Interventions in Committee
 
 
 
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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.
View Shaun Chen Profile
Lib. (ON)
Thank you very much. I want to start off by thanking the Auditor General and his team for their outstanding work and this set of reports.
I want to echo the concerns that have been expressed by my colleagues around the table, particularly Mr. Christopherson. He pointed to the Auditor General's opening statement in which he expressed the overall message that audit after audit, year after year, we still see that departments are focused on their own activities, not on the citizens' perspectives.
We've talked around the table today about the concerns of citizens, the experiences of citizens, the service to citizens. I want to start off by taking a moment to first deconstruct this terminology, because I believe it's very important that we are clear on who we serve. That, to me, is Canadians, in the most general, broadest, and most inclusive sense, whether we are talking about the oral health of first nations and Inuit children, or Syrian refugees who have now been welcomed to their new home, or indigenous women offenders who are not provided with culturally appropriate programs, or women offenders in general who are subjected to correctional programs designed for men, not women. To me, we need to be clear that we are talking about all Canadians and to understand who they are and be able to provide the types of services and programming that very clearly meet the needs of all Canadians.
With that said, I want to focus on the audit with respect to the Phoenix pay system.
Exhibit 1.2 on page 7 of the Auditor General's report shows a graph of the number of public servants with outstanding pay requests in 46 departments and agencies. This graph shows very clearly that over the course of two years, under the Miramichi pay centre, there were 15,000 public servants with outstanding pay requests. That number goes up to 35,000 in January 2016, when Phoenix was first adopted, and then we see an exponential increase in the number of outstanding pay requests, going up to the latest number, in June 2017, of 150,000.
If I were to take this graph at face value, I would understand it to be what it is described as—46 departments and agencies, the public services under those departments. However, reading the report tells me something a bit different. It points out that these outstanding pay requests were not capturing the information from all 46 departments over those two years, because some of them were not on board with those systems.
I'd like to hear the Auditor General's comment on what this means. To me, at face value, it means a significant and very worrisome increase in the number of cases. However, reading the report tells me that this increase can be attributed to departments that perhaps were not on the Miramichi pay system or the Phoenix pay system at certain points in time.
I'd like to hear the Auditor General's comments.
Michael Ferguson
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Michael Ferguson
2017-11-23 10:07
I'll start trying to give you an explanation, and I'll ask Mr. Goulet for more details.
The graph is dealing with just the 46 departments, so it is dealing with the departments that were being served by the Miramichi pay centre. Certainly by the time all of the second wave was done, everything had been transferred, and everything that happened after that was happening in the new pay system, but of course there was a transition period in getting the 46 departments' pay requests all processed at the Miramichi pay centre. That would have happened over a period of time as their pay advisers were removed and the services were starting to be provided at the Miramichi pay centre.
I'm not sure, and maybe Mr. Goulet has the details, about exactly when those services started to move over to the pay centre, at what pace those 46 departments moved over, and by what time all of that was completed.
I'll ask Mr. Goulet to provide those details if he has them.
View Cathay Wagantall Profile
CPC (SK)
That's excellent.
Clearly then, if we're saying all of this should be in place prior to release, will this extend the amount of time members remain on the payroll with the Armed Forces, do you think?
Gary Walbourne
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Gary Walbourne
2016-10-06 15:42
It's possible in some cases there would be an extension. If we look at some of the issues we know that have been in the media of late, such as the delay in getting a pension, that's a processing issue. I think if anyone from the department were here, they would tell you that the pension cell the people were put in, they were taken out, they were put in, they were taken out...we have a backlog.
I know the chief of the defence staff is attacking that now, but we need to get that backlog cleaned up and have a process in place that generates that pension allotment much quicker. Sometimes cost drives performance. I think if we start to see overruns on the salary and wage envelope, someone will bring attention to bear. Maybe there's a small cost up front, until we get the systems in place, but I do believe the process will be more efficient and effective going forward.
View Cathay Wagantall Profile
CPC (SK)
Okay. As a businessman you're able to do that and be successful, and yet it seems that we have issues on the other side of paying. The challenge is that these are people who are professionals. They can earn a good income over here, and you know the usual situation of earning less here. You see the value then in making sure that they're paid well, even though from your perspective it's too high.
Trevor Bungay
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Trevor Bungay
2016-10-04 16:47
I don't have a choice. If I don't have a doctor, then they're not getting help.
Trevor Bungay
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Trevor Bungay
2016-10-04 16:47
Yes, we do have to pay them more, but I walk into a doctor's office and I ask him for one or two days a month. That's all I'm asking for, one to two days a month. I'll fill your schedule. You come in. You see the patients. You take care of them. We'll pay you.
View Sherry Romanado Profile
Lib. (QC)
You may not be able to answer this, but I'm curious.
Are employees' compensation based on performance? Are you aware if they are, in fact, based on performance?
Michael Ferguson
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Michael Ferguson
2016-04-14 11:39
Do you mean in the Department of Veteran Affairs?
Michael Ferguson
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Michael Ferguson
2016-04-14 11:39
I think they would have to answer that question. I can't answer that.
View Sherry Romanado Profile
Lib. (QC)
First, I'd like to thank you for being here today and for the work that you're doing to address post-traumatic stress disorder. I have a couple of questions, but I am going to premise my questions with an apology because it may sound harsh.
We've just heard from the Auditor General, and I have to say that I'm a little concerned when I hear that 65% of cases are overturned, but I hear that in those cases, whether it be because of a lack of documentation or errors, the payments are not retroactive.
My questions are more for the ADM. Currently are there KPIs in VAC, or is there management by objectives with employees? Do employees have a performance-based incentive? What kind of quality control is in place? If there are errors happening, is there training so that these errors stop? If it's a performance problem, are people, are their jobs... I don't want to say that people are making... But they're making mistakes on the backs of the veterans.
Who is keeping track to make sure that if errors are being made, they are being addressed, that training is provided for folks, and that you're capturing the data of what kinds of errors are happening? But what happens to the data? Is it just in a report somewhere? My concern is what's happening.
I'm sure the employees wouldn't feel so great if they were told, “Well, we're going to take 16 weeks of your salary back.” My question is, what's happening?
View Sherry Romanado Profile
Lib. (QC)
I'm just going to stop you because what I'm referring to is performance. We're going to run out of time, so I'd like to have that answer, if possible.
Michel Doiron
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Michel Doiron
2016-04-14 12:39
Okay, so first of all, employees in Veterans Affairs are not paid per widget or whatever the right terminology is. They are at salary. They do get overtime and that. Executives, like other executives in the federal government, do have performance pay, but the employees do not.
The employees are held accountable. We have a quality assurance program that ensures that they are meeting the requirements of the program.
Michel Doiron
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Michel Doiron
2016-04-14 12:39
Yes, executives and directors have performance pay. That's like all employees in the public service, by the way. But our managers and our employees are not on performance pay. They're on salary and they do get overtime and things like that.
Work is tracked. People are held accountable for delivering their work. There is a quality assurance program that is relatively new, but there is a quality assurance program to ensure that the work performed by the employees is meeting the criteria or requirements of the acts. We have to remember that this is all in law, right? Our stuff is in law.
I forget if I answered all your points.
Maureen Sinnott
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Maureen Sinnott
2016-03-08 12:44
The $3.8 million that's listed in the statutory appropriations [Technical difficulty--Editor].
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