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View Diane Lebouthillier Profile
Lib. (QC)
Thank you very much.
Hello to all my colleagues.
Mr. Chair, I would like to take this opportunity, before beginning my presentation, to wish you a happy birthday.
Thank you for this invitation to provide details on the Canada Revenue Agency's strategies to combat tax evasion and aggressive tax avoidance.
Let me begin by saying that the Government of Canada and the CRA are firmly committed to combatting tax evasion and aggressive tax avoidance on all fronts. And we are all committed to making things much more difficult for those who choose not to meet their tax obligations.
In fact, since 2016, the Government of Canada has made investments that have helped provide the CRA with better data, better methodology and, ultimately, better results.
In particular, these investments have enabled the agency to develop a strategy that promotes global data sharing. Let's face it, tax evasion and aggressive tax avoidance are complex global problems.
The CRA is working with international partners through various multilateral organizations, including the Organization for Economic Co‑operation and Development, or OECD, and its forum on tax administration, the FTA. I was pleased to see that Mr. Bob Hamilton, commissioner of the CRA, was appointed chair of the FTA in August 2020.
As a result of its modern and collaborative strategy, Canada is member to 93 tax treaties and 24 international tax information exchange agreements. In fact, Canada is one of more than 70 countries that exchange information through the country‑by‑country reporting system.
In addition, Canada participates in the electronic funds transfer reporting program, which is related to international electronic funds transfers over $10,000. And with the implementation of the common reporting standard in 2016, Canada, alongside nearly 100 other jurisdictions, benefits from financial institution data that identifies financial accounts held by non-resident clients for tax purposes.
With these improved resources and tools, the CRA is now able to focus on large multinationals, high net worth networks, the underground economy, cryptocurrency and real estate transactions.
The CRA is now seeing these signs of success because of the investments made by the Government of Canada.
In recent years, the CRA has assessed the equivalent of more than $12 billion each year through audits, more than 60% of which were related to tax avoidance by large multinationals and aggressive tax planning by high net worth individuals.
And I must note that these investments have generated approximately $5 billion in additional federal tax revenue, as of March 2021.
Additionally, the CRA's criminal investigations program has enhanced its ability to investigate the most serious tax crimes. It is important to note that the agency investigates complex cases in collaboration with its partners in the Department of Finance and the Department of Justice to close what may be perceived as legal loopholes. And I must remind you that the CRA has shifted its focus to more hard-hitting investigations, which result in more jail time and higher fines.
However, we must never forget that tax evasion often involves very complex domestic and international money transfer structures, which require the CRA to complete lengthy and time-consuming intelligence gathering processes.
I also want to note that we are increasingly seeing high net worth taxpayers using the court system when they are audited in order to avoid providing documents and information to the agency. And I want to emphasize that the volume of complex litigation is up significantly from previous years, with approximately 3,000 active cases considered high level in complexity.
As a result, first announced in the 2020 fall economic statement and confirmed in budget 2021, the Government of Canada has committed to invest $606 million over five years, beginning in 2021‑22, to continue this complex work.
These investments will close the compliance gap for high net worth individuals, strengthen technical support for high-risk audits, improve the CRA's ability to identify tax evasion involving trusts, improve the CRA's ability to stop fraudulent or unjustified GST/HST refunds, and, finally, improve the criminal investigations program.
In addition to the financial investments from budget 2021 legislative changes will also be put in place to strengthen the rules on transfer pricing, oral testimony, base erosion and profit shifting, and mandatory disclosure rules.
Before I conclude, I would like to wish the chair of this committee, Mr. Wayne Easter, a very happy retirement.
I want to thank you personally for your outstanding work on behalf of Canadians. We will miss you.
Mr. Chair, I am proud to say that the Government of Canada and the CRA have shown determination and innovation in creating effective and proactive approaches to identifying those who avoid paying their fair share of taxes or who are taking steps to do so.
Thank you.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, as I said, combatting tax fraud in Canada and abroad is a priority for our government. In fact, we see that budget 2021 includes numerous investments and also policy proposals that have been very well received and are based on the hard work done by CRA in this matter.
I do hope, Mr. Chair, that my colleague will vote in favour of our budget so we are able to move forward and serve Canadians well.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I want to tell my colleague that before we can add up the amounts that were allocated to the Canada emergency response benefit, we have to wait for tax season to be over. We will then be able to collect the information.
However, I have to tell you that our government was very proud to be able to help Canadians at the beginning of the pandemic. I want to tell my colleague that it would have cost Canadians a lot more if our government had not stepped in.
View Diane Lebouthillier Profile
Lib. (QC)
Thank you, Mr. Chair.
I thank my colleague for his question.
In 2013‑2014, the CRA did 43 audits relating to tax evasion. In 2019‑2020, 1,100 audits were done. We can clearly see that all the work we have done is bearing fruit.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, the Canada Revenue Agency treats all Canadians equitably. That is one of the CRA's principles. The clients are truly central to our concerns and we try to offer them the best service possible, that is, fair service. We make sure that everyone pays their fair share.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, our government respects the independence of the CRA. My role is not to order the CRA to undertake audits and I do not intervene in those audits.
That is really part of the CRA's process, unlike the Conservatives' approach. If my colleague wants more information about administrative matters, I can ask Mr. Gallivan, the assistant commissioner, to answer him.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, Mr. Kelly is asking questions about administrative matters. My role, as Minister of National Revenue, is not administrative, unlike the Conservatives when they were in power and did not hesitate to try to intervene in the integrity of the tax system. If Mr. Kelly wants to obtain accurate information in answer to his questions, Mr. Gallivan will provide him with it.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I thank my colleague for her question.
I agree that combatting tax evasion is a difficult task for the government, a serious and complex one that takes time. We are tackling these very profound problems and very wealthy people who have the resources to hire the best lawyers and the best teams.
On the question of the Panama Papers, the government has invested over a billion dollars and has identified 900 Canadians. More than 200 audits have been completed and 160 audits are underway.
We have given the CRA the tools and resources to fight tax evasion. That fight was not a priority for the Conservative government, as was even confirmed publicly by one of their former ministers of national revenue, Jean-Pierre Blackburn.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, my colleague is asking me an important question.
In fact, all the work that has been started by the Canada Revenue Agency has to continue. In budget 2021, we propose to eliminate the loopholes that allow people to avoid paying taxes in Canada. We are providing an additional $304 million to modernize and improve the CRA's capacity to fight tax evasion. For the next steps, we want to modernize and improve Canada's general anti-avoidance rules.
I often hear the Conservatives talk about “the Liberals' pals” and it makes my hair stand on end. Because I have been at the Canada Revenue Agency since 2016, I have been able to see that it is the Conservatives who protect their pals. The Conservatives are the ones who don't want the wealthiest people, the ones with the means to pay lawyers and delay the processes, to pay their fair share. They are the ones who protect their pals, Mr. Chair, not the Liberals, who want everyone to pay their fair share.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, in 2019‑2020, more than 1,100 audits were done, unlike what was done in the past. For example, in 2013‑2014, 43 audits were done. So we see that the work is bearing fruit.
Thank you.
View Diane Lebouthillier Profile
Lib. (QC)
Thank you, Mr. Chair.
I thank my colleague for all of his preamble and his long question. I have sincere sympathy for the victims of fraud and I understand how much it can affect their lives. However, I can say that under the provisions of the Income Tax Act, I can't comment on any specific case. As my colleague knows very well, I cannot give and I will never give the CRA any instructions concerning criminal investigations.
As is the role of our government, my role is to provide tools and resources so that the CRA, which is autonomous, can do its own work. Out of respect for the obvious principles of judicial independence, politicians must not ever interfere in investigations. That would be really very inappropriate.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, as you all know, committees are independent. You manage your own business.
What I am seeing at present is that my colleague wants to play police officer. I invite him to give up his seat as a member and apply for a position as an investigator with the RCMP, where there are vacant positions. He would probably be happier there than in his present position.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I am going to ask my colleague to vote on budget 2021, which sets out proposals that really are even more useful for eliminating the loopholes used to avoid paying taxes in Canada, and that allocate additional money to the CRA so that it can modernize and improve its capacities.
In addition to all the work done and the agreements signed by the countries, I am also very happy to see that the United States has embarked on the same path. We are therefore going to work in collaboration with our partners. As I said at the outset, this is a long and complex issue, and I understand very well that the public are offended. We are continuing our work and we truly want to combat tax evasion. This is a priority for our government.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I thank my colleague for his question. We know that I have very sincere sympathy for the people who have been victims of fraud, just as he does. I truly understand how much this can affect their lives.
However, as I said, and it doesn't bother me to repeat it, our government respects the CRA's status. I can't instruct the CRA to initiate audits and I do not intervene in audits. This is what protects the integrity of the tax system. We are going to continue doing the work we do, and because we want to keep moving forward, I invite my colleague to vote for the budget that has been introduced. It contains even greater resources to tighten the net and make sure that people pay their fair share.
If my colleague wishes to get any more technical and administrative information, Mr. Gallivan can answer him.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, we are taking on very wealthy people. These people have the resources to pay the best lawyers, the best tax law experts, and the best teams to defend them.
Canada adheres to the rule of law, and these people use all legal means available to them to ensure that they do not pay their fair share.
I invite my colleague to support the budget so we can provide the resources to do even more to deal with those who commit fraud.
View Diane Lebouthillier Profile
Lib. (QC)
As I have said multiple times since the meeting began, these are very complex cases.
I would ask my colleague not to act as if he doesn't understand simple things. If I were to interfere in criminal investigations, I would be before the committee being accused of exactly the opposite.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I would like to tell my colleague that if she wants to change the laws, the Minister of National Revenue is not who she should be talking to; it's the Minister of Finance. The Minister of Finance is who prepares the legislation. At the Canada Revenue Agency, we just apply it.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, the CRA does not lose money every year fighting tax evasion. With the billion dollars that has been invested by our government, we have managed to recover $5 billion. Mr. Gallivan can provide all of the administrative information my colleague needs.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I would like to remind my colleague that when we came to power, we raised taxes for the richest people, but lowered them for the middle class. From the beginning, we were here to help, through the Canada child benefit and the guaranteed income supplement. We instituted measures to help Canadians before the pandemic and during the pandemic, and we are going to be here to help after the pandemic.
I can understand that tax evasion represents money lost, for my Conservative colleague, since it was never a priority for the Conservative government and fighting tax evasion is still not a priority for the Conservatives today.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, in 2013‑14, the CRA did only 43 audits in connection with international tax evasion. For 2019‑20, 1,100 audits were done. My colleague said we are doing fewer audits. That is false.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague, who is also my parliamentary secretary, for his question.
Our government has invested over $1 billion in the Canada Revenue Agency. It actually had to organize an entire sector of the CRA so that, as I said, it could provide the resources and tools needed to be able to combat tax evasion. We had lost expertise. We have sought out people, we have signed agreements, country by country, and we are working with the OECD, the Organization for Economic Cooperation and Development. The CRA works at the international level. That is why it is so important to support the 2020‑21 budget. We are giving ourselves additional tools to ensure that the rules and the laws that enable us to take more effective action against tax evasion are tightened.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his question.
As I said, I can understand very well. I have enormous sympathy for the people who have been victims of fraud. I know how much this must affect them.
Out of respect for the obvious principles of judicial independence, I believe that politicians should never interfere in investigations.
View Diane Lebouthillier Profile
Lib. (QC)
I can understand my colleague's frustrations. For our part, we govern. We establish priorities.
View Diane Lebouthillier Profile
Lib. (QC)
That is what my colleague will never be able to do. I have told him repeatedly that the Canada Revenue Agency is independent. I cannot initiate an investigation—
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, it is completely false to say that the ultra-rich have been treated with kid gloves. At least, that is not how I will treat them, because I have absolutely no respect for the people who defraud the tax system.
I don't know what my colleague is trying to do, but if he thinks we are going to solve everything, I think he is naive, because this is a global problem. As I said a little earlier, the ultra-rich pay ultra-lawyers and ultra-tax experts and do everything in their power not to pay their fair share.
That is why it is so important for our government to give the CRA the resources and tools needed to carry out investigations, which are ongoing at present. We have not yet achieved the anticipated results, but I can tell you that the CRA has done its job. I congratulate it.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, my colleague said that no investigation has been carried out, which is totally false. If he had listened to what Mr. Gallivan said, he would know that there are cases before the court as we speak. We have not yet achieved the anticipated results. It is not up to me to tell lawyers and the court whether they should proceed with a charge or not, because that is a completely independent process in which I do not intervene. What my colleague said is not true, and I urge him not to misinform the public.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, my colleague's question is really an administrative one, so I am going to ask Mr. Gallivan to answer it.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, the questions my colleague is asking me are administrative questions. I can't answer administrative questions, because that is not my role as Minister of National Revenue.
I will yield the floor to Mr. Gallivan.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I can tell you that tax evasion is particularly important to me, not just to me, but to our government as well. In fact, it is because it is so important to us that we have invested so much money in this program.
Mr. Chair, I urge the Conservatives to vote for the budget that has been introduced, to give us more tools that will have the effect of tightening the rules and combatting tax evasion.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I thank my colleague very much for her question.
What I am going to say is also found in my mandate letter. The CRA has not only developed a plan that promotes the collection of essential data with international partners, but it is also working in close collaboration with the other Canadian government departments. We work with the Departments of Finance, Justice and Public Safety.
What is set out in the budget is intended precisely to eliminate even more loopholes that are used to avoid paying taxes in Canada. That is why it is so important to us, at the CRA, for all our colleagues around the table to vote for the budget.
We want to improve the CRA's capacity to fight tax evasion and modernize the general anti-avoidance rules in Canada. That is a priority. We are moving forward and we are going in the right direction, but we need everyone's collaboration. Fighting tax evasion has to be a whole-of-government priority.
View Diane Lebouthillier Profile
Lib. (QC)
Thank you very much, Mr. Easter. I again wish you—
View Diane Lebouthillier Profile
Lib. (QC)
Hello, Mr. Chair, ladies and gentlemen.
I would like to thank you for this invitation to provide you with more information on the "Compliance Activities of the Canada Revenue Agency" report, which is part of the 2018 Fall Report of the Auditor General of Canada.
This morning, I am accompanied by Bob Hamilton, Commissioner of the Canada Revenue Agency, and Ted Gallivan, Assistant Commissioner, International, Large Business and Investigations.
First, I would like to thank the Auditor General for his important work. I welcome his recommendations regarding the Canada Revenue Agency's compliance activities.
Since my appointment as Minister of National Revenue, I have always worked toward a fair and equitable tax system that meets the needs of all Canadians.
Unlike the Conservatives, who made cuts without thinking of the consequences, our government has decided to reinvest in the agency and in the service it provides to Canadians.
Today, I want to reiterate that I am firmly committed to making sure that all Canadians are treated fairly and equitably by the agency. They must receive the benefits and credits they are entitled to, and assurance that everyone pays their fair share of income tax.
In light of some recommendations that were made, what the Auditor General is telling us in this report is that we can always do more; that we can always do better.
In October, I announced the appointment of the first chief service and data officer. That appointment confirms our wish to establish a service culture within the agency, a culture that maintains Canadians' trust, a culture that puts people at the centre of our decision-making process.
We therefore accept the recommendations regarding our reporting and our processes. I assure you that we will continue to put every necessary effort into making these improvements.
Regarding reporting, Canadians expect us to be able to better report on our results. To do this, I believe that every organization should have access to reliable data and indicators to make the best decisions.
We already started the work in 2016 by estimating the tax gap, and we will continue our work with the chief data officer.
Regarding processes, I agree that the law has to be applied consistently and fairly in all regions of the country. We work with millions of Canadians and businesses. However, each case is different. Some are more complex, others are simpler. However, in all cases, the compliance programs have only one goal: to make sure that the tax system is fair and equitable for everyone across the country. This is the assurance that we must give Canadians.
In response to the concerns the Auditor General raised, the agency has developed an action plan. A copy has been submitted to your committee. This plan illustrates the measures that will be taken to address the recommendations from the Auditor General, in addition to describing the approach that the agency intends to adopt in revising its internal processes and procedures.
A fair tax system is one that works for all Canadians.
As Minister of National Revenue, I will always be open to putting measures in place that ensure the fairness of our tax system and that make it easier for Canadians to meet their tax obligations.
Thank you very much.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his important question and congratulate him for asking it in French.
Since we've been in power, I've observed the legacy the Conservatives left to the agency: it was really in poor shape as a result of their decisions. According to the report published by the Professional Institute of the Public Service of Canada that was forwarded to us last week, the thoughtless cuts suffered by the agency during the Harper era had devastating consequences. The report clearly states:
The single most destructive event occurred as a result of the 2012 budget when, in one fell swoop, $250 million and 1,200 jobs were cut from CRA’s budget. All told, successive austerity initiatives resulted in almost $900 million in projected cuts and the scheduled elimination of almost 3,000 jobs.
As you'll understand, those deep cuts undermined services and investment in technologies.
When we came to power, my mandate letter was very clear: the CRA had to serve its clientele. That was really the thrust of my mandate letter. We therefore invested in clientele services in addition to allocating historic budgets to combating tax evasion. On my watch, we've appointed the first chief service and data officer, who really puts the clientele at the centre of our decision-making process.
We've worked hard for three years to change the agency's culture. The work has begun. There are 40,000 employees at the agency. It's a big ship, and it's changing course. I very much hope that my legacy will be improved services and that the culture change we've made is permanent.
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 Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his question.
First of all, I would like to remind my colleague that the horrific situation at the Canada Revenue Agency occurred during the 10 years of the Harper government's mandate. As I mentioned in my presentation, the report clearly states: "The single most destructive event occurred as a result of the 2012 budget when, in one fell swoop, $250 million and 1,200 jobs were cut [by the Conservatives] from CRA’s budget."
Having said that, I'm determined that Canadians will be treated fairly and equitably and that everyone will pay their fair share.
I'd also like to say that tax files are all different: some are simpler, others more complex. The complexity and extent of information influence the agency's approach. People who can't meet a deadline set by the agency can contact it and explain their situation.
I would ask the commissioner to add to that information.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his very important question.
I'd like to remind him that the Conservative government made cuts without any vision for the future of the agency and without any consideration for clients, who must be treated properly.
View Diane Lebouthillier Profile
Lib. (QC)
The call centres had inadequate equipment. Service business hours and employee training had been cut. I don't need any lectures from the Conservatives.
The work we've done at the Canada Revenue Agency in the past three years has helped us respond more effectively to the recommendations of the Auditor General of Canada.
View Diane Lebouthillier Profile
Lib. (QC)
We also modernized our call centres in response to the Auditor General's report last year. The call centres for business information requests migrated in November, and everything is working very well. Online information request services also migrated on December 3. From those new facilities, we'll be able to provide training to employees, which will enable them to respond more effectively to clientele requests.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his important question.
As I said, I've been determined since the start of my mandate to ensure that Canadians are treated fairly and equitably and that everyone pays their fair share. I'd also remind you that all tax files are different, some are simpler, others more complex. The complexity and scope of information requests influence the agency's approach. People who can't meet a deadline set by the agency may communicate with it and explain their situation. Those explanations are taken into account.
View Diane Lebouthillier Profile
Lib. (QC)
I'm telling you, I'm repeating to you, and I will repeat indefinitely that, as far as I'm concerned, everyone will be treated fairly and equitably.
View Diane Lebouthillier Profile
Lib. (QC)
Sir, if you came and visited my riding, given my reputation there, everyone would tell you that I treat people fairly and equitably. It's a point of honour for me.
View Diane Lebouthillier Profile
Lib. (QC)
I can tell you that our government has made historic investments in the fight against tax evasion. We're the first government that has invested nearly $1 billion in the fight against tax evasion. Furthermore, under our leadership, the agency has hired 1,300 auditors and conducted twice as many audits relating to offshore activities as were done under the Harper government.
View Diane Lebouthillier Profile
Lib. (QC)
Federal tax amounts associated with convictions have increased from $12.5 million in 2014-2015 to $45.4 million in 2017-2018.
View Diane Lebouthillier Profile
Lib. (QC)
I'm going to turn the floor over to the commissioner. He can answer your question.
View Diane Lebouthillier Profile
Lib. (QC)
As I told you, we've hired 1,300 new auditors and conducted twice as many audits as the Harper government did in the 10 years of its mandate.
View Diane Lebouthillier Profile
Lib. (QC)
The Canada Revenue Agency is currently conducting audits in more than 1,100 cases and criminal investigations in more than 50 offshore tax evasion cases. Our plan is working, and we're starting to see results.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his important question.
According to my information, the Canada Revenue Agency has identified more than 3,000 foreign entities associated with more than 2,600 owner beneficiaries who have connections with Canada, and it has already audited 80% of them. We have chosen to tighten the rules of the voluntary disclosures program, the VDP, to prohibit access to taxpayers who are named in the Panama Papers or in information leaks.
Under my leadership, we have struck a committee to determine how to tighten the agency's rules in tax evasion cases as well as the rules of the VDP. In the first year of my mandate, we began to review four countries a year under country-to-country agreements. When the agency intervenes with respect to a country, people who have assets in that country no longer have access to the VDP.
So we're doing everything necessary to ensure all taxpayers pay their fair share. I've said this, and I'll repeat it: we've given the agency tools to tighten the vice. I invite people to disclose their information voluntarily before the agency begins looking into what's going on in a particular country as part of the country-to-country exchange of information.
View Diane Lebouthillier Profile
Lib. (QC)
Pardon me, but I'd don't really understand your question.
View Diane Lebouthillier Profile
Lib. (QC)
Yes, indeed. I want to remind everyone here that Jean-Pierre Blackburn, a Conservative who was Minister of National Revenue, said that efforts to counter tax evasion were not a priority for the Conservatives when they were in power.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I'd simply like to say this to my colleague Mr. Poilievre: I get up at 4 a.m.; if you had held a meeting at 6 a.m., it would've been a pleasure for me to spend more time with you.
View Diane Lebouthillier Profile
Lib. (QC)
I have another meeting at that time.
View Diane Lebouthillier Profile
Lib. (QC)
Hello everyone, and thank you for the opportunity to appear before the Standing Committee on Finance to discuss the main estimates.
I would also like to thank the agency’s four assistant commissioners who are with me today: Ms. Kami Ramcharan, Mr. Ted Gallivan, Mr. Frank Vermaeten, and Mr. Geoff Trueman.
At the Canada Revenue Agency, putting tools and services into the hands of Canadians, so that they can easily file their taxes and receive the benefits to which they are entitled, is what drives the work we do.
As Minister of National Revenue, I made a commitment to the Prime Minister on behalf of all Canadians to adopt an approach focused on our clients, the Canadian people.
The needs of Canadians and the environment in which the agency operates are constantly changing. That’s why the agency must adapt and improve its services on an ongoing basis. This is true both for people who file electronically and for those who file on paper. Regardless of how Canadians choose to interact with the agency, we have made improvements.
Allow me to list some of the ones that are already benefiting millions of Canadians.
More and more Canadians are filing their taxes online. This year, more than 90% of the approximately 24 million returns Canadians filed were completed online. My Account, the agency’s digital portal, now has more than 7.9 million users.
Enhanced digital services, such as Auto-fill my return and Re-FILE, allow Canadians to file or edit their tax returns online.
You may also have noticed that you can now access your notice of assessment instantly. In fact, the Express Notice of Assessment is now available in certified tax software.
The agency is also simplifying its communications. Indeed, providing Canadians helpful information depends on the use of clear, simple, easy-to-understand language. In 2017, the agency simplified the language it uses in most of its correspondence to Canadians. The Clerk of the Privy Council, in his 25th report on service excellence, commended the agency for this effort.
Responding to the questions of Canadians is also a key service that the agency must absolutely provide by phone. That is why we have an action plan to improve the quality of the services that our call centre agents provide. During the recent tax-filing period, the agency hired additional agents, and more than 3,000 of them were able to answer questions from Canadians.
In addition, we have increased the number of self-serve options to help callers get the information they need more quickly and easily. These improvements and other new measures, such as better training for agents and the implementation of a new telephone platform, will allow more callers to have access to telephone queues, which means fewer lines will be busy.
As I mentioned earlier, it’s also important to continue meeting the needs of Canadians who use traditional methods to file their taxes. This year, we’ve made it easier for those who choose to file on paper to do their taxes by mailing approximately two million forms and guides directly to them.
In addition, people can now make tax payments in person at any of the 6,000 Canada Post outlets. This new in-person payment service makes life easier for taxpayers who live in remote areas and who may not be close to a bank or have easy access to Internet service.
Another new telephone service that was launched this year is File my Return. This service helps Canadians with low or fixed incomes, whose situations remain unchanged from year to year, to file their income tax returns by answering a few questions through an automated phone service. This year, we sent out more than 950,000 invitations to Canadians who may be eligible for this new service.
Lastly, I’d also like to highlight the important work done by volunteers from the Community Volunteer Income Tax Program, the CVITP. This program has been around for a long time, helping eligible people who have modest incomes and simple tax situations file their returns. The funding announced in Budget 2018 will allow the program to open more year-round tax preparation clinics, which will help more Canadians access the benefits to which they are entitled.
To conclude, I’d also like to briefly touch on the agency’s recent accomplishments in fighting tax evasion and aggressive tax avoidance. The agency has taken concrete and effective steps to crack down on tax cheats. It has broadened the scope of its tools for improving its risk assessment systems. It can now assess the risks associated with all multinationals every year.
These improvements, as well as those made to other systems, provide the agency with more relevant information to better identify large businesses and individuals who may be participating in aggressive tax avoidance schemes or avoiding tax laws.
Moreover, with the implementation of country-by-country reporting, as of this year, the agency will automatically have access to information from other jurisdictions. As of March 31, 2018, audits of more than 1,112 taxpayers were underway with respect to offshore non-compliance, and the agency was conducting criminal investigations into over 42 tax evasion cases. In 2016–2017, the agency’s efforts resulted in 37 convictions, over 50 years in jail terms, and $10 million in fines imposed by the courts.
And I’m pleased to inform the committee that the fiscal service improvements offered to Canadians will not stop there, because this is an ongoing process. The agency must absolutely ensure that Canadians receive the benefits to which they are entitled. That is my priority. Budget 2018 announced the implementation of a measure to automatically register individuals for the Canada Child Benefit. Accordingly, I am pleased that approximately 300,000 additional low-income workers will receive the benefit.
Let me end by saying that improving service delivery to Canadians will continue to drive our efforts. This will ensure that Canada’s tax system is fair, helpful, and easy to use.
I will now yield the floor to Ms. Ramcharan, who will speak about the main estimates.
Thank you for your attention.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for her question.
To begin with, I would say that our government is the one that has decided to invest in fighting tax evasion and tax avoidance. The budgets allocated in 2016, 2017 and 2018 to fight tax avoidance and tax evasion amount to nearly $1 billion. Over the past two years, we’ve been working to create a structure that will allow us to fight tax evasion and tax avoidance.
Auditors are currently being hired. The Canada Revenue Agency is able to assess 100% of large multinationals. I would also like to thank the committee, which recommended tightening the rules regarding the voluntary disclosures program. That is being implemented. Thank you very much for your recommendations.
We have also targeted four countries a year, we work with the OECD, and we have signed more than 60 information disclosure agreements, country by country.
View Diane Lebouthillier Profile
Lib. (QC)
Thank you for your question.
As mentioned in my mandate letter, customer service is a priority for our government. Budget 2018 will allow us to make concrete improvements through investments of more than $200 million in agency services. This considerable amount of money has allowed us to make significant improvements to the Community Volunteer Income Tax Program.
I had the opportunity to tour the offices of the Canada Revenue Agency, and everywhere I stopped, I made a point of meeting the volunteers. They mentioned that they had been left to their own devices and had received little support over the years. This has become a priority for me. As we know, volunteers work with the most vulnerable. We will therefore continue to work towards that end and take into account the information provided by volunteers across Canada.
Furthermore, thanks to new investments, we are working to modernize our digital and telephone services. We have restored postal service for seniors. Many people live in the regions and don’t have access to Internet. I think it’s very important to invest in services, contrary to the previous government, which had decided to reduce them.
View Diane Lebouthillier Profile
Lib. (QC)
As I mentioned earlier, our government is really the one that invested in call centres. I did a tour of Canada Revenue Agency offices across the country. I’ve met with employees over the past two years. When the Auditor General tabled his report to the agency, I wasn’t at all surprised to learn what was going on, because staff had already told us about the outdated system and the absence of investment under the Conservatives.
Implementing a telephone system that meets customer demand and providing training to employees will allow us to deliver the quality services Canadians expect.
View Diane Lebouthillier Profile
Lib. (QC)
The plan was proposed to the Auditor General when he tabled his report. As I mentioned earlier, we are currently working on a telephone system, which should be in place, as I mentioned earlier, in 2018-2019. We’ve hired new employees and training will be provided.
View Diane Lebouthillier Profile
Lib. (QC)
Our government is committed to respecting and renewing our relationship with indigenous peoples, which, in its opinion, is our most important relationship. It is also important that Northerners receive the credits to which they are entitled.
I met with several aboriginal communities in the Northwest Territories. We have adapted our communications products to Northerners and are working in partnership with Service Canada. We also visited 698 aboriginal communities across the country to share information on benefits.
View Diane Lebouthillier Profile
Lib. (QC)
I asked the agency for more information about what the people of the Northwest Territories had asked my department when I went to meet with them.
View Diane Lebouthillier Profile
Lib. (QC)
I don’t understand your question.
View Diane Lebouthillier Profile
Lib. (QC)
As I mentioned, the recommendations in the Auditor General’s report didn’t surprise me. In fact, when I met with the Auditor General, we were already working on an action plan to modernize telephone services, provide staff training and meet the standards that Canadians expect from the agency.
As for the much more technical details, I’ll ask Mr. Vermaeten to answer you.
View Diane Lebouthillier Profile
Lib. (QC)
I’m happy to give you that.
In 2016-2017, there were 37 convictions, resulting in more than 50 years of prison time and $10 million in court-imposed fines.
View Diane Lebouthillier Profile
Lib. (QC)
It’s related to tax evasion. If you want more technical information about tax evasion and what that means, Mr. Gallivan can tell you more.
View Diane Lebouthillier Profile
Lib. (QC)
Our government is the one that has invested the most to fight tax evasion and tax avoidance. As I mentioned, it might be interesting for you to have a little more information instead of talking through your hat. So I’m going to ask Mr. Gallivan to explain what tax evasion and tax avoidance really are.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Gallivan will answer your question.
View Diane Lebouthillier Profile
Lib. (QC)
We’ll give you the right information. Take the time to listen to what Mr. Gallivan has to say.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his question.
The last three budgets have really allowed us to create a whole structure to deal with tax evasion and aggressive tax avoidance. As I mentioned, tackling aggressive tax avoidance was not at all a Conservative priority. In fact, Mr. Jean-Pierre Blackburn, a former Minister of National Revenue, even said publicly that this was not a priority for the Conservative government.
Our government is really the one that has invested the most in fighting aggressive tax avoidance. I had the opportunity to meet with our OECD partners in Paris during the winter. The OECD commended us for the agency’s exceptional work. In the fall, Canada will even host the second OECD meeting on large businesses.
View Diane Lebouthillier Profile
Lib. (QC)
I would ask Mr. Gallivan to give you some technical details on that.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his question.
I know full well that living with a disability is very complicated, for the person with the disability, and for the family living with that person. I want to make it clear that the act has not been amended. Exactly the same law applies.
The review we are conducting is drawing to a close. We will submit the data to the committee—I’m talking about the committee you abolished in 2006 and which was reinstated—at its next meeting. Then I’d be happy to provide you with that information.
View Diane Lebouthillier Profile
Lib. (QC)
Committee members will be the first to receive that information from us. We can send it to you after that.
We do this out of respect for the committee members who are involved, who are dedicated to working on this update and who provide us with recommendations on the disability tax credit.
View Diane Lebouthillier Profile
Lib. (QC)
You’re asking me about the Phoenix system, but with regard to the Revenue Agency...
View Diane Lebouthillier Profile
Lib. (QC)
Thank you for your question.
I did, in fact, travel to the Yukon, the Northwest Territories and Nunavut to meet people. I can’t give you any statistics at this time, but I’ve asked the Canada Revenue Agency for more information on this. Indeed, all the people I met during my tour are concerned about this issue. Moreover, I made a public announcement on CBC that I was taking into account what people had told me and that we were going to ask the agency about it.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for his question.
As a single mother myself, I know full well what single mothers experience. I’ll say it and say it again: it’s important that people get the services to which they are entitled.
If you have specific cases to submit, you can send them to my team. I’ll make sure that the rules are respected.
View Diane Lebouthillier Profile
Lib. (QC)
In a previous life, I was a social worker. I’ve always worked for the less fortunate and those who need the services to which they are entitled. As Minister of National Revenue, I can tell you that I’ll be there for the poor and those who need help and support. I’m telling you and I’m telling you again, if you have specific cases to submit, I would like to receive them. I’ll make sure that those people get the credits to which they are entitled.
I’m going to ask Mr. Vermaeten to give you some technical details.
View Diane Lebouthillier Profile
Lib. (QC)
I’m going to ask Mr. Vermaeten to really explain the process.
View Diane Lebouthillier Profile
Lib. (QC)
I thank my colleague for her question.
As I mentioned, the Auditor General’s report didn’t surprise me at all. We made a major change at the Canada Revenue Agency to improve services and ensure that employees develop skills in much more specific areas. In 2016, we implemented what we called service renewal. Changes were made at the Canada Revenue Agency. More specialized services have been centralized in various offices. Instead of dealing with generalist staff spread across the country, people will be able to use these specialized services and get much better information.
Agency employees work very hard. I really want to congratulate them on everything they’ve done in terms of service renewal. The agency’s 40,000 employees contributed to this effort. Phenomenal work has been done since 2016.
Mr. Vermaeten may want to add to that.
View Diane Lebouthillier Profile
Lib. (QC)
Mr. Chair, I appreciate the opportunity to participate in the committee's study of supplementary estimates (B).
I am joined by Commissioner Bob Hamilton, who will speak to you more about this and other topics following my remarks.
I’d also like to introduce three senior officials from the Canada Revenue Agency: Janique Caron, Acting Assistant Commissioner, Finance and Administration Branch; Ted Gallivan, Assistant Commissioner, International, Large Business and Investigations Branch; and Frank Vermaeten, Assistant Commissioner, Assessment, Benefit and Service Branch.
I would like to start by providing members with an overview of some recent achievements following the second year of my mandate as Minister of National Revenue.
First, the Government is steadfast in its efforts to crack down on tax evasion and combat tax avoidance. We will increasingly identify aggressive tax planning schemes that are not in the spirit of the Income Tax Act.
The Government has invested nearly $1 billion in Budgets 2016 and 2017 to address this complex problem that is taking resources away from the services that improve the standard of living of all Canadians.
The Agency’s auditors now have access to more and better refined information, which helps them to focus on the individuals and corporations that actively seek to avoid paying their fair share of taxes.
Second, we have strengthened our partnerships and cooperation with international governments. The results speak for themselves: The Agency is currently conducting more than 990 audits related to offshore financial structures. It is investigating more than 42 corporations and individuals with offshore accounts. The Agency has also imposed $44 million in penalties on promoters and tax preparers.
Third, regarding our work to improve support for indigenous peoples and people living in remote communities, the Agency is working hard to keep the government's promise. It is increasing its outreach efforts to make these individuals aware of the benefits available to them, and reducing the challenges associated with filing their tax returns.
This past October, in Yellowknife, I announced the Agency’s Northern Consultations Action Plan. This plan outlines actions over the next two years to improve the Agency’s services for northern residents.
My main objective is to improve the client experience for Canadians who access tax services. Canadians communicate with us in good faith. They are important clients, not just taxpayers. They deserve to receive quality services in a timely manner. In order to improve the customer experience, here are some of the latest service improvements from the Agency.
The Agency has introduced enhanced electronic processes for filing tax returns, such as information auto-fill. This secure service allows Canadians to automatically fill in parts of their income tax and benefit returns with information that the CRA has available at the time of filing the return.
Last year, more than 86% of Canadians filed their taxes electronically, almost 750,000 more than the year before.
In 2017, the Agency has taken steps to improve and modernize its call centre services. We have hired more agents and we have increased self-serve options, leaving more time for agents to provide the answers to more complex questions.
The Agency is also in the process of upgrading its call queue technology, and enhancing its training programs to ensure our clients receive the quality service they deserve.
While I am proud of these accomplishments, I fully recognize that there is still work to be done. This week's Auditor General's report was clear, and I accepted all of his recommendations regarding our call centres.
In our first Budget, our government invested $50 million over four years to improve the range of services we provide to the public. Starting this year, our clients will begin seeing the results of these investments.
Rest assured, we are listening to Canadians.
We know we must explain the Agency’s actions as clearly as possible so that its intentions are not misinterpreted.
We are seeking advice from Canadians to ensure that the Government’s programs and services are tailored to fit those who need them. We encourage Canadians to enter into a dialogue with the Agency to share their concerns.
Today, I also announced that we have re-instated the Disability Advisory Committee. This committee will be made up of 12 members with different backgrounds; they will work with the Agency in order to come up with recommendations so that it can administer disability benefits in a more fair, more transparent and more accessible manner.
Outreach and consultation are key, and the Agency will continue to work with Canadians to ensure their views are incorporated into the decisions it makes.
Mr. Chair, I will now yield the floor to Commissioner Hamilton, who will speak to the Supplementary Estimates (B) and other matters of interest to the committee.
I thank you for inviting me to speak with you today.
View Diane Lebouthillier Profile
Lib. (QC)
Thank you for your question. I would also like to thank you for taking the time to meet with me. I know that you are a dedicated advocate for Canadians living with diabetes as well as for your constituents in Brampton South. My English isn't so good, so please accept my apologies, as I will continue in French.
First, I would like to point out that we have met with people from Diabetes Canada, Diabetes Quebec, and the Juvenile Diabetes Research Foundation to find out their concerns and to understand their points of view. After those meetings, I came to the conclusion that the agency clearly needs a mechanism to gather advice on these matters.
That is why, today, I announced the return of the Disability Advisory Committee. A committee of that kind had been established in 2004, but it was abolished by the Conservatives as soon as they came to power in 2006. These are the same Conservatives who now claim to be rushing to the defence of the most vulnerable.
The advisory committee will work collaboratively with the agency and will bring together major stakeholders in the field to make sure that all measures targeting persons with disabilities, including the Disability Tax Credit, are administered fairly under the provisions of the Income Tax Act.
The committee will advise the CRA on the specific needs and expectations of persons living with disabilities, will review and provide feedback on the CRA's administrative practices, in order to provide greater transparency and greater access to credits, and will make recommendations on how the agency can enhance the quality of the services we provide to persons with disabilities.
I understand completely that living with a disability can have consequences for those involved, their families and their surroundings. That is why I am committed to ensuring that the agency will administer measures for those with disabilities in a fair, transparent and accessible manner.
In the last two financial years, the number of those accepted has increased by 20%. We have worked to simplify the forms. We are working with specialized nurse practitioners who are able to fill in the forms for people living in areas where access to a doctor is more difficult. The agency has also hired nurses for the programs for persons with disabilities.
I invite the commissioner to complete my answer.
View Diane Lebouthillier Profile
Lib. (QC)
The government is determined to renew the nation-to-nation relationship with indigenous peoples, and to ensure that they receive the benefits and the credits to which they are entitled.
I have met with a number of indigenous communities to discuss problems with access to the agency's services, and I will continue to do so. I come from a remote area myself. So I know full well what it means to be a long way from Ottawa. As the proverb says, “out of sight, out of mind”.
The Canada Revenue Agency has published its communication materials in a number of indigenous languages. We are working in partnership with Service Canada. The agency has visited 698 indigenous communities across the country in order to provide them with information about the benefits.
Although the agency has made a lot of progress, there is still work to be done and we are going to do it in collaboration with indigenous communities and with our partners in the regions.
View Diane Lebouthillier Profile
Lib. (QC)
As I mentioned, I am aware of the Auditor General's report and I accept all the recommendations it contains.
Right from our first budget, we decided to invest $50 million over four years, specifically to work on hiring staff in the call centres.
I can also tell you that, unlike your government, which, when Kerry-Lynne Findlay was the minister, made cuts to the Canada Revenue Agency, we have made investments in it, such as setting up a new telephone platform in order to better meet the needs of the customers who call the Canada Revenue Agency. The telephone system is 20 years old and it is out of date.
The cuts that you made also affected employee training and support. So we are working on training, because it is important to continue to provide training and support, so that Canadians can receive the best information possible.
We must also respond to the standards and needs of Canadians, not establish standards that meet only the needs of the Canada Revenue Agency.
View Diane Lebouthillier Profile
Lib. (QC)
Not at all. I am very pleased to be able to tell you that, in the last two years, I have visited the vast majority of Canada Revenue Agency offices. I went to see the call centres, I met with the employees who work there, and I listened to telephone calls.
Starting last year, we established our action plan so that we could meet the needs of Canadians. In my two years of work in the field, I have come to realize the extent to which the cuts that your government had made had weakened, and dismantled, brick by brick, the services provided to Canadians by the Canada Revenue Agency in the call centres. You should be ashamed of what happened.
View Diane Lebouthillier Profile
Lib. (QC)
I will let the commissioner answer your question.
View Diane Lebouthillier Profile
Lib. (QC)
What I can tell you today is that, in my opinion, it is important to let the agency do its job. The Canada Revenue Agency takes all the information about the Paradise Papers seriously.
View Diane Lebouthillier Profile
Lib. (QC)
The Canada Revenue Agency receives 30 million tax returns per year, from individuals or companies, and I cannot comment on any of them.
View Diane Lebouthillier Profile
Lib. (QC)
The Canada Revenue Agency will do the job it has to do. I can assure you that, as long as I am in this position, it will be done exactly in that way, meaning that we will not discuss any specific case.
View Diane Lebouthillier Profile
Lib. (QC)
I work with the officials of the Canada Revenue Agency. What our government has done in the last two years is invest almost $1 billion specifically to combat tax evasion and tax avoidance.
View Diane Lebouthillier Profile
Lib. (QC)
All taxpayers' files are confidential and will remain confidential. I can assure you that no, repeat no, parliamentarian will have access to the Canada Revenue Agency's files.
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