Committee
Consult the user guide
For assistance, please contact us
Consult the user guide
For assistance, please contact us
Add search criteria
Results: 1 - 15 of 1956
Maxime Guénette
View Maxime Guénette Profile
Maxime Guénette
2019-07-15 14:56
Thank you, Mr. Chair.
Good afternoon to all committee members.
My name is Maxime Guénette. I'm assistant commissioner of the public affairs branch and chief privacy officer at the Canada Revenue Agency. With me today is my colleague Gillian Pranke, deputy assistant commissioner of the assessment, benefit and service branch at the CRA.
The CRA is an organization that touches the lives of virtually all Canadians. We're one of the largest holders of personal information at the Government of Canada. We process more than 28 million individual income tax returns annually. It's therefore critical that the CRA has an extensive privacy framework in place to manage and protect personal information for all Canadians.
Integrity in the workplace is the cornerstone of agency culture. The agency supports its people in doing the right thing by providing clear guidelines and tools to ensure privacy, security and the protection of personal information, our programs and our data.
The agency is subject to the Privacy Act and associated Treasury Board policies and directives for the management and protection of Canadians' personal information. Section 241 of the Income Tax Act also imposes confidentiality requirements on its employees and others with access to taxpayer information.
The agency also adheres to the policy on government security and direction provided by lead security agencies like the Communications Security Establishment and the Canadian Centre for Cyber Security.
In April 2013, the agency appointed its first chief privacy officer, who is also responsible for the access to information and privacy functions within the agency.
Part of my role as the chief privacy officer is to ensure that the CRA's respect for the privacy of the information it holds is reinforced and strengthened by overseeing decisions related to privacy, including assessing the privacy impacts of our programs; championing privacy rights within the agency, including managing internal privacy breaches when they occur; and reporting to CRA senior management on the state of privacy management at the agency.
Our responsibility for sound privacy management goes beyond appointing a chief privacy officer, though. It's a responsibility that all employees share.
Protecting the CRA's integrity includes ensuring that we have the proper systems in place to safeguard sensitive information from external threats. Agency networks and workstations are equipped with malware and virus detection and removal software, which are updated daily and protect the CRA environment from the increasing threat of malicious code and viruses.
At the agency employee level, computers are secured with a suite of security products ranging from anti-virus software to host intrusion software.
External services are conducted on secure platforms and protected by firewalls and intrusion prevention tools to detect and prevent unauthorized access to agency systems.
During online transactions we ensure that all sensitive information is encrypted when it is transmitted between a taxpayer's computer and our Web servers. Regardless of how Canadians choose to interact with the agency, they must complete a two-step authentication process before gaining access to their account.
These steps are crucial to making sure that access to personal information is only available to authorized individuals. The process includes validation of a number of personal and confidential data points, including a person's social insurance number, their month and year of birth, and information from the previous year's income tax return.
The CRA will shortly also be implementing a new personal identification number for taxpayers who choose to use it when calling the individual inquiries line. In addition, the CRA is currently examining additional security procedures to safeguard the information of taxpayers. As cybercrime and phishing scams become more sophisticated and commonplace, the CRA is being proactive in warning the public about fraudulent communications claiming to be from the CRA.
One very simple way in which taxpayers can safeguard against fraudulent activity is to sign up for My Account, or for businesses to sign up for My Business Account, so that they can use the CRA's secure portals to access and manage their tax affairs easily and securely. When an individual is signed up for My Account, they can also sign up for online mail in order to receive account alerts informing them of possible scams or other fraudulent activity that may affect them.
CRA is proud of its reputation as a leading-edge organization committed to excellence in administering Canada's tax system. However, inappropriate fraudulent activity can occur in the workplace. CRA has incorporated a broad array of checks and balances to ensure that those who access taxpayer information are strictly limited to employees required to do so as part of their job and to detect misconduct when it does occur.
Monitoring of employees' access to taxpayer information is centralized, ensuring an independent process that enables the agency to detect and, if necessary, address any suspect transactions in our systems. This provides assurance that authorized users are accessing only the applications and data they are allowed to access based on strict business rules.
In 2017 the CRA implemented a new enterprise fraud management solution, which complements existing security controls and further reduces the risk of unauthorized access and privacy breaches. This solution enables proactive monitoring and detection of unauthorized access by CRA employees. Any allegations or suspicions of employee misconduct are taken very seriously and are thoroughly investigated. When wrongdoing or misconduct is founded, appropriate measures are taken, up to and including termination of employment. If criminal activity is suspected, the matter is referred to the proper authorities.
Upon hire, agency employees are required to read and acknowledge the agency's code of integrity and professional conduct and the values and ethics code for the public sector.
The code clearly outlines the expected standard of conduct, including the obligation to protect taxpayer information in accordance with section 241 of the Income Tax Act. Unauthorized access to taxpayer information is considered to be serious misconduct, as reflected in the agency's directive on discipline.
The code ensures that current and former employees are aware that the obligation to protect taxpayer information continues even after they leave the CRA. All employees are asked to review and affirm their obligations under the CRA's code of integrity every year.
In the event a privacy breach does occur, it is assessed in accordance with TBS policy and procedures to document and evaluate all potential risks to the affected individual. In such a case, the CRA offers support to the affected individual through a dedicated agency representative so that the client has the opportunity to ask questions and find information as well as, on a case-by-case basis, get access to free credit protection services.
On the rare occasion when a taxpayer's information is confirmed to have been compromised, the CRA will act to resolve all outstanding issues. This includes reviewing all fraudulent activity that may have occurred in the account, including fraudulent refund payments.
We at the agency are deeply committed to safeguarding the trust Canadians place in our organization, and to meeting their expectations that we have the right checks and balances in place to secure the information entrusted to us. We have worked hard to earn the public's trust, because it is the foundation of our self-assessment tax system.
A good reputation takes years to establish. We safeguard it by remaining vigilant in our efforts to protect taxpayers from security breaches and to protect Canada's tax administration system from misconduct and criminal wrongdoing.
Thank you, Mr. Chairman. I'd be pleased to answer any questions you may have.
View Linda Lapointe Profile
Lib. (QC)
Thank you.
I have used half of my time and so I am now going to turn to you, Mr. Guénette.
You talked earlier about the external rules on preventing identity theft, but you have not spoken a lot about the internal rules. I would like to know about the internal rules in the Canada Revenue Agency. After all, we are here today because data was stolen from the inside.
How do things work at the Canada Revenue Agency? Do the employees have to be at certain levels in order to have access to the systems? You talked about centralizing or detecting problems by intervening if necessary. You said that there are strict rules and I would like you to tell me a little more about them. Can people work with their own electronic equipment when they are in front of Canada Revenue Agency screens? I would like to know more about that.
Maxime Guénette
View Maxime Guénette Profile
Maxime Guénette
2019-07-15 15:31
Thank you for your question.
Of course, we have security rules at several levels. First, we screen the staff that we hire. People with more specific access have “Secret” security clearance instead of a lower level of clearance. A whole host of physical security measures are in place. People working in call centres, who have access to screens showing taxpayer information, may not have their personal phones with them. We have measures in that regard.
As for access to taxpayers' data, those data are on separate servers that are not connected to the Internet. There is a mechanism by which the employees' access to the data is reviewed annually, or each time they change jobs. Managers verify the access those employees have on a regular basis.
As for the workload, in my introductory remarks, I talked about the administrative rules. When we give employees their workload, our business fraud management system checks by using algorithms in real time. The system applies several dozen rules. For example, if employees check their own tax accounts, an alert is automatically issued and the system sees it immediately. If employees work on tasks that they have not been assigned, the system will immediately send an alert to the manager, who would then be able to ask an employee what he or she was doing in the system. Screen shots are captured per minute, which allows us to see which pages employees are consulting or which changes they have made. The system was implemented in 2017 and it is very advanced. It allows us to have controls in place.
In terms of preventing data breaches, employees are unable to copy information onto CDs, DVDs or USB keys. The system does not allow it.
View Francesco Sorbara Profile
Lib. (ON)
Thank you, Mr. Chair.
I do want to start very quickly by acknowledging the passing of MP Mark Warawa. Mark and I were on the same floor in the Valour Building, and I had the chance to get to know him quite well from a number of conversations. I do wish to pass on my sincerest condolences to his family. I know that the Lord has inherited quite the angel in the last 24 hours. My condolences on Mark's passing.
Going to the topic at hand, the CRA has published a set of reports. The fifth one came out this week: “Tax Gap and Compliance Results for the Federal Corporate Income Tax System”.
If I could just read out the preamble in the executive summary, I think it speaks to the measures our government undertook to ensure the integrity of our tax system. It states:
In April 2016, the Government of Canada committed to estimating the federal tax gap to encourage an open and transparent discussion on tax non-compliance. Understanding how and why taxpayers are non-compliant is critical to help preserve the integrity of the tax system and to protect Canada's revenue base, which supports programs and benefits delivered to Canadians.
I think that little preamble, that first sentence of this last report, is very important to folks back home in my riding and across Canada to assure them that the federal government is providing CRA with all the resources it needs to do its job for integrity.
I have a quick question. We heard some numbers: the before tax gap numbers, the broad ones, but then the audited ones. In your view, how important were the resources we invested in the CRA to pursue those proper audits and reduce that tax gap to be as minimal as possible?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2019-06-20 11:38
I won't comment on the level or the appropriateness.... I'll let the CRA officials determine whether they have sufficient resources to pursue all the audits they should be pursuing.
It's certainly the case that audits are a very important way of addressing the tax gap and narrowing it to the extent possible, because audits, first of all, uncover tax evasion. Also, and I think equally important, they provide a disincentive to engage in the behaviour in the first place. If there's a relatively high likelihood of getting caught, it's a disincentive to engaging in the behaviour in the first place.
View Francesco Sorbara Profile
Lib. (ON)
Exactly, and if I can interject, page 9 of the CRA report shows a tax gap before audit of $9.4 to $11.4 billion for SMEs and large corporations. The “Impact of Audit” brought it down by literally three-quarters. You're still at $3.3 billion to $5.3 billion, but it gives you an indication of the magnitude when audits are performed correctly.
I'm going to pivot, because there is something in the PBO report at the end, on page 20, where you say:
CRA efforts to increase audits on the information reported on T106 forms could reduce the magnitude of aggressive tax planning. However, it may be time for a “fundamental rethink” on international corporate taxation to ensure income is taxed where the economic activity is taking place.
Now, we do know that we've entered into a base erosion and profit shifting agreement, another multilateral instrument. Our government, in the last three years, invested a billion dollars plus into CRA, with more audit teams, in responses to KPMG and other activities that have been taking place.
Could you comment on this last paragraph on page 20, before the appendix? This is your concluding statement.
Mark Mahabir
View Mark Mahabir Profile
Mark Mahabir
2019-06-20 11:40
Basically what we're saying here is that the T106 forms are not a reliable source of information for data analysis. A lot of the forms are incomplete, and we had to get the CRA to clean the data for us before our analysis.
As well, there are certain outliers on the forms. There are certain corporations with a lot of transactions reported on the forms in comparison to other corporations.
The last sentence basically says that the level of transactions is not commensurate to the level of economic activity in Canada and in those jurisdictions where those transactions occur.
View Wayne Easter Profile
Lib. (PE)
Let's call the meeting to order. We're a little late.
Pursuant to Standing Order 108(2), we are studying the main estimates for 2019-20: votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 under the Canada Revenue Agency. With us from the Canada Revenue Agency we have Mr. Bob Hamilton, commissioner; Janique Caron, chief financial officer and assistant commissioner; Mr. Gallivan, assistant commissioner, international, large business and investigations branch; and Mr. Hewlett, director general, legislative policy directorate.
Welcome to all. We'll go through the opening statement and then go to questions. We have about an hour, I gather.
Welcome.
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2019-06-11 11:24
Thank you, Mr. Chair.
Good morning.
Thank you for the opportunity to present the Canada Revenue Agency's 2019-20 main estimates to the committee, and to answer any questions you may have on the associated funding.
My understanding is that you have a copy of my full remarks. In the interest of time, I will just hit some of the highlights as I go through.
As you are aware, the CRA is responsible for the administration of federal and certain provincial and territorial programs, as well as the delivery of a number of benefit payment programs. Last year the agency collected approximately $526 billion of tax revenue on behalf of federal, provincial and territorial governments, and distributed over $33 billion of benefit payments to millions of Canadians. The CRA also offers help and information to those who need it, and is working hard to reach Canadians who might not be receiving the tax credits or benefits to which they are entitled.
In order to fulfill its mandate in 2019-20, the CRA is seeking a total of $4.5 billion through these main estimates. Of this amount, $3.5 billion requires approval by Parliament, whereas the remaining $1 billion represents the forecast statutory authorities that are already approved under separate legislation. The statutory items include the children's special allowance payments, employee benefit costs and, pursuant to section 60 of the CRA Act, the spending of revenues received for activities administered on behalf of the provinces and other government departments.
These 2019-20 main estimates represent a net increase of $297.7 million when compared with 2018-19 main estimates. Of this change, $236.8 million is associated with previous funding announcements, with the balance of $60.9 million related to proposed budget 2019 measures. The largest component of this change is an increase of $110 million for measures to crack down and combat tax evasion and tax avoidance, at $61 million; enhance tax collections, at $22 million; and improve client services, at $27 million. This represents the amount of incremental funding received in 2019-20 as a result of measures announced in budgets 2016, 2017 and 2018.
To give you a sense of the kind of programs supported by this funding, allow me to touch on some specific initiatives.
Increased reporting requirements for trusts, which will seek information on beneficial ownership, will help authorities to effectively counter aggressive tax avoidance, tax evasion, money laundering and other criminal activities.
We are addressing commitments to service excellence in three key areas. The first is improving telephone services, including reducing wait times for callers and improving the accuracy of responses provided by call centre agents. The second is enhancing the community volunteer income tax program, where community organizations host tax preparation clinics and arrange for volunteers to prepare, free of charge, income tax and benefit returns for individuals with modest or low income. The third is strengthening digital services by updating and modernizing the agency's information technology infrastructure to deliver a more user-friendly experience, allowing Canadians to easily find the tax and benefit information they need.
Other items contributing to the year-over-year change include adjustments for collective bargaining increases of $64.8 million and the implementation of the federal fuel charge of $56.4 million.
The CRA's 2019-20 main estimates also reflect about $60 million in proposed incremental resources for the announcements made by the Minister of Finance in the March 2019 budget. The largest component, at nearly half, is a proposed increase of $29.3 million to improve general tax compliance. These funds will be used to hire auditors, build technical expertise and improve the agency's compliance IT infrastructure.
A further $9.5 million is proposed to take action to enhance tax compliance specifically in the real estate sector. The proposed funding will be used to create four new dedicated residential and commercial real estate audit teams in high-risk regions, notably in British Columbia and Ontario, to ensure that tax provisions regarding real estate are being followed.
Other examples of items relating to budget 2019 include about $9 million proposed to stabilize Phoenix-related activities by the CRA in our role as administrator of the tax system;
$8.5 million proposed to support the agency's ongoing service improvement efforts;
and $3.5 million proposed to improve access to the Canada workers benefit throughout the year.
In closing, the resources being requested through these estimates will allow the CRA to continue to deliver on its mandate to Canadians by making it easier for the vast majority of taxpayers who want to pay their taxes, and more difficult for the small minority who do not, and by ensuring that Canadians have ready access to the information they need about taxes or benefits.
Mr. Chair, at this time my colleagues and I would be pleased to respond to any questions you may have. Thank you.
View Francesco Sorbara Profile
Lib. (ON)
Thank you, Chair.
Welcome, everyone. It's great to have you here. It is such an important topic for Canadians from coast to coast to coast to ensure that all Canadian and high-net-worth individuals and organizations are paying their fair share in taxes. That can only happen when the CRA has the tools and resources available to do so and ensure compliance.
One thing I do wish to ask about is the auditing of real estate transactions in the provinces of British Columbia and Ontario specifically. Looking at the estimates, how important is the increased funding for those CRA tax teams to ensure that with real estate transactions, individuals are paying their share of appropriate taxes?
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2019-06-11 11:31
I'd lead off with part of an answer, and then I'll turn it over to my colleague Ted Gallivan, who is in charge of our compliance efforts.
Certainly, it is very important to us to have the resources required to be able to audit effectively high-risk areas. We in the CRA are putting a lot of effort into trying to make sure we have a good risk-based program that identifies the risks that are involved and that targets our resources most effectively to the areas that most need it. In the real estate sector, clearly we saw risks of activity that needed to be looked at. We certainly will be using the additional money we have to provide for additional auditors, and additional tools for those auditors, to be able to uncover areas where there may not be the compliance we want, and then to take actions on that.
I'll maybe let Ted elaborate a little bit on some of that.
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2019-06-11 11:32
Just quickly, we recently updated statistics showing that at an operational or tactical level, we have increasing results, with more billings; we're into house flips; we're confirming residency status; and we're looking down the contracting pyramid at suppliers to make sure they're registered and paying the taxes that are due.
At a more strategic level, I think the additional funding will let us push deeper into developers—kind of the larger fish in that sector—to make sure they're getting adequate coverage and also to have a strategic shift in behaviour. In some ways, these increasing audit yields would indicate that people's behaviours haven't changed yet. By increasing the level of attention and focus, we would hope to actually see changes in behaviour.
View Francesco Sorbara Profile
Lib. (ON)
Okay.
My next question is in regard to estimates. We've done the base erosion and profit shifting, and that's one element of tax compliance globally with multilateral instruments.
We've also invested a billion dollars or more into the CRA, but we also understand that the complexity of tax audits, both domestically and internationally, is increasing. Does CRA, at this juncture, have the resources and tools to undertake those necessary tax audits, and to not go after the mom-and-pop store, but rather where you need to yield results and where tax evasion or tax avoidance could occur and you would see significant injury?
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2019-06-11 11:34
Mr. Chair, I would say a couple of things about that comment and question.
The first is that it's absolutely true that the complexity of what we have to deal with is growing. There's complexity in the Income Tax Act, but there's complexity in the business structures that are out there too. That could be both domestically and certainly as you get into multinationals operating in an international sphere. We have to make sure that we have the people and the tools to enable us to deal with that complexity.
I think that at the moment we do. One could always do more with more, but if I look at ourselves and compare us to other jurisdictions around the world, I think we have a good level of resources to try to uncover what's happening in those complex structures.
It is true that when we have to audit or review one of these complex multinational structures, they are complicated, and they do take time. We have to make sure that we exercise due diligence. We focus our resources on the places where the greatest risk is, and I think we're doing a good job of that.
The only other thing I would mention, because you've talked about it, is that there's a really important international component to this, and that is making sure that we're co-operating with other tax jurisdictions in this battle. That can come through things like information exchanges and making sure that where we have a multinational, we are exchanging information on activities in different jurisdictions to enable us to get a better picture of what's going on. We look to try to co-operate with other jurisdictions.
Sometimes there can be tension there, because one jurisdiction's tax revenue is not able to be realized by another jurisdiction, but we're seeing more activity at that international level through the OECD and other structures, where we are focusing our administrative activities on getting the right information, having the proper discussions with jurisdictions and multinational firms and, as Ted mentioned, not only uncovering tax revenue in cases we're looking at, but sending a signal to firms and businesses out there that we are actively investigating this area. Hopefully, it will be a deterrent to using these kinds of offshore structures in the future.
View Pierre Poilievre Profile
CPC (ON)
I'm quoting from the Toronto Star of November 5, 2017:
Liberal fundraisers held family millions in offshore trusts, leaked documents reveal.
A massive new leak of offshore financial records contains more than 5,000 documents that reveal how two generations of Liberal fundraisers amassed $60 million...in a tax haven beyond the reach of tax collectors.
Internal email correspondence and financial records in the Kolber trusts appear to show evidence of bogus records to hide payments, false invoicing and six-figure gifts to avoid paying tax, raising red flags for experts consulted by the Star and CBC/Radio-Canada.
From the article, I now quote Denis Meunier, a former director general of compliance at CRA: “This definitely merits an audit by the Canada Revenue Agency.”
Has there been any such audit, yes or no?
Results: 1 - 15 of 1956 | Page: 1 of 131

1
2
3
4
5
6
7
8
9
10
>
>|
Export As: XML CSV RSS

For more data options, please see Open Data