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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 Peter Fragiskatos Profile
Lib. (ON)
Thank you very much.
I also want to ask, if I may, as a last question here, about improving telephone services. You mentioned that in your opening statement. In particular, you talked about lowering wait times. How is the CRA doing that? Can you also be specific in your answer on what the current average wait times are, as well as goals for the future to improve that average?
Bob Hamilton
View Bob Hamilton Profile
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.
View Peter Fragiskatos Profile
Lib. (ON)
Do you have an average wait time, Mr. Hamilton, at the present time? Can CRA cite an average wait time for callers or not?
Bob Hamilton
View Bob Hamilton Profile
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.
Clayton Achen
View Clayton Achen Profile
Clayton Achen
2019-05-14 11:05
Thank you, Mr. Chair.
Thank you very much for allowing my voice to be heard in this committee. I am truly honoured and humbled to be here with you all today.
My name is Clayton Achen. I'm a founding partner at Achen Henderson CPAs in Calgary. Given my practice area, my primary interest with respect to Bill C-97 is tax—specifically the taxation of private companies and small businesses and their owners. I'm primarily interested in what's missing from Bill C-97.
My firm's day-to-day work as a chartered professional accounting firm is to work directly with middle-class small business families. This has given us better perspective than most to see how hard it is for entrepreneurs to earn a living. We also see how easy it has become for our government to take those hard-earned dollars away, sometimes under the guise of fairness, which is a clever word that does nothing to consider the risks and ultimate hardships that an entrepreneur endures.
I'll spend a few minutes talking about some of their more recent challenges, including economic challenges, increases to tax, increased compliance burdens and uncertainty, and challenges in dealing with the CRA and navigating our tax system. I'll then make some brief comments on Canada's desperate need for a modern tax system and close with my thoughts on a few business-related items that are contained in Bill C-97.
It cannot be understated how complicated our tax system has become in the last 50 years, which was the last time that a comprehensive review was undertaken. Our last three budgets have heaped more and more layers of complication and burdens of compliance onto Canadian small businesses. While I am grateful that the attack on private corporations and their shareholders appears to have subsided in 2019, I am disappointed that the bill contains nearly nothing to help them.
What we've seen, particularly in my home province of Alberta, is that entrepreneurs have faced tremendous adversity in the last five years and particularly in the last three and a half.
In Alberta, some small businesses have managed to survive a long and sustained economic downturn with very little help from our governments. A lot have simply closed their doors and are out of work.
For all Canadian small businesses, the cost of compliance has increased dramatically as a result of changes to the inter-corporate dividend rules, tax on split income, the specified corporate income and association rules, changes to family trust reporting and new penalties for saving too much in your business regardless of the reason.
Many wealthier clients have increased their risk tolerance with regard to tax planning strategies and reduced their tolerance for economic risks. Many wealthier clients are shifting their wealth out of Canada.
Most of this is a direct side effect of the offensive and ill-conceived attempt at tax reform for private corporations and their shareholders that was announced on July 18, 2017. Moreover, all companies, including small businesses, are now shouldering significant CPP increases for the next seven years.
According to research conducted by the CFIB, Canadian small businesses are now being asked to shoulder nearly half of the federal carbon tax take, which increases the cost of everything—and I mean everything—while receiving disproportionately small rebates.
In many cases, small businesses have tried to pass these costs on to consumers in order to remain viable. In many cases, they simply can't. This results in corporate inequity, meaning smaller companies are simply unable to compete with larger corporations and multinationals who are better positioned or better equipped to shoulder these additional tax and compliance burdens.
I share these insights with you today not to complain, but rather to highlight that there have been real, rapid and sustained challenges for middle-class small businesses owners across Canada and Bill C-97 offers very little in the way of assistance or stimulus.
The next issue is the CRA's service levels. I can confirm the substance of the 2017 Auditor General's report, which says it is very difficult to reach the CRA by phone and even more difficult to get a complete and correct answer. We still deal with this daily. At Achen Henderson, we have been forced to add this to our service levels and have elected to do so at no additional cost to our clients.
While I'm thankful for my newfound love of chamber music and encouraged that the government recognizes the problem, we must ask ourselves if the measures in Bill C-97 are the correct approach. While advances have been made by the CRA to be more accessible and user-friendly online, it confuses us that the CRA requires five times the staff per capita to administer our tax system than the IRS does, with more hiring announced in the 2019 federal budget.
Based on our extensive experience in dealing with the CRA and helping many organizations who have experienced similar challenges, we've come to believe that the CRA's issues are cultural in nature. Defective cultures always result in operational bottlenecks. These bottlenecks are magnified by a tax system that is far too complicated for the average CRA agent or taxpayer to navigate, which is further magnified by a lack of or inadequate professional training, in our opinion.
Next, instead of taking steps toward modernizing our tax system to make it more transparent, competitive and easy to comply with and administer, Bill C-97 is a continuation by our government of using taxation to pick winners with tax breaks in various economic areas and industries. Furthermore, C-97 does nearly nothing to address tax competitiveness with the United States. Instead, the bill stretches the fabric of our tax act even further, mending holes where the fabric breaks with more patches, resulting in legislation that is impossible to comply with and administer.
lt's not all bad. There are some welcome patches in the bill, such as the improvements to the RDSP rules and the specified corporate income rules, but I can't help but wonder how many more holes will need to be patched until we consider modernizing our tax system.
The patch to the SR and ED program is a step in the right direction. lt undoubtedly makes the program more accessible to certain CCPCs. For them, this should help to tip the balance between compliance costs versus benefits and increased support. Unfortunately, these changes do not address the administration issues in the SR and ED program, and they only impact a very small portion of private companies in Canada.
While the accelerated investment incentive will be helpful to some private companies—namely those who are doing well and/or those who are able to expand or upgrade—the full expensing of M and P equipment, clean energy equipment and electric vehicles seems like boutique benefits that will only help certain private companies. We are disappointed that the accelerated CCA measures are temporary in nature.
ln closing, entrepreneurs have endured a lot these last few years. Many continue to struggle with uncertainty and excessive tax complexity, and have received very little from their government in return. While C-97 doesn't ask them to shoulder much more, it doesn't offer much in the way of assistance or stimulus.
We've seen improvements in the CRA's online offerings, but we have experienced very little improvement in hold times or service levels, and we question if Bill C-97's approach to resolving these problems is the correct one. Bill C-97 is a missed opportunity to initiate a comprehensive review of our tax system with the goals of modernization and simplification at its core.
Lastly, the accelerated CCA measures in C-97 are targeted at specific industries and temporary in nature, and we think they miss the mark on tax competitiveness with the United States.
Thank you very much for inviting me to speak today. I'd be happy to take your questions.
View Blake Richards Profile
CPC (AB)
Thank you. Unfortunately, I hear those types of examples all too often. Those are the types of things that we obviously need to be looking at to try to address with regulatory compliance.
Mr. Achen, regarding the CRA, you raised an issue that is also one I hear so frequently. You mentioned, and I actually hadn't heard this statistic before, that we have five times the number of agents per capita in the CRA than does the IRS. I've heard that expressed in different ways before, about the thousands and thousands of agents that we have at CRA, yet when you make a phone call, you can never get any one of them on the phone. People always wonder how the heck it is possible, with all those people there, that you can't even get someone on the phone. Then they say, if you ever do get someone on the phone, you might talk to four different agents and get six or eight different opinions, so that's obviously a source of frustration.
I wonder if you might speak to the opportunity that's lost for our businesses, particularly our small businesses, when they're dealing with these types of compliance burdens with the CRA. Obviously the complicated nature of the tax code and the fact that even the CRA agents can't really give you a proper interpretation of it, what do those effects mean for our small businesses in terms of lost opportunity to be able to be competitive and to be able to grow their businesses, mentor employees and so on?
Clayton Achen
View Clayton Achen Profile
Clayton Achen
2019-05-14 11:52
In terms of one of the biggest challenges, of course, we live in a self-assessment system where you're expected to file your own taxes and the tax of your corporation. You're responsible for those. A common source, particularly for middle-class small business owners who can't afford a fancy accountant, is to turn to the CRA for answers, and unfortunately, we get the wrong answers a lot.
Coming back to the impact that has on them, that results in improper tax filing, probably, in some cases, diminished revenues to the government, and a very high level of frustration when the CRA figures out that they've filed something wrong, and particularly in the area of GST/HST we see this quite a lot.
In a lot of cases, for people who can't afford tax accountants, the real costs are a sense of frustration, followed by a sense of a lack of trust in the tax system, followed by CRA reassessments because they got something wrong when they tried their best to comply with it.
View Francesco Sorbara Profile
Lib. (ON)
Madam Minister, we are at nearly the end of the calendar year, which for taxpayers is the end of their fiscal year. What message would you like to send the taxpayers now that they will be filing their income taxes in a few months? I think we have done a number of things to simplify the system, to make it more efficient. Filers can file online. We've obviously reduced taxes for nine million Canadians. Perhaps you can comment on the resources that we put in place to allow filers to file by telephone, in some instances, and to simplify the system for all Canadians.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his question.
I'm determined to improve the agency's services to meet the needs of all Canadians. The purpose of everything the agency has put in place in the past three years is to make the client our central concern.
We've introduced a new service, File My Return, an automated telephone service accessible to more than 950,000 taxpayers who have straightforward tax situations. We've clarified and simplified the use of our My Account service and also launched the CRA BizApp application.
We've reinstated the Disability Advisory Committee.
We've launched two series of Serving You Better consultations with small and medium-sized enterprises to determine with them how the agency can further simplify the way it works with them.
We've improved the objection process.
In February 2019, we'll be opening service centres for northern communities in the territorial capitals. What people in the north are experiencing is important to us. Their situation is very different from that of people in the south
We've completed installation of the new call centre platform, and it will be functional very soon. Business information requests directed to call centres migrated in November, and the service line for benefit information requests migrated on December 3.
We've also appointed the chief service and data officer, who will ensure the clientele is treated equally in the Canada Revenue Agency's various areas of activity.
We have simplified the agency's letters and forms. Last year we mailed tax packages to Canadians who chose to file their returns on paper, and we will do the same thing this year.
As I mentioned, the agency is still working to put the client at the centre of its actions.
View Michael McLeod Profile
Lib. (NT)
Thank you, Mr. Chairman, and thank you to the presenters today.
I have to first of all say how much I appreciate the improved relationship we've had in the north in the last couple of years and the improved communications. I think it's really starting to show in the number of complaints that I've been receiving over the years. The minister stated quite clearly that the process has to be fair and equitable across the country. I think there's a lot of work to be done, and a lot of work has been done. It's my understanding that CRA has recently appointed a chief service officer. How is this appointment going to help in improving fairness at the CRA?
Bob Hamilton
View Bob Hamilton Profile
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.
View Michael McLeod Profile
Lib. (NT)
The previous government shut down the only office that existed in the north for CRA. I know when I first got elected, there were a number of complaints coming forward. I think it was a real challenge for many people to try to get the attention of the CRA through the process that was in place. I'm happy to see that there's been some progress in the communications and maybe we could talk about that. I really believe that services have to be equivalent right across this country, and that includes the north. There's been some progress.
Can you talk about some of these things? We've had issues with the northern residency deduction. We've had triggers that were calling for audits and some people have been audited over and over again, but things seems to be moving forward. Can you talk about what you're doing in the north?
Bob Hamilton
View Bob Hamilton Profile
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.
View Wayne Easter Profile
Lib. (PE)
Thank you, both.
Before I go to Mr. Richards, I did have a question in this area of the chief service officer. At our constituency offices—and I assume most members' constituency offices are in the same situation—we'll get where we're the last stop, and we'll get calls from constituents in tears trying to deal with CRA.
There's no front office service anymore. It used to be fine when people went in and were able to sit down with somebody—in my case, in the Charlottetown office—to talk it through and see what they could do. Maybe their bank account's been frozen, and whether for right or for wrong, there is a feeling among many constituents when they're talking to a CRA representative on the phone, after they get through the queue—sometimes they have to wait a long time—that they're treated like a criminal.
There has to be a different attitude in that regard, because then we get the calls and we try to deal with it through our contacts.
I will say that for MPs, most of the time in the contact we have with CRA, they do their best to help us out, and through that, help the constituent. I just want to put that on the table, that there is a problem for constituents in what they feel the attitude of the CRA individual is toward them. They feel like they've been treated like a criminal. It may have been an innocent mistake on their side or it may not, but their bank account may have been frozen or whatever.
I'm just telling you, that is a problem we have to deal with, Commissioner Hamilton. Will the chief service officer help in that regard? Is there any thought of bringing back front-line services at CRA offices?
Bob Hamilton
View Bob Hamilton Profile
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.
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-30 8:48
Thank you.
Mr. Chair, thank you for this opportunity to discuss our fall 2017 report on Canada Revenue Agency's call centres. Joining me at the table is Martin Dompierre, the principal who was responsible for the audit.
Every year, taxpayers have questions about their taxes. The agency's telephone call centres are an important way for members of the public to obtain tax information, especially for those who do not have Internet access, those who are uncomfortable using computers, and those who cannot find answers on the agency's website.
Our audit looked at whether the Canada Revenue Agency's call centres provided Canadians with timely access to accurate information. We focused on calls received on three of the call centre's telephone lines—one for individuals, one for businesses, and one about benefit payments. We also examined the agency's methods of assessing and reporting on its call centres' performance.
Overall, we found that the agency did not provide timely access to accurate information.
We found that the agency blocked 29 million calls, which was more than half the calls it received. The agency monitored how long callers waited to speak with an agent. When the average wait time approached two minutes, the agency either blocked calls, usually by giving them a busy signal, or directed them to the automated self-service system.
The agency told us that callers would prefer a busy signal or an automated message to waiting more than two minutes to speak with an agent. However, the agency had not surveyed callers to verify this assumption. As a result, callers had to make an average of three or four call attempts in a week, and even after several attempts, some callers still didn't reach an agent.
Through our tests, we found that the rate of agent errors was significantly higher than what the agency estimated. Call centre agents gave us inaccurate information almost 30% of the time. This is similar to the test results of other assessors and significantly higher than the error rate estimated by the Canada Revenue Agency.
We found that the agency’s quality control system didn't test the accuracy of agents’ responses effectively or independently, so the results of its tests were unreliable. For example, in most cases, agents knew that their calls were being monitored, which may have encouraged them to change their behaviours to improve their performance.
Finally, the agency reported that about 90% of callers were able to reach either the self-service system or call centre agent. However, we found that percentage didn't account for the calls it blocked, which were more than half its total call volume.
Only 36% of all calls made to the agency's call centres reached either an agent or a self-serve system and lasted a minute or more. Furthermore, by blocking calls or redirecting them to the self-service function, the agency was able to report that it achieved its two-minute service standard for agent wait times.
We are pleased to report that the Canada Revenue Agency has agreed with all of our recommendations and has committed to taking corrective action.
Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the committee may have.
Thank you.
View Chandra Arya Profile
Lib. (ON)
View Chandra Arya Profile
2017-11-30 9:28
In your response, you say that you're proud of the work that your employees carry out every day. Who are those managers who gave you the internal report stating that 90% of the callers were able to reach you? That is a totally inaccurate report. Are you still proud of those managers who are responsible for that?
Bob Hamilton
View Bob Hamilton Profile
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
View Bob Hamilton Profile
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
View Bob Hamilton Profile
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.
View Chandra Arya Profile
Lib. (ON)
View Chandra Arya Profile
2017-11-30 9:30
Were the resources a constraint for you at any time in order to improve the technology and deliver better service to taxpayers?
Bob Hamilton
View Bob Hamilton Profile
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
View Bob Hamilton Profile
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.
View Gérard Deltell Profile
CPC (QC)
Mr. Hamilton, your service failed to deliver 84% of the time. It failed 84% of the time.
You say you are not surprised, but what did you do not to be surprised? How can it be that you are not surprised that your service did not work 84% of the time?
That is unacceptable, sir.
Bob Hamilton
View Bob Hamilton Profile
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.
View Gérard Deltell Profile
CPC (QC)
Okay, we can all improve in life, we get that.
Yet with an 84% failure rate, you do not need to improve; you need to shake things up or else we have to start over from scratch. Come on, it is not a question of improving. You need a change in course and a kick in the backside to get things working properly.
Mr. Hamilton, if you wanted to hire someone and they got 16% on their test, would you hire them?
View Gérard Deltell Profile
CPC (QC)
Mr. Hamilton, do you realize that what you just said is an insult to the 84% of people who call and do not get the service to which they are entitled and which they pay for?
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2017-11-30 9:35
That is why we have an action plan to improve the situation.
View Gérard Deltell Profile
CPC (QC)
Mr. Hamilton, what I find very disappointing is the way you are talking about this as though it were a question of making a few improvements. We are talking about an 84% failure rate. What is needed here is not an improvement: you need to completely review the structure and, above all, the culture.
How have you been able to keep your job with an 84% failure rate?
Bob Hamilton
View Bob Hamilton Profile
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.
View Gérard Deltell Profile
CPC (QC)
That is your answer but it is unacceptable to Canadians.
What was done was more than a survey: it was demonstrated beyond any reasonable doubt that things are not working. You say that the technology has to be improved. That is not true. The role of technology is to support effectiveness; it is not the source of the problems. In the current culture, you are not worried about this. When you say that it is just a survey question and all that is needed is improvement, it is as though you are burying your head in the sand. I am sorry to have to be so harsh, Mr. Hamilton, but your answers are not acceptable.
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2017-11-30 9:37
I have fully understood the questions and the problems and have committed to improving the situation through the action plan. It is clear that technology will improve our situation and will allow us to direct the questions to people who can answer fairly complex questions. Further, we now offer better training to these people and provide them with better tools.
I have taken the recommendations very seriously. We will make changes at the agency in order to offer better service to Canadians.
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2017-11-30 9:57
I would just say that more information can be better, typically, and if we could typically report.... We answered calls within two minutes 80% of the time. That doesn't say anything about how many people didn't get through, so I would call that inadequate information. It's not misleading. It's not inaccurate, but it doesn't tell a part of the story that would be of interest to Canadians.
View David Christopherson Profile
NDP (ON)
It is inaccurate to say your error rate is 6%, and it's actually 30%. You don't think that's misleading? You don't think that's inaccurate?
View Gérard Deltell Profile
CPC (QC)
Thank you, Mr. Chair.
In your introduction earlier, you said something that was right on the mark. In fact, I am convinced that the 337 other members of the House of Commons share your opinion.
We have received a lot of calls from Canadians who were outraged by this. These people are not millionaires or people who hire an accountant to fill out their tax return. They are ordinary citizens with a modest income. In most cases, they are seniors. Eight times out of ten, or 84% of the time, these people were not able to talk to an agent or, even worse, got incorrect information.
Did these people pay too much tax or not enough? That is the question, and it is obviously the first one that comes to mind for them.
Did they pay too much tax as a result of the incorrect information they were given?
Mr. Hamilton, what recourse do these people have?
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2017-11-30 10:09
The taxpayer relief provisions are important, but I think providing accurate information to people is even more important.
So it is by ensuring that the information is accurate and appropriate that we can improve. I think the agency has shown integrity over the years and that people have to trust it. To my mind, we have to ensure that we are providing the best information possible to Canadians. Since this is a very important responsibility for the agency, we will make improvements in this regard.
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2017-11-30 10:11
Mr. Chair, it's an interesting question. I'm pleased to say that the morale in this area is high.
I'll just refer to the example last year on the appeals audit, which, again, was difficult for us because it pointed to a number of shortcomings in our appeals process in terms of timeliness. We weren't giving information in a way that tax payers expected. When I talked to the appeals people afterwards, they were actually somewhat energized. To go back, people there understand some of the problems in the system. When we have a motivated action plan to correct it, they get energized by it.
I did ask the question. I sent out the message, as indicated, to tell people about the report, the importance for us, and the importance of improving. I asked the representatives from the call centres how people are feeling. They said that they actually feel good. They're feeling that this is an opportunity for us to really improve, to make sure that we're giving them the right tools. We have the technology on the horizon, but there will be an importance, a priority, attached to this by virtue of what I'm doing and by virtue of what Frank and Gillian are doing. People are seizing that opportunity.
We have to deliver on that. I know that will be an issue for the committee and the Auditor General. Are we going to commit to improving the way that we've laid out in our action plan? I believe that we will. Our employees will be expecting that and putting our feet to the fire.
For the moment I can say, yes, they're feeling motivated to make improvements to the system.
View Alexandra Mendès Profile
Lib. (QC)
Thank you very much, Mr. Chair. Thank you all for being here.
I'm going to follow up on my colleagues' points, Mr. Christopherson's and Mr. Deltell's, about the fact that taxpayers are citizens. Taxpayers expect a government that provides services to them that are accurate and timely.
When someone calls one of the call centres to ask for tax information and is given an erroneous answer, that will most automatically cause someone, in good faith, to submit an erroneous return. He or she is going to make a return that is mistaken because of the information he or she received. Mr. Deltell asked what recourse they have. Almost automatically the agency actually does the calculations and eventually will give us a proper amount. However, when we owe money to the agency, we're charged interest. When the agency owes money to us, not one red cent is paid in interest. For some people this is a big issue. It's a lot of money. They did it in good faith. They actually produced their returns in good faith.
Why are we continuing to provide bad information to people? If somebody doesn't know the answer, they should tell the citizen that they don't know the answer. Refer them to somebody who can answer them. But giving erroneous information is extremely harmful. I really can't understand how for years—this is not recent, this is not one time, this has been going on for awhile—we can continue to sustain a service that is providing erroneous information to citizens.
Bob Hamilton
View Bob Hamilton Profile
Bob Hamilton
2017-11-30 10:22
I think, Mr. Chair, this goes back to my earlier point. One can construct different measures of how one is doing. Again, the 80% in two minutes is one measure. What I prefer, and my commitment, is to make sure we're presenting the total picture. We can talk.... I'll let Frank speak a little bit about the potential, I think, of 87% or 90%, which could be caller acceptance—
View Alexander Nuttall Profile
CPC (ON)
There is only one perspective that matters here. That is the perspective of the people we're serving. Those are the people who are calling in. Those are the callers. From the callers' perspective, it's a 36% rate. From your department's perspective, it's a 90% rate. That is a huge variance. That actually is the best example of the culture issues that are so obviously existing. I don't think there's a member around this table right now who is thinking, “Yeah, we don't really have culture issues; we need a little bit more transparency and maybe we need to train some people better and get some better technology, and CRA is off to the races”.
I don't think that is a thing. That's the message I'm hearing, and I don't think that's a thing that exists around this table. I think you need to go back. I want to know who came up with the system to say that over half the callers aren't actually callers. I want to know who came out with these results, because they just don't make sense.
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-23 9:44
I'll answer, and I'll ask Mr. Dompierre to correct me if I go wrong on this.
If a person does not make their payment by the time it's due, then the CRA, in all likelihood, is going to charge them interest.
Then, I guess, if the person wants to take that up with the CRA, they will have to navigate the system again to get back in contact with CRA and try to say, “Well, wait a minute. You told me I had to pay it on this date, and I paid it on this date, and now you're charging me interest.” They would have to navigate that system all over again—one they perhaps had some frustration navigating in the first place—just to be able to get the original question answered. How that will end up being resolved, I don't know. It wasn't the point of the question, but it would put the individual back to having to try to take up their issue again with CRA.
View Alexander Nuttall Profile
CPC (ON)
I know this wasn't necessarily the direct focus of the report, but have we seen circumstances when incorrect information was given out by the federal government and the federal government then changed the amount they're saying is owed, based on the information they gave out originally, or did we just not get there?
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-23 9:46
No, we couldn't get there because, again, we weren't asking taxpayer-specific questions. To get to that type of detail, we would have had to go through a taxpayer file. We just asked the questions in a general sense.
View Kevin Sorenson Profile
CPC (AB)
Thank you, Mr. Nuttall. You have 10 seconds, but I'll take it.
Did you ever ask CRA, when you were given false information, if you could have that answer in writing? I've been told by constituents—and it's probably happened to us—that when you're on the phone after finally getting through, after being blocked so many times, when you get the information, all you have is really your word against somebody else's, because it's on the phone.
Would you ever ask if you could have that answer in an email or in writing?
Martin Dompierre
View Martin Dompierre Profile
Martin Dompierre
2017-11-23 9:47
Mr. Chair, we did not make that sort of specific request. We were trying to keep the exchange anonymous as we were getting a right or wrong answer. If it was right, we were saying thank you; if not, we were cutting off the conversation at that point—
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-23 9:47
Of course, as you can see, we documented all the answers we got as part of our audit procedures. We didn't go that step—as you say, that would have been a little odd—but we documented all the answers we received.
View Alexander Nuttall Profile
CPC (ON)
Thank you, Mr. Chair.
I wanted to continue with the CRA audit. After determining a 30% inaccuracy rate in the information provided by persons working for the CRA, your report goes into the information that's provided by CRA in their auditing of their own activities, whether it's inaccuracy—their 6% rate versus your 30%—or the number of calls, because they don't include the blocked calls or calls that don't reach somebody in that process.
You recommend training. You recommend better services in tracking what's going on at the CRA. What do you recommend as a follow-up time period? To go from a 30% inaccuracy rate, what would be a good timeline for us to look at this and to ask for more information on changes that hopefully won't be needed?
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-23 10:11
They need to resolve this very quickly. I would suggest pushing for short time frames. A 30% error rate on people coming forward with tax questions certainly is not appropriate.
They need to get their own internal quality assurance measurement. They need to get that to the point where it is accurate, so that they can track the error rate and they don't have to wait for us or somebody else to do it.
They've been doing that, but again, the process they use is not independent. For example, they will make anonymous calls to the agents as well, and ask questions similar to the ones we asked. The agents say that when they get that call, their call display shows that the call is coming from a test line, so they know this call is monitoring their performance. Again, a right answer is to say you don't know and you have to pass it on. If you know you're being monitored, you might be more likely to say you don't know and you're going to pass it on, or there might be other ways that the behaviour is being affected.
They need to have a better way of making sure they get an accurate picture of the error rate. They need to get additional training in place; then they need to be able to demonstrate very quickly that this error rate is starting to go in the right direction.
View Alexander Nuttall Profile
CPC (ON)
Where is the issue? In your opinion, is this a top-down issue at this point? Is this strictly a training issue, whether it's on the quality assurance side or the people who are facing the client?
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-23 10:13
I see three parts to the issue. There are the people answering the questions, and they need to have the ability to answer the questions. Again, in the audit we pointed out that in some cases they have to go to a number of different screens themselves to try to find the answer. The people need the tools and training to be able to answer the question.
The department is saying they need better technology to be able to respond to more calls, so they can explain that and explain to what extent that is part of the issue.
I think the other part is that they need to look at the front end as well. They need to look at their website. In their own survey, about 40% of the people who called on the individual lines, individuals looking for answers to their tax questions, said essentially that they couldn't find the answer to their tax question on the website. That was why they were calling. I think part of what they need to do is to be able to provide better, more easily accessible information on their website. That would help reduce the calls, and it would add more consistency to the responses as well.
View Alexander Nuttall Profile
CPC (ON)
With all that said, if your business is taxation and somebody asks you when the interest is going to be charged on taxes owing, this is basically almost as easy a question as you can get. It amazes me that we need a screen to do that. How is it that we don't have training in place to show these people? This is basic.
If somebody called me when I was a banker and asked, “Alex, when does the interest start accruing?”, I knew the answer to that every single time—and it's different on every single deal—because I just know my business. How do our employees not know their business when it comes to everybody in the country having the same answer?
Michael Ferguson
View Michael Ferguson Profile
Michael Ferguson
2017-11-23 10:16
Again, I think that's part of what is particularly concerning with our results. We were not asking very complex tax questions for which people had to get into a lot of detail in the Tax Act or anything. We were asking pretty general questions for which you would expect a high rate of right answers. I can't go any further, other than to say that we were obviously very concerned about the results that we were getting in these tests.
Jeannie Baldwin
View Jeannie Baldwin Profile
Jeannie Baldwin
2016-02-18 12:22
Thank you for the opportunity to appear before the committee.
The Public Service Alliance of Canada represents 180,000 members. Most of them are employed with the federal public service and its agencies.
The previous Conservative government cut billions of dollars a year from public services. Our members know how these cuts have affected services. In a moment I will talk about how some of these have affected the Atlantic region and the country.
During the last election, the Liberal Party campaigned on an anti-austerity theme that Canadians clearly supported. We encourage the government to follow this approach. This is not the time to further weaken the economy by subjecting the federal public sector to further austerity measures.
As a large employer and a key provider of social infrastructure, the government should lead by example by investing in public services and the workers who provide them. The Liberal election platform promised to improve the quality of public services, including reducing wait times and increasing access to in-person service. The only way this can be achieved is by reinvesting in the federal public service to ensure that staffing levels meet Canadian needs.
Don't be distracted by claims of greater efficiencies and better service simply through improving technology. Inspecting food or aircraft, processing EI and pension claims, helping small businesses understand their tax obligations, protecting our fish stocks, or maintaining our national parks, to name just a few services, these require people.
We are pleased that the government is following through on the commitment to reopen the Veterans Affairs offices that have been closed, several of them in Atlantic Canada. But this is just a start to repairing the damage.
Parks Canada's Cape Breton Highlands Links was privatized. This is a historic site. Residents of the community were expropriated from their lands in order for this park to be created. In return, they were promised good-paying jobs. Parks Canada issued an RFP and placed Highlands Links, a world-famous golf course, into private hands. Privatization of the park will end up costing taxpayers millions of dollars more than if the facilities had remained in public hands.
Three years ago, the Conservative government closed a number of search and rescue stations, in spite of the warnings from communities on both coasts. Again, we acknowledge the government's commitment to reopen the Kitsilano coast guard station on the west coast and St. John's marine rescue sub-centre in Newfoundland. The big question is whether there will be the necessary staff to ensure proper coverage. We believe our union should be among the stakeholders who provide the advice on how these facilities can best respond to the communities' needs, as our members are among the experts who deliver these services.
As a last example, I have to mention the workers who provide benefits, such as employment insurance, Canada pension plan, and old age security. These workers provide a lifeline to the most vulnerable Canadians. Wait times for Canadians to access their hard-earned benefits are simply too long. The government must reinvest in service delivery and ensure that there are enough people employed to deliver these important benefits in a timely manner.
Our federal services cannot be allowed to deteriorate any further. We believe this government can and must consider progressive taxation measures to increase revenue that will allow it to invest in public services and programs that stimulate economic growth—programs such as a national child care system and the expansion of the Canada pension plan.
Corporation tax levels must be examined. Cuts to corporate taxes have not resulted in private sector reinvestment but have helped to starve the public treasury. It's public knowledge that there is considerable lost revenue in offshore tax havens alone, yet the Canada Revenue Agency has cut auditor positions, the very people needed to help ensure that everyone pays their fair share.
Our members expect to see tangible evidence in this upcoming budget of this government's commitment to restore federal public services.
Thank you.
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