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Bob Hamilton
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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.
Bob Hamilton
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Bob Hamilton
2019-06-11 12:17
Mr. Chair, I have just a couple points on that, because you'll recall that a few years ago the Auditor General did a study on our call centres and found us not to be providing the level of service that he was expecting and, frankly, that we would have liked. Since then, I would say, a couple of things have caused us to improve.
One is that we've put in more resources and we've increased training for our call centre agents to make sure we improve accuracy.
However, one of the big changes we've had is that we now have a new telephone platform. New technology has come in and has allowed us to do things differently from the way we did them before. For example, it used to be that if you called us, we didn't have the ability to tell you how long the wait was going to be, so we had a rule within the CRA that we were going to try to address your call within two minutes 80% of the time, and if we didn't feel as though we could do that, you got a busy signal and called back. Now what we're able to do with this new technology, which is obviously more modern, is to tell people up front, “Your expected wait time is five minutes” or 10 minutes or whatever it is, and then people can make a choice: “I'd like to hang on” or “No, I'll call back later.” Up front, people get that choice, and the rare, rare exception will get a busy signal. You'll always get that choice, and if you decide you don't want to wait, then you'll call back. We also have beefed up our self-service efforts, so people can, if they have a fairly simple question, actually deal with it without talking to an agent.
Bob Hamilton
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Bob Hamilton
2019-06-11 12:19
Wait times go up and down. As you can imagine, if you take the pulse at the end of April, when people are frantically calling, it will be longer. We're just in the process of figuring out with this new technology what an appropriate service standard is for us. For example, we'll want to make sure that within the average wait time we will serve most of the people within x minutes. We're trying to figure out what that is. We've had wait times of about 10 to 15 minutes on average over the period of the filing season. Again, we're still examining the data to see how much that varied and whether there's anything we can do to even it out. Obviously the pressure will come down as the year goes on, but we're just taking all of the new things we've done with the new technology to come up with what would be an appropriate service standard.
Bob Hamilton
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Bob Hamilton
2018-12-11 9:16
Yes, indeed, we did earlier this year appoint a chief service officer at the agency and it's a piece of a broader exercise we have to try to improve service at the CRA and to take an approach more centred on the Canadian taxpayer.
I think in the past we have found ourselves sometimes working in silos within the agency. One part is doing something that is not as connected as it should be to another part. We have to recognize that when we provide services to Canadians we're providing a range of services. It could be telephone calls, correspondence, the website, and we need to take an approach that looks at it from the taxpayers' perspective and that we're providing the services we need to. We did name a chief service officer in that regard, and her job is primarily to look at the way we provide service to Canadians, both digitally and by paper, but across the board, so that comprehensively we can say, yes, we're doing things that make sense for the taxpayer.
We're listening to the feedback that they get. We have different channels to get feedback, whether it's public opinion, research, complaints that come in. We make sure that we're listening to that, and then further make sure that we're taking that information and looking for ways to improve, whether it's how we respond to phone calls or the accessibility of our website. That is really what her job is going to be. If I think of it, it's integrating the activities of the agency so that we can better focus on how we can provide services to Canadians better.
Bob Hamilton
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Bob Hamilton
2018-12-11 9:18
Yes, I'm happy to talk about that.
Again, I think as we look at the services that we are providing in Canada.... One of the steps we have taken in that regard is in the north, where we're doing, I'd say, three things to try to improve services there.
The first is to provide more access to CRA employees. Putting somebody in an office up there in the north, to answer questions, is something that we are doing. Hopefully, it will help provide better information to taxpayers. What this is all about, and what you'll see in all of our service activities, is trying to better explain to Canadians what is required, what their tax obligations are and how we can make it easier to comply.
We think that providing offices in the north will help in that regard, and we will make CRA people available in those offices. We will be looking to expand the community volunteer program, which goes out to try to help people fill in their taxes. That's one key element.
The second is looking at the northern residents deduction, to see if, as you say, we can uncover any systemic reasons we might be verifying the same people over and over again. We're looking at the algorithms we use that decide how we test and review certain cases. We're also trying to make sure that we better explain earlier on and have good conversations about what the obligations are under the northern residents deduction.
That's a second place where we're trying to do a better job of communicating, explaining and even looking at our process to see if we can simplify it.
A final area was looking at a regulatory change on the low-cost airfare, just to make sure that we didn't have a system in place that was too hard for people to comply with, where you had to pick the lowest airfare on a particular day to be eligible for it under the program. We're looking at ways to simplify that and advance a regulatory change to that effect.
Those are the pieces that we think will help and hopefully reduce some of complaints we get in the north. It's part of a continuing effort to improve our services.
Bob Hamilton
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Bob Hamilton
2018-12-11 9:23
Mr. Chair, I think very definitely that the chief service officer will help with the kind of perception you have talked about, which I don't like to hear about, frankly. I don't want people being treated like criminals on phone calls, as a starting point. The conversations may evolve down the road depending on how things go—people have to face the consequences of their actions—but we are very much about changing the culture at CRA, as I've said, to being a service provided to the taxpayer and the client.
What I would like to see us do and what we are doing, and where the chief service officer will help, is focusing more on the conversations about educating both sides of the conversation. For us it's making sure that we're explaining to Canadians what they need to do and why. Sometimes, because we deal with so many people, those can be shortcut conversations. They can be abrupt. We're trying to make sure that they are not, that they are fulsome explanations for people. That takes time and resources, but we need to do that to fulfill our service commitments.
We are also going to be paying attention to the feedback we get—because we hear some of the same things that you hear—and make sure that we listen to it, as I've said, but also to try to factor in what we can do about it, how we can correct those issues.
It's not to say that there will never ever be an issue at the CRA, but we need to make sure that we're correcting as many of them as possible, and that as many people as possible feel like they are being treated fairly and respectfully by the CRA. I would want that to be the case in every single interaction that we have.
When we talk about service culture, though, it isn't just the people picking up the phone and talking to you. That's obviously an important element of service, but we are also trying to embed a service culture within the audit and enforcement activities. Yes, we will ultimately need to make sure that the proper amount of taxes are paid, but we need to go about it in a way that tries to educate first. Let's make sure that there's an understanding and work through it, and that way maybe get some long-term compliance. If people understand the obligations and we understand their situation, hopefully we can get on a path of long-term compliance.
Having said that, if there are still issues, we will have to enforce the law and make sure that the proper taxes are paid, because that too is important, for the perception of fairness by other Canadians.
I'm very confident that the chief service officer is going to help us refocus our efforts to provide better service to Canadians. Some of the changes have started, but I look forward to even more changes down the road.
Bob Hamilton
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Bob Hamilton
2017-11-30 9:28
I'm actually very proud of the people who work at the CRA. I spent my first year visiting most if not all of the call centres. I've sat beside some of the people answering the phones, and I've sat in the rooms where they're trying to direct the calls through the system we have.
Bob Hamilton
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Bob Hamilton
2017-11-30 9:28
I want to say that I am actually very proud of the people who work on our systems, and I think they're doing the best job they can with the technology they have. They've actually shown some innovation and a lot of integrity here.
We're going to give them the tools they want. On the reporting side, in the past we have focused our reporting on meeting the “80% within two minutes” objective. We are now broadening that out to, I think, provide a more comprehensive view of what's going on.
As I said earlier—
Bob Hamilton
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Bob Hamilton
2017-11-30 9:29
Right. We have focused on the 80% within two minutes. We are now going to provide more comprehensive reporting. In the departmental results report, we started to report on the more complete picture. Yes, there is that. If you get through, it's within two minutes, but we know that there are people who are not getting through. We want to report on that and we want to make progress on all of those fronts.
For example, that's one of the reasons why we experimented with increasing the wait time to see if we could change that, because it is a choice that has to be made in terms of how many people can come through and how quickly they can be served, until we get the new technology, which will allow us to provide wait times to people, and they can choose whether they'd like to wait.
Bob Hamilton
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Bob Hamilton
2017-11-30 9:30
In that regard, I think, we always do the best we can with the resources we have. We don't have infinite resources, so we always have to make choices about what we do.
I'm telling you now that we are going to be investing in this technology, but I don't want to give you the sense that it's just technology. That will be a big help to us, but we are taking steps before then. We need to look at our systems. We need to look at our training. All of those things will be ongoing pressures.
The other thing I haven't mentioned, which is interesting to note, is that service is a more comprehensive vehicle than just call centres, and we have to think about the information that we provide in general in the service area. How's our website? Can people go there and get the information they want, to the point where they don't need to call as often?
We're looking at all of the aspects of how we provide information to Canadians, but today we're talking about the call centres. Technology will be a big change for us, but we also, as I said, are looking at our training and our systems and making sure that we're giving our people all the tools they need.
Bob Hamilton
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Bob Hamilton
2017-11-30 9:32
I am not very surprised by the results.
We knew there were problems with access. We made the choice to have a wait time of less than two minutes, but that was necessary because clients were getting a busy signal. The result as to the veracity of the answers shows that there is certainly room for improvement, as well as the fact that our report is perhaps not as transparent as it should be.
There are things to be improved, but it is not a big surprise.
Bob Hamilton
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Bob Hamilton
2017-11-30 9:33
I will not comment on that 84%.
Overall, we have to improve the training for agents and make sure that the answers provided to taxpayers are accurate.
Also, we have to continually improve the agency's services.
Bob Hamilton
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Bob Hamilton
2017-11-30 9:35
Once again, that 84% pertains to a question in a survey.
I said we have to improve the situation. Overall, we have to provide accurate information to Canadians. We will take measures to improve through technology and training, and find out what exactly the problem is. We will be able to receive calls, better understand the source of the problems, and correct them. That is my commitment in this regard.
That is my answer.
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