
Before thanking you, Mr. Dorais, I'd like to make a request and a comment. The request is an administrative one. For your appearance next week, would it be possible to send the documents related to that appearance to the clerk as soon as possible?
In addition, on behalf of my colleagues, I'd like to thank the staff of the Canada Revenue Agency who answered the requests from MPs' offices concerning the points at issue. These people are formidably efficient, in addition to being pleasant. Our caucus has mentioned that on a number of occasions. Every time we submit difficult cases to them, we are pleasantly surprised at their response. I don't know whether that feeling is shared by the other parties, but whatever the case may be, I'd like you to transmit our congratulations to them.