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View Kelly Block Profile
CPC (SK)
I call this meeting to order.
Good morning, everyone. Welcome to meeting number 37 of the Standing Committee on Public Accounts. The committee is meeting in public today and is being televised.
Pursuant to Standing Order 108(3)(g), the committee is meeting today to study “Report 7, Canada Emergency Wage Subsidy”, of the 2021 reports 6 to 9 of the Auditor General of Canada.
Today's meeting is taking place in a hybrid format pursuant to the House order of January 25, 2021. Therefore, members may be attending in person in the room or remotely by using the Zoom application.
Though I know we are all familiar with how our meetings work, I do need to remind members and witnesses of a few rules that we must follow.
Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of either “Floor”, “English” or “French”.
Before speaking, click on the microphone icon to activate your own mike. When you are finished speaking, please put your mike on mute to minimize any interference. When speaking, please speak slowly and clearly. Unless there are exceptional circumstances, the use of headsets with a boom microphone is mandatory for everyone participating remotely.
Should any technical challenges arise, please advise the chair, and note that we might then need to suspend for a few minutes as we want to ensure that all members are able to participate fully.
Now I'd like to welcome our witnesses.
Joining us today from the Office of the Auditor General are Andrew Hayes, deputy auditor general, and Philippe Le Goff, principal.
From the Canada Revenue Agency, we have Bob Hamilton, commissioner of revenue and chief executive officer; Ted Gallivan, assistant commissioner, compliance programs branch; and Maxime Guénette, assistant commissioner and chief privacy officer, public affairs branch.
From the Department of Finance, we have Michael Sabia, deputy minister; Andrew Marsland, senior assistant deputy minister, tax policy branch; Isabelle Jacques, assistant deputy minister, law branch; and Maude Lavoie, director general, business income tax division, tax policy branch.
I have been informed that Mr. Hayes won't be making an opening statement, so, Mr. Hamilton, you have five minutes, and then I'll go to Mr. Sabia for five minutes.
View Philip Lawrence Profile
CPC (ON)
Thank you very much. Thank you for your time today. I appreciate the witnesses' testimony there so far.
My questions will start with Mr. Hamilton.
For your benefit, Mr. Hamilton, I'm going to be referring to pages starting at page 276 in the documents, as I have them, and going to page 280.
On page 277, it says that there was about $77 billion of CERB payments and there was a total potential exposure of tax risk of up to $20 billion. I understand that to be the amount of money the CRA would suspect that they would collect against these CERB benefits. Is that correct, Mr. Hamilton?
View Philip Lawrence Profile
CPC (ON)
That's actually my next question. I'm wondering if time has started to tell, as it were, as a majority of Canadians have now filed their tax returns. How much in tax revenue did you actually collect on the CERB benefits, if you have those numbers? If not, I assume that's a number you could access for us.
View Philip Lawrence Profile
CPC (ON)
Perfect.
Further to that, you said that there was $1 billion considered at risk of default. I'm wondering if you gentlemen would be kind enough to unpack what that means. Does that mean that Canadians are just not paying their taxes, or what was the risk that you highlighted there?
View Philip Lawrence Profile
CPC (ON)
I'm sorry. I didn't quite follow that last comment. It intrigues me a bit that you needed 50 people or 5,000. Do you mean in collecting the taxation?
View Philip Lawrence Profile
CPC (ON)
Okay.
As per the earlier question, I'd like to know what the actual amount defaulted was, even if you have a partial number. I realize that you may not have it with you today, but perhaps we could get that within three or four weeks, or whatever the standard is for our committee. I'm sure the chair could direct us. It's just to get that number on where we are right now. I understand that not everyone has their tax filing in.
Would that be appropriate?
View Philip Lawrence Profile
CPC (ON)
Thank you. I appreciate that.
Then, because I'm a Luddite and still using paper here, if I flip the page, I have on page 278 a large portion of redacted documents underneath “Findings”.
Some of the redactions clearly make sense. There are names and there are technological services that you can sort of read into, and I understand why the minister would not give this away, but this redaction doesn't make any sense to me prima facie, and I'm wondering if you can provide me with some information to reassure me that this is a reasonable redaction here.
View Kody Blois Profile
Lib. (NS)
View Kody Blois Profile
2021-06-08 11:22
Thank you, Madam Chair, and thank you to our witnesses for appearing before our committee again. You've been very generous with your time. Obviously we have a role as parliamentarians to hold the government to account, but to Mr. Sabia and Mr. Gallivan and others, we know you're busy trying to drive government programming today as well.
Perhaps I'll just continue with Mr. Gallivan, because he was answering some of the questions from Mr. Lawrence. Mr. Lawrence was talking about some of the early projections or numbers relating to the CEWS program and some of the concerns around the uncertainty that existed.
Is it fair to say that the numbers that were being quoted on those pages were from the early midst of the pandemic, when there was a lot of uncertainty about the extent of the economic harm that could have been caused to the economy and also about what this was going to represent for small businesses across the country?
View Kody Blois Profile
Lib. (NS)
View Kody Blois Profile
2021-06-08 11:24
Okay. That's helpful in terms of the date.
I think all parliamentarians can appreciate the nuance of not knowing every month how the health response was going to pan out across the country and how that would really dictate some of the viability of those small businesses and their ability to pay back the money that the government was trying to provide to bridge businesses through to the other side of this pandemic. Based on the vaccine rollout and the way we're moving forward, that will be relatively soon, hopefully.
Obviously we're talking about the report from the Auditor General about the wage subsidy, so I had the ability to go back. Of course, as parliamentarians, we only get a short time to ask questions—five or six minutes per round—so I want to revisit some of the elements that were in that report. One of the recommendations was recommendation 7.35, which talked about a full auditing and accounting of these programs.
Again, as Mr. Sabia mentioned in his remarks, these programs are still ongoing, at least until September. I understand that there's a legislative authority to extend them if necessary. Hopefully, that won't be the case. Can you speak to the full accounting? I presume that work may already be started, but it's going to be largely finished once the actual program winds up in September, presumably.
Maybe that's a question for Mr. Sabia.
View Kody Blois Profile
Lib. (NS)
View Kody Blois Profile
2021-06-08 11:27
Thank you, Mr. Sabia.
I'll move to Mr. Hamilton.
I don't have the blues right in front of me, but one thing that caught my interest last time was that a lot of committee members were talking about social insurance numbers and whether that was something we could tie in to make sure there was an accounting. I know the government systems are complex. Even department to department, there is not always perfect harmony between the systems that we operate. Certainly, I know that the government is working to be able to bridge those gaps.
Can you speak about the nuances and what your perspective was and what you remember back during this time in late March, early April, when things were really changing day by day? Every time that we put a particular nuance on a program, I presume it could slow the program in its response even by a day or two, depending on the nature of said nuance, as we try to make sure we have that accounting in place.
View Julie Vignola Profile
BQ (QC)
Thank you, Madam Chair.
Ladies and gentlemen, thank you for being here today.
Approximately 28% of employers who applied for the subsidy in 2020, equivalent to roughly 62,000 applicants, did not file a GST/HST return for 2019.
For 2020, 15% of recipients who had to file a GST/HST return between January and June 2020 were non-filers.
If the CRA did not have all the information required to verify that the business needed the subsidy, shouldn't the agency have just waited until it had the information to issue the payments, instead of trying to recover overpayments afterwards?
View Julie Vignola Profile
BQ (QC)
Thank you.
Report 7 states that 28% of the subsidy applicants were annual non-filers, and 15% were monthly and quarterly non-filers. Are those numbers comparable to non-pandemic years?
View Julie Vignola Profile
BQ (QC)
I see. Thank you.
Do you have an idea of what it will cost to recover overpayments?
View Julie Vignola Profile
BQ (QC)
What do your estimates say? What will it cost to recover the overpayments?
View Julie Vignola Profile
BQ (QC)
Thank you for providing that.
My fellow member brought up the risks stemming from Canada's COVID‑19 economic response plan and your tax risk exposure estimate of $20 billion, including $1 billion at risk of default.
Why did you not set up a direct collection system? After all, such a system is already in place for the employment insurance program.
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