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Results: 1 - 15 of 65
Janique Caron
View Janique Caron Profile
Janique Caron
2020-06-16 18:07
Thank you, Mr. Chair.
Good evening, and thank you for the opportunity to appear before the committee to present the Canada Revenue Agency's main estimates for 2020-21, and to answer any questions you may have on the associated funding.
My understanding is that a copy of my full remarks, in both official languages, has been provided to the clerk. To respect the members' time and to avoid technological issues, I will be providing my remarks in one official language and will be prepared to respond in either official language.
I am accompanied today by my colleagues: Frank Vermaeten, assistant commissioner, assessment, benefit and service branch; Geoff Trueman, assistant commissioner, legislative policy and regulatory affairs branch; and Ted Gallivan, assistant commissioner, compliance programs branch.
As you are aware, the CRA is responsible for the administration of federal and certain provincial and territorial tax programs, as well as the delivery of a number of benefit programs. Each year, the agency collects hundreds of billions of dollars of tax revenue for the Government of Canada and distributes timely and accurate benefits to millions of Canadians.
It should be noted that the CRA's 2020-21 main estimates do not reflect incremental resources required for the payments or the administrative costs in support of the Government of Canada's measures to support Canadians and businesses facing hardship as a result of the global COVID-19 pandemic. These measures include, as you know, the Canada emergency response benefit, the Canada emergency wage subsidy and the Canada emergency student benefit, to name a few. The cost of the emergency benefit payments will be funded through statutory authorities, including those under the Department of Employment and Social Development. The funding associated with the administrative costs will be sought separately by the CRA in the coming months. Our priority is to deliver on these measures as quickly as possible.
In the meantime, to fulfill its mandate in 2021, the CRA is seeking a total of $7.9 billion for these main estimates. Of this amount, $3.5 billion requires the approval of Parliament; whereas, the remaining $4.4 billion represents forecasts for statutory authorities that are already approved under separate legislation. These statutory items include the climate action incentive payments, children's special allowance payments, employee benefit plan costs and, according to section 60 of the CRA Act, the spending of revenues received or activities administered on behalf of the provinces and other government departments.
These 2020-21 main estimates represent a net increase of $3.4 billion when compared with the 2019-20 main estimates. Almost the entire amount of this increase is related to the forecasted statutory climate action incentive payments of $3.4 billion, which returns the bulk of direct proceeds from the federal fuel charge to eligible individuals and families living in provinces that have not met the Canada-wide federal standard for reducing carbon pollution. The CRA is responsible for administering the fuel-charge component of the Greenhouse Gas Pollution Pricing Act, which includes the climate action incentive payment.
Excluding the statutory climate action incentive payment, the agency's 2020-21 main estimates represent a net increase of approximately $33 million, or 0.7%, when compared with the 2019-20 main estimates. The largest component of this change is an increase of $69 million for collective bargaining adjustments for some 12,000 employees represented by the Professional Institute of the Public Service of Canada.
Other increases to the agency's budget include a $24-million adjustment to forecasted statutory payments under the Children's Special Allowances Act for eligible children in the care of agencies and foster parents. These payments are equivalent to the Canada child benefit paid to biological and adoptive parents. There is also $27 million in incremental funding for measures to improve tax compliance that were announced in prior budgets. Thanks to the significant investment made in recent years, the CRA has expanded its tools and capacity to target clients who attempt to conceal their assets to avoid paying their share of tax.
To give you a sense of the kind of programs that are being supported by this funding, allow me to touch on some specifics. To further combat tax evasion and aggressive tax avoidance, the CRA has hired additional auditors, conducted outreach and education, and built technical expertise to target non-compliance associated with cryptocurrency transactions and the digital economy. Offshore audit resources have been expanded, which directly supports the fairness and integrity of the tax system by ensuring that wealthy individuals and corporations do not circumvent their tax obligations.
Improved information technology tools and systems, combined with closer international co-operation, allow the CRA to focus on the higher-risk taxpayers. Although efforts in this domain have been affected by COVID-19, preparation for the eventual full resumption of this important work is under way.
These increases are partially offset by a $49-million adjustment associated with changes in the funding profile for various measures announced in previous federal budgets, a $25-million reduction in statutory contributions to employee benefit plans and in the forecast of cost recovery revenues for initiatives administered on behalf of the provinces and other government departments, and $13 million in transfers with other government departments, including an adjustment to accommodation and real property services provided by Public Services and Procurement Canada.
In closing, the CRA is listening to Canadians, changing how it works and improving services. The resources being requested through these estimates will allow the agency to continue to deliver on its mandate to Canadians by making it easier for the vast majority of taxpayers who 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 their taxes and benefits.
At this time, we will be pleased to respond to any questions you may have.
View Sébastien Lemire Profile
BQ (QC)
Thank you, Mr. Chair.
In the Library of Parliament's accompanying documents, one of the questions mentions that the 2016 budget provided $351.6 million over five years to the Canada Revenue Agency, or CRA, to improve its ability to collect outstanding tax debts, with the hope of recovering an additional $7.4 billion over that period. In the previous intervention, it was also mentioned that these budgets had been increased.
In the 2020-2021 main estimates, how much money does the CRA allocate annually to combat tax avoidance and tax evasion?
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2020-06-16 18:30
Thank you for the question, Mr. Lemire.
Half of our overall budget of $900 million is aimed at abusive tax planning by multinationals or wealthy citizens. This represents 50% of our overall budget, or about $450 million.
I can follow up to give you the exact number, but it's usually 50% of our effort, which is aimed at 1,200 multinationals and 10,000 affluent Canadians.
The other budget is $2 million for small and medium enterprises.
View Sébastien Lemire Profile
BQ (QC)
Since 2016 and over a five-year period, you estimate that you can recover an additional $7.4 billion.
How did you come up with this evaluation? Is this amount still up to date?
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2020-06-16 18:31
I'll make a clarification.
You're talking about an amount related to collection, not assessment. In the current fight, we're assessing, and then there's the collection. For these analyses, we rely on the past. We look at what the marginal ratio of our results is. Because we have a risk-based approach, the marginal results go down. In planning, we assume that it will be the marginal result we see today, with a decline. That's the basis on which we produce the estimates. Just prior to COVID-19, our programs and estimates were generally meeting expectations. We were able to collect the expected amounts. We had the green light just before the COVID-19 pandemic started.
View Sébastien Lemire Profile
BQ (QC)
You are certainly in a position to point to companies that are at fault that you find difficult to catch or to hold to account for repaying that money. In many cases, these companies have taken advantage of the Emergency Wage Subsidy, the Canadian Business Emergency Account or the very large business support funds that were put in place in the context of the COVID-19 pandemic.
Is that the case? In your opinion, should these companies have been denied access to the assistance programs put in place to support businesses during the COVID-19 crisis?
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2020-06-16 18:32
That's an excellent question.
When it came to these emergency programs, the rules were pretty clear. With regard to the emergency wage subsidy, for example, we had to base our decisions on existing legislation. For people with a history of aggressive tax planning, we spent a lot of time making sure they were eligible for the program. However, it should be remembered that this is a program that is designed to help employees and the funds are intended to subsidize salaries. We therefore limited ourselves to scrutinizing these companies before making payments. We are talking about a ten-year period. It's really about supporting the employees at the end of the day.
View Sébastien Lemire Profile
BQ (QC)
This is indeed part of the answer that the minister often gave us during question periods. Nevertheless, some countries, such as Denmark, have been bold in passing laws to better fight fraudsters.
Would you have liked to have benefited from additional legislation? Would it have had a concrete impact on your work?
Would you have been able to increase collections if the law had been tougher?
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2020-06-16 18:34
I think there's work to be done on the legislation itself. There are a number of ways, outside of the assistance programs, to address this issue that we are all concerned about.
When we see cases, such as the Loblaws case, before the courts, or the Cameco case where, despite the audits and the efforts of the agency, the Tax Court of Canada or the Federal Court of Appeal say that tax planning is done in good faith under the current law, I think we have to invoke the need to close loopholes.
Outside of the crisis, we have other ways to achieve the goal we all aim for, such as closing the loopholes.
View Sébastien Lemire Profile
BQ (QC)
Are you able to identify these escape mechanisms or the ways in which companies are doing it today? We are all familiar with tax havens, like Barbados, for example, but what are the modern ways of doing things?
Is there anything in the digital economy that you're particularly concerned about that could be changed?
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2020-06-16 18:35
There's a lot packed into that question.
Before turning to the digital issue, I will limit myself to the issues that concern us at the agency. In terms of our protocol regime, which includes protocols with Barbados and Luxembourg, those arrangements were made at a certain point in time, and I think we have a good track record in the courts that gives some food for thought.
As far as multinationals are concerned, when we started to have country reports under a program of the Organisation for Economic Co-operation and Development, or OECD, we found that Luxembourg, for example, appeared in a disturbing number of documents. We were aware of that, but when we saw the percentage of Canadian companies that had trusts in Luxembourg, it gave us pause for thought. This is an example of a debate we could have to determine whether it is time to review our protocols with Luxembourg.
View Paul Manly Profile
GP (BC)
Thank you, Madam Chair. It's an honour to rise in the House again and to be here.
I'd like to acknowledge that we are on the traditional territory of the Algonquin first nation as uninvited guests. To them I say meegwetch.
I'd like to acknowledge the hard work of my staff members, who have been working overtime during this crisis. Answering the phone calls and the emails, and dealing with constituents in crisis, is difficult work. I really appreciate what they've done, and I know the constituents do as well.
I'd like to thank the government for its response, and I know that many Canadians have needed help and are getting help. The opposition and members of the Liberal backbench have brought forth all kinds of issues and gaps in the programs, and the government has been responsive and has been helping Canadians. I think it's really important at this time that we have this unity, working together, because our constituents and Canadians are important. They need our help, and playing politics during a pandemic and a crisis isn't the right thing to do. Working together to make sure that we deal with people, and help them with their problems, is the right thing to do.
There are still many needs that people have. For small businesses, too many are still falling through the cracks and are unable to access relief. A lot of micro-businesses are having problems. Some landlords won't sign the new CECRA program. In cases where landlords refuse to co-operate, commercial tenants should be able to apply directly to the government. The Canadian Federation of Independent Business's latest report found that half of small businesses surveyed cannot make their June rent. We're asking the government to allow tenants to access the 50% rental funding when landlords don't agree to opt in to the CECRA program. We're also asking that the government ease the 70% revenue drop criteria for CECRA so more businesses can apply.
CEBA, the business account, still requires a business chequing account. I know that the government has promised changes to that, and I'm looking forward to hearing about those changes. This is something that opposition members have brought up a number of times.
Many in the arts and music industry who rely on summer business will need a lot more help to survive until next year. I'm thinking about all of the festivals and the industries behind them that support them. RSM Productions in Nanaimo, a sound and lighting company, has lost all of its contracts. It is a company that needs help.
Municipalities have experienced staggering drops in revenue, and increased costs. They must continue to provide essential services including police, fire, water, sewage and waste management, regardless of those lost revenues. They're going to have trouble collecting property taxes from businesses and homeowners in financial distress. In my community, they've had free public transit, but ridership has been down to next to nothing anyway. The FCM estimates that municipal transit systems are incurring monthly losses of about $400 million due to diminished ridership, part of at least $10 billion to $15 billion in near-term, non-recoverable losses due to COVID-19.
We need to help municipalities. I understand that they are under provincial jurisdiction, but we work with municipalities with the green infrastructure fund and with the gas tax, and we need to be able to help municipalities weather this storm.
Aboriginal friendship centres have been asking for more help. I know the Tillicum Lelum Aboriginal Friendship Centre in my community provides a broad spectrum of important programs for the 12,000 urban indigenous people in my riding, including a health centre, youth and elder housing, a safe house for homeless youth, a home for single moms and a food hamper program. It also provides mental health and addiction counselling, and continues to provide that online during this crisis. It's an integral part of the urban indigenous community, and it's seriously struggling. It hasn't received any funding yet, and it's expecting to receive maybe $25,000 to $30,000. I'm hoping that the government steps up with more funding for urban aboriginal organizations.
Many non-profit organizations are suffering. In B.C., non-profits contribute $6.4 billion to the economy and employ 86,000 people. However, 78% are facing serious disruption, 74% have seen a large decrease in funding, and at least 19% are shutting down permanently.
I was disappointed to see the government contract with Amazon rather than Canada Post for delivering PPE. That's because of the way Amazon treats its employees. We see that Jeff Bezos is now on track to becoming the first trillionaire. In contrast, our Canada Post employees are paid well, they work hard for their money and they return that money into our economy. The Canadian Union of Postal Workers has great ideas for how it can improve things in our economy, including public banking and more energy-efficient delivery systems, so we really need to be supporting our Crown corporations rather than a trillionaire.
Our airlines have really let down passengers. The local chamber of commerce bought tickets to go to two separate conferences, and when they cancelled those tickets they got a voucher for 11 months from the day of cancellation. How are they going to use that for the annual conference next year? That's completely useless to them. I have constituents who have tickets that the airline said they needed to use before September, but there are no bookings before September. Therefore, the airlines are letting people down. We need to stand up for consumers in this country the same way that the Europeans and the Americans do and make sure that the passengers get a refund or at least a voucher that they can use. Eleven months is ridiculous. Four months is ridiculous.
People living on CPP disability need relief and really need a permanent increase in their benefits so that they are on par with the benefits that the province gives people on disability.
With our health care system, we've seen the need for improving health care, and we know there's a $15 billion deficit just in maintenance in our health care system; and our long-term care system needs to be brought into the health care system properly so that our seniors are not abandoned to a for-profit model.
Regarding CPP, OAS and GIS, our seniors have been asking for a raise in these things for a long time. They deserve it. The cost of living in my riding has gone way up. Because real estate values have escalated in the last five years, the cost of renting a place has driven up the cost of living. We need to take these things into consideration. It's not the same in every part of the country, but in some parts of this country it is out of control.
I know there are worries about fraud in the relief programs, but we see fraud in other areas. We see polluters who abandon their messes, declare bankruptcy and then leave it for us, the citizens and the taxpayers, to clean up. That's privatizing the profits and socializing the losses, and that needs to end.
We also need to make sure that offshoring of wealth, whether that's legal through loopholes or illegal through tax evasion, is stopped. We lose about $19 billion a year in taxes, through tax evasion or tax avoidance.
One of the things I've been talking about here for a while is a guaranteed livable income. It's similar to the basic income or universal basic income that's proposed, but we base it upon a basket of goods, the same way that a living wage would, so that people have the things they need to survive. It's an idea that has gained support across the political spectrum, but the Greens have been talking about this for several decades. In fact, 50 Canadian senators have written to the Canadian Prime Minister, calling for a minimum basic income for Canadians. The GLI establishes an income floor below which no Canadian can fall. It's something whose time has come.
This crisis has shown us that there are a lot of issues we need to deal with. One of the things it has taught us is that life is more important than money, and when we work together we can get things done. I look forward to continuing to improve the programs the government has put forward.
View Alain Therrien Profile
BQ (QC)
Thank you, Madam Chair.
Last week, during a virtual sitting of Parliament, I repeatedly asked the Minister of National Revenue about tax havens and I was treated to a broken record. She kept telling me things that didn't make sense and that didn't answer any of my questions. Believe me, even a Buddhist monk would have lost patience.
I've analyzed the situation. Everyone thinks that it makes no sense that people who can afford to pay their taxes aren't doing so. Everyone understands this, except the government.
In the minister's responses, throughout her broken record, I found something. She said that the government would fight aggressive tax avoidance. I think that I understood and my question is simple. What's non-aggressive tax avoidance?
View Mona Fortier Profile
Lib. (ON)
We know that we're currently going through an unprecedented crisis. We want to support workers, and we're doing so through the Canada emergency wage subsidy. The subsidy is designed to help Canadians pay their bills, keep their jobs and get through this crisis.
If a business that avoids paying taxes gets caught, it must face the full force of the law. The business may be deemed ineligible for federal emergency programs. The government will target the decision-makers, whether they be the executives, board of directors or shareholders.
View Alain Therrien Profile
BQ (QC)
I can see that the Minister of Middle Class Prosperity is reading the responses prepared for her colleague from national revenue. We aren't out of the woods yet. I'd like the responses to be as long as the questions.
Let me start again. What's non-aggressive tax avoidance?
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