Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 4 - Appendix


Custom Excise Union Douanes Accise

submission to

The Standing Senate Committee on Banking, Trade and Commerce

respecting

Revenue Canada's Administrative Consolidation

1996 Update

Presented by:

MANSEL R. LEGACY
NATIONAL PRESIDENT
CUSTOMS EXCISE UNION DOUANES ACCISE

OTTAWA, MAY 30, 1996

Check Against Delivery


Acknowledgment

  1. It is both a privilege and an honour to be able to submit a Brief on the subject matter of Bill C-2, An Act to Amend the Department of National Revenue Act or, as it is now more commonly referred to, Revenue Canada's Administrative Consolidation. As you are aware, Senators, it has been more than two (2) years since Bill C-2 received Royal Assent and we could not be more pleased that you have agreed to accept our testimony on this matter.
  2. We wish to thank you and trust you will find the submission of our Brief important and revealing. We also beg your indulgence and understanding when reading our sometimes open and candid testimony and respectfully request that you accept the constructive and positive nature that is ultimately intended.
  3. On another note, we should like to compliment the new Minister, the Honourable Jane Stewart, for agreeing to testify before the Committee so early in her mandate. As should be expected, our Brief is critical and we commend the new Minister for her willingness to appear before the Committee jointly with this Union. Thank you Minister.

A Brief History

4. As Senators will likely recall, Bill C-2 received Royal Assent on May 12, 1994 allowing for what we have since labelled a shotgun wedding of Revenue Canada, Customs and Excise, with Revenue Canada, Taxation. Enactment of Bill C-2 came much to the disappointment of CEUDA since we had undertaken an extensive and expensive lobbying campaign in order to build strong opposition against the Bill.

5. Our concerns then were that the role of Customs Inspectors should not be confused nor diluted by allowing the integration of Canada Customs from Revenue Canada, Customs and Excise, with some 30,000 tax administration employees of Revenue Canada, Taxation. Quite obviously, we were extremely troubled about this government's attempt to erode the rich law enforcement tradition of Canada Customs by surrendering legislative authority over Canada Customs to bureaucratic tax administrators with no community of interest or experience in Customs enforcement

6. Senators may also recall that aside from addressing issues surrounding Canada Customs, serious doubtful questions were raised about the announced savings that would be realized from the amalgamation of Revenue Canada, Customs and Excise, with Revenue Canada, Taxation.

Objective

7. Our Brief endeavours to share with you our experiences, observations and findings, given the question of whether or not Revenue Canada's management team has undertaken Administrative Consolidation in keeping with the commitments made by the then Minister of Revenue Canada, the Honourable David Anderson, and the Department's long-standing Deputy Minister, Pierre Gravelle, during their efforts to sell Bill C-2 to Parliament

8. In addition, as our access to information has at times been limited by the Department, you will find this Brief sometimes lacks detail and probably raises more questions than provides answers. Accordingly, we have taken the opportunity to prepare a number of critical questions we wish to bring to your attention and trust you will take interest to raise them with the Minister here this morning. The questions are included as part of this presentation at Appendix A under the title Questions Regarding the Status of Administrative Consolidation at Revenue Canada in Keeping with Previous Govemment Commitments

Questions of Accountability

9. As indicated above, it has now been more than two years since Bill C-2 received Royal Assent; in fact, May 12, 1996 marked the two (2) year anniversary. Without a doubt and with such length of time elapsed, we should expect that implementation of the initiative to be either nearly complete or, at least, well underway.

10. That, however, is not the case, in our opinion, as Administrative Consolidation has been a misadventure in the making without a plan since inception. The government has neither goals, focus nor direction where the nation's tax administration and border protection are concerned. Consider, for example, the frequency of name changes that have plagued this department during the past two years: Revenue Canada, Customs, Excise and Taxation; Revenue Canada; Revenue Canada Agency; and finally Canada Revenue Commission. How much longer will this national institution's identity crisis carry on?

11. Question aside, the motivation that has brought us together here today is founded, more than not, on the issue of accountability. Given the history of the Administrative Consolidation project and our objective here today, the matter begs two questions. First, have the government's commitments, announced during efforts to sell Bill C-2 to Parliament, been honoured and, if so, to what extent? Second, have savings been realized from the shotgun wedding of Revenue Canada, Customs and Excise, with Revenue Canada, Taxation?

Methodology

12. For the record, in preparation for our Brief, we took it upon ourselves to review comments and statements made by the Minister's predecessor, the Honourable David Anderson, as well as the Deputy Minister, Pierre Gravelle, during their appearances before the House of Commons Standing Finance Committee and this Committee, as they sought support for the passage of Bill C-2

13. We proceeded to organize their comments and statements into twenty-two (22) categories and reproduced them in a Report Card. Copies of the Report Card were then distributed to our Customs Members with instructions to assign grades, and a request that they make comments, for each category.

14. Intelligence gathered from the Report Card exercise, together with testimony obtained from Excise/GST Members via conference calls and noted observations about developments that have or have not taken place at Revenue Canada have formed the foundation of this Brief.

Measuring Delivery

15. Unfortunately, and this should not come much as a surprise, our response to whether or not Revenue Canada's management team has successfully delivered on the government's commitments with respect to Administrative Consolidation is not overly positive. In fact, Senators and the government should not find it surprising that our Brief is somewhat negative.

16. No doubt management will offer a different perspective. Nonetheless, Senators will find this Brief attempts to detail the reasons why we have reached our conclusions. Senators should note we intend only to provide general statements and observations about our findings within this Brief and offer to expand on our observations with much more detail during the discussion that should take place on Thursday, May 30, 1996.

Analysis and Findings

Senior Management NOT Cut; No Savings here!

17. The government made a serious commitment to "the reduction of personnel and money expenditures at the top executive level" announcing, for example, that Bill C-2 "simply eliminates one Deputy Minister, or ... it eliminates the two Deputy Ministers, the Deputy Minister of Customs and Excise and the Deputy Minister of Taxation, and replaces them with a single Deputy Minister of National Revenue."

18. As promised, today's Revenue Canada has only one Deputy Minister. However, Revenue Canada now also has an Associate Deputy Minister, in addition to the existing Deputy Minister. As far as we are concerned replacing two Deputy Ministers with a Deputy Minister and an Associate Deputy Minister can hardly be deemed a reduction of personnel at the top executive level. We find absolute discomfort in the fact that at the most senior level, also the most visible level of the Department, the government does not appear to have honoured its commitment to do away with senior executives at Revenue Canada and has, instead, significantly diluted its commitment since appearing before Parliamentary Committees in 1994.

19. The government has not only relaxed its commitment with respect to the positions of Deputy Ministers, we believe the government has neither reduced layers of management since undertaking Administrative Consolidation nor effectively reduced the total count of managers. We find, instead, there has been an elaborate shuffle of offices and positions, which for the most part, lead us to conclude this commitment was made simply to appease concerns of Members of Parliament and Senators that Administrative Consolidation would, in fact, realize savings to the Canadian taxpayer.

20. Consider, for example, the fact that before Administrative Consolidation, a Customs Regional Collector, responsible for managing a Region, would report to the Assistant Deputy Minister (ADM) for Canada Customs at Headquarters in Ottawa; and today the Regional Collector has been replaced by the Regional Director of Customs Border Services who reports to the Regional ADM, while still maintaining an ADM of Customs Border Services at Headquarters. In this example, the reduction seems to have translated more into an increase.

21. Also, on the GST/Excise side of the house, we have witnessed scenarios unfolding whereby a significant number of senior managers have been working outside of their community on an interim or acting basis, provided with accommodation and mileage expenses while on continuous travel status. The managers do not want to relocate; therefore, the Department has been funding their ongoing travel and accommodations expenses. Our belief is that the Department, while struggling with Administrative Consolidation, has lost control of these expenses and we cannot help but wonder why this type of activity is taking place and when such wasteful expenses will be eliminated.

Customs/Excise/GST Subordinated to Taxation

22. The Deputy Minister himself announced in the Spring of 1994 that

"[e]verybody sees the world from the hilltop of his/her own past experience. From my perspective it is of critical importance that I and the Minister be able to rely on top professionals to manage the customs program. That will have to include seasoned customs managers to operate the Customs Border Services Branch.

23. While we concede it appears the government has made attempts to honour this commitment as a number of senior positions within the Department are staffed by seasoned customs managers, we are of the opinion that the law enforcement tradition and history of Canada Customs are, nonetheless, being quickly eroded by the overwhelmingly strong bureaucratic taxation culture that predominates throughout the Department.

24. Without a doubt, we have witnessed a drastic decrease in the status of Canada Customs as a law enforcement institution during the past few years. More and more, Canada Customs is viewed by this government not as a law enforcement body but as a tax collections group. Policies guiding Canada Customs program delivery are not focused on enforcement of the law nor do they recognize the importance of Canada Customs as this country's first line of defence; instead, we find there is an obvious trend to focus program policies toward facilitating an increase of the movement of people and goods across the border.

25. With respect to Excise/GST, we find any semblance of an Excise/GST management presence is non-existent. Managers from Excise/GST have, more than not, been replaced by Team Leaders in keeping with the Team Leader concept from taxation. Excise/GST managers that have not been replaced are more or less ignored, advised that matters are simply dealt with according to the taxation standard.

26. On another yet similar note, the government, we are all aware, recently announced plans to convert Revenue Canada into a Commission, which would administer federal and provincial taxes jointly. If Canada Customs were viewed as the law enforcement body it is, there would be no place for it under the new Canada Revenue Commission. Instead, we learn the government is making every possible effort to win support for its intention to include Canada Customs in the Commission.

Customs Operations NOT Maintained

27. The government promised that "administrative consolidation will in no way compromise Customs' operations."

28. Customs operations have been severely compromised through the excessive use of student and term staffing practices by this Department. Looking at Revenue Canada's staffing of students, Revenue Canada Taxation has long hired students outside the normal summer season to help administer income tax returns. With Administrative Consolidation, the practice has now spread to Canada Customs. In a June 1987 Memorandum of Understanding signed by representatives from Canada Customs and Treasury Board, Canada Customs obtained authority to employ students year-round at major international airports; however, under Revenue Canada's current management team, the reference to major international airports has been widely interpreted as an example only.

29. This self-serving interpretation has since led the Department to increasingly staff students year-round at most customs ports throughout Canada while significantly reducing staffing of seasoned Customs Inspectors.

30. Considering how students are only trained two (2) weeks (compared to the extensive fourteen (14) week training program received by Customs Inspectors) and that, for the most part, they currently undertake every component of a seasoned Customs Inspector's work, are the health, safety and security risks worth compromising? Is the Department honouring its commitment not to compromise the operations of Canada Customs?

31. In addition, since Administrative Consolidation was made possible two (2) years ago, Revenue Canada has targeted the closure of more than one hundred (100) inland customs offices and we expect an announcement will likely be made about intentions to close customs offices at land border crossings.

32. The then Minister Anderson's famed "stone wall" for illegal substances and materials turned out to be a border crossing card and the assumption that everyone will voluntarily comply with Customs and Revenue laws. Since Administrative Consolidation, the Department has published many statements which have appealed to the media and possibly to the public while, in fact, only creating an open border.

33. Port closures, reduction of hours for seasoned Customs Inspectors, and automated ports are NOT in line with maintaining Customs operations.

Customs Staff Reduced

34. The government clearly announced that C-2 was not meant to reduce staff. Customs staff, however, is being reduced and significantly at that. We have difficulty conceding the case is not related to the fact that Canada Customs is subordinated to the taxation culture prevalent in the Department.

35. Revenue Canada, we have learned in a post-budget briefing session called by senior management, intends to increase full-time equivalents (FTE's) to taxation driven programs by 1100 after having confirmed $100,000,000 of "new"' funds. We have extreme difficulty agreeing with management that gains to the taxation program have not been at the expense of cuts to the Customs program since the Customs program has been targeted for a reduction of 690 FTE's and $40,000,000 by fiscal 1998/99.

This reality, by far, speaks the loudest of any comment we are here to make today; it is a true testimony describing how Revenue Canada, Taxation, will completely erode the administrations of Revenue Canada. Customs and Excise.

Customs Staff NOT Increased

36. The government was proud to remind all that Canada Customs would see an additional 350 FTE's at the front line with an extra $45 million of resources during efforts to sell Bill C-2; what we have come to understand was to be an increase of front line effectives by 25 per cent for the Anti-Smuggling Initiative (ASI). Clearly, there was an increasing need for people at the border to deal with issues such as smuggled drugs, smuggled liquor, prohibited weapons, illegal aliens, and kidnapped children.

37. As hindsight is always 20/20, however, we can honestly comment how unfortunate it is that ASI was such a kneejerk reaction by this government and officials from Revenue Canada. In our opinion, $45 million were wasted due to poor planning; rapid, overnight implementation; and little, if any, input from the field. ASI should be equated to non-repetitive advertisements: one-time hits are rarely effective.

38. Senators may also find it interesting to note that no actual hiring of indeterminate staff truly took place at Revenue Canada following the ASI announcement, while funds have been and continue to be used to cover shortfalls in district budgets.

Excise/GST Operations NOT Maintained

39. Excise/GST operations have also been compromised in the drive to consolidate the former two Department's tax administration. For example, we find the Department often uses GST staff as a pool of human resources to draw from when demand to administer tax programs peaks; GST-related functions are then de-prioritized in the rush to address the increased tax workload.

40. To also resolve sudden short-falls in staffing for GST, when those individuals are called to the tax side of the house, senior management reacts by reducing the quality of service standards for Excise/GST. For example, GST telephone inquiries traditionally held ten (10) calls on a waiting queue but management has, since Administrative Consolidation, reduced to two (2) the number of calls that can wait on the queue. With this adjustment, it becomes extremely difficult to determine how many people actually call as the system does not track callers not on the queue. Management then concludes the number of calls has decreased and justifies shifting resources from Excise/GST to taxation. Not surprising to us is the fact that the number of walk-ins has significantly increased.

Job Opportunities have NOT Improved for Staff

41. The government proudly announced that, following enactment of Bill C-2, job opportunities for Revenue Canada employees would open up and that the Department would suddenly have the tools to enrich jobs, provide better training and to better support the field

42. While the commitment sounded rather exciting at face value, a closer look at the statement reflects really how little the government understood about the difference between the law enforcement culture of Canada Customs and the bureaucratic tax administration culture or Revenue Canada, Taxation. Customs and Taxation are like apples and oranges, as we have been stating. Given the current trend, should we soon expect any additional job opportunities for Customs Inspectors to be extinct?

43. On the Excise/GST side of the house, we concede there has been an improved accessibility for Excise/GST staff to cross over to taxation jobs; but the cross over is again indicative of the predominance of the taxation culture. We've also observed criteria for granting promotions to former Excise/GST employees seems to be measured by standards that have historically been applied for taxation employees. More than anything, we believe what we are witnessing are exercises in cross training with no additional job opportunities being offered nor available. In other words, if a Revenue Canada employee does not have or is not willing to acquire knowledge of the operations and program delivery mechanism that apply to the tax side of the house, that employee may as well resign, retire or look for other career options.

Staff Morale has NOT been Monitored nor Addressed

44. Obviously, the government was aware, in 1994, of the negative impact Administrative Consolidation would have on employees of Revenue Canada, Customs and Excise, as well as those of Revenue Canada, Taxation. In response to questions about impact on staff morale, the government reacted by commenting that the new Department would "monitor carefully the impact of consolidation on staff morale and take steps to deal effectively with any problem."

45. Senators, during the past two (2) years, the issue of employee morale has never been raised nor discussed in any manner, at any forum, or under any context, whatsoever, by this Department. The last official or unofficial mention made about employee morale by this government occurred more than two (2) years ago when Bill C-2 was before you. Has management at Revenue Canada simply turned a blind eye or forgotten about its commitment?

46. To complicate matters even further, the recent provincial-federal tax harmonization announcement that applies to the Atlantic Provinces has greatly fueled the fire of uncertainty and low morale. We cannot help but wonder when the government will finally decide what is in store for this Department and when we can begin to see some light at the end of the tunnel. At this point, we are of the understanding that many of our Members do not even see a faint glimmer of light.

Responsibility of Customs Inspectors NOT Maintained

47. In the words of the then Minister Anderson, speaking before the House of Commons Finance Committee on February 15, 1994 regarding Bill C-2, "this particular piece of legislation is in no way a downgrading of Customs operation or the work of Customs Inspectors."

48. Indeed, the responsibilities of Customs Inspectors have not been downgraded. In fact, new responsibilities have been added. Under the current Revenue Canada management team, Canada Customs has taken on more and will take on more responsibilities for other federal government Departments. Since Bill C-2 received Royal Assent, Canada Customs has assumed new responsibilities on behalf of Citizenship and Immigration, Agriculture and Agri-Food Canada and the Canadian Wheat Board Export Control. In addition, plans are being finalized to add PST collections and firearms registration.

49. While some will claim assigning new work to Canada Customs is an indication of the confidence Revenue Canada management has in the abilities of Customs Inspectors, we suggest spreading already thin resources to greater limits is extremely dangerous as the risk for error grows proportionally, if not exponentially, with every new work requirement that is not supported by additional resources.

Customs Act Review Tabled?

50. Yes, the Customs Act was reviewed; in the summer of 1994. As part of consultation and in keeping with the extremely progressive labour relations of the time, CEUDA was asked to actively participate in the review exercise.

51. Much to our dismay, however, the project seems to have been tabled following Administrative Consolidation. We have heard neither news nor rumour as to the status of the project since submitting a paper on the matter in 1994.

52. We should like to point out, in addition, that Revenue Canada has since commissioned, from Roger Tassé, whom you will recall was once Deputy Minister for the Department of Justice, what has come to be known as a Study on the Powers of Customs Inspectors. While we understand the presentation of a Bill to reform the Customs Act was on hold pending submission of the Tassé Report, the report has now been complete for more than one (1) year and we cannot find any explanation as to why there has been such a lengthy delay.

53. Suffice it to say that we would like to comment further on this matter; however, it will be one (1) year this mid-June since CEUDA filled a request with the Access to Information and Privacy Office of Revenue Canada for a copy of the Tassé Report and, regrettably, we have since encountered every conceivable form of bureaucratic stalling tactic from Revenue Canada's Deputy Minister. We still do not have a copy of the Report and expect within the next few weeks to make application with the federal court for a review of the matter. As Senators will appreciate, this is not the manner in which we envisaged progressive and positive labour relations to unfold with this government.

Authority for Customs Inspectors at the Border NOT Ensured

54. The government noted, before this very Committee, the Customs 2000 objectives: reducing bureaucracy, being more responsive, being client oriented, making sure that the people who work and deliver programs at the field level have sufficient authority to deal satisfactorily with individual taxpayers and business representatives. Those objectives, we were advised, would preside over the Administrative Consolidation of the Revenue Canada.

55. As may become self evident, the problem we envisage with the Customs 2000 objectives is that the objectives stated have everything to do with providing service and responsiveness to the client but are completely devoid of the need for enforcement. A Revenue Canada, which is dominated by a tax administration culture prioritizes facilitation over enforcement.

56. Authority for Customs Inspectors is less sufficient than ever. Consider, for example, the fact that Customs Inspectors continue to be denied the authority to, at a minimum, detain suspected drunk drivers at the border until local police can arrive at the scene. How many more drunk driving deaths will occur before this government assumes its obligation to address this limitation on the powers of Customs Inspectors?

Security for Customs and Excise/GST NOT Ensured

57. The government commented that"the security of our Customs Inspectors at the border is paramount. This is why we have accelerated the investment of $13 million for proper security measures and tools for our Customs Inspectors at the border."

58. On the Customs side of the house, self-defence training is not available nor are batons or pepper spray; while handcuffs have limited distribution on a national basis.

59. In addition, the nearest RCMP or other police detachment is often an hour away, or more, at best.

60. Note that at numerous border crossings, the Department is relying on foreign nationals, such as US customs/immigration/border patrol, to assist Canadian Customs Inspectors who may find themselves in trouble; however, from a front line officer's point of view, the prohibition with respect to firearms has ensured that our neighbours to the south will not assist our Officers.

61. These factors, together with skeleton staffing of seasoned Customs Inspectors and excessive staffing of untrained and unqualified students, security risks are higher than ever before.

62. On the Excise/GST side of the house, while policies have been drafted and do exist, no real tangible action is taken unless an incident has occurred. The Department's position on this matter seems to be very reactive rather than proactive, which in our opinion is rather dangerous when the issue is one of security.

63. We also wonder when the Department will amend its formal policy position and stop claiming security risks do not exist for Excise/GST employees and for Customs Inspectors. The government's granting of bullet proof vests and handcuffs to Customs Inspectors, for example, while publicly espousing policy positions that are contradictory to the practice baffles this Union.

Training of Staff - What Training?

64. The commitments from this government were plentiful during efforts to pass Bill C-2 through Parliament: "proper training," "$45 million in training," and "[we] will ensure that training is carried out

65. In our experience, training has been negligible over the past two (2) years. In fact, it seems to have been put on hold as there no longer seem to be any financial resources. There are no drug identification courses, no immigration updates, no basic training for term employees nor students.

66. In a December 4, 1995 memorandum from the Deputy Minister to other senior Revenue Canada management, all non-essential training was effectively cancelled or deferred. Training scheduled for this past January, for example, was cancelled.

67. In addition, it is important to note that on the taxation side of the house much of the training is undertaken through the team concept. Training is on-going, informal and done with peers. Formal training is seriously lacking, scarce or even non-existent.

Savings NOT Re-invested in Field Offices and/or at the Border

68. Government representatives made many statements as to how savings would be realized from Administrative Consolidation and as to how those very savings would be re-invested in field offices and/or at the border. The following are examples:

[The] hope and ... objective ... of the government is to see a slight increase in program delivery resources, either at the district office level or at the border

Yes we are trying to put people on the front line. That is one of the purposes of flattening.

I simply want to stress that whatever streamlining of a regional presence evolves or materializes in the months to come, it will be based on the following objectives: that is, those people involved in the program delivery in the regional offices should be closely linked to the front line, to the field offices. We want to strengthen the field offices. Hopefully, we will be able to eliminate a lot of overhead by getting rid of administrators.

We do not wish to do anything that will reduce, minimize or jeopardize the effective delivery of our enforcement and other programs at the front line.

69. Yes, field offices have been "strengthened" but strengthened in what sense. Our reading of the above indicates Revenue Canada has strengthened field offices by negotiating additional responsibilities from other federal government Departments and delegating them to Customs Inspectors at field offices with little, if any, additional funding.

70. We remind the Senators that more than one hundred (100) customs inland field offices have been targeted for closure, while we anticipate an announcement to close border field offices is a matter of time away.

71. If there have been any investments made, they have been toward the procurement of expensive technical equipment, which has come at the expense of closed offices, reduced staffing of seasoned Customs Inspectors and increased staffing of terms and students.

NO Re-investments in Technology for Enforcement

72. Primary Automated Lookout System, X-ray Machines and Automatic Licence Plate Readers are some of the technological tools Revenue Canada has procured to aid Customs Inspectors improve detection systems.

73. It would be meaningful to see a cost comparison that compares expenses for maintaining existing staff levels at current ports versus expenses for procuring cameras, card readers, licence plate readers, monitors, telephone and facsimile equipment that would essentially replace staff. We wonder if the equipment has been tested for extreme weather conditions or for longevity. Have maintenance, upkeep and replacement costs been considered and factored into the equation? Will maintenance contractors even provide service to equipment that operates at distant remote ports? How will Revenue Canada measure how much contraband is coming through automated ports?

Legal and Administrative Barriers between Custom, Excise and Taxation NOT Eliminated

74. The government announced that Bill C-2 on Revenue Canada's Administrative Consolidation will eliminate all of the existing legal and administrative barriers which force the government to administer programs through a silo approach rather than through an integrated coordinated approach.

75. In one administrative case that clearly exemplifies limitations related to the intent of this commitment, the government created a single form on which all staff would report their hours worked. Before Administrative Consolidation, Customs Inspectors were required to use two separate forms to report normal day hours worked versus shift and overtime hours worked. Some time after Administrative Consolidation, the Department consolidated the forms and produced a single form. Recently, the Department has announced it is returning to the two form model due to pressure from the field and the inadequacy of the single form for Canada Customs employees.

76. Obviously, there was a lack of consultation with the field and considerable expense was borne by this government to realize an idea in keeping with the Administrative Consolidation model. It seems that because Revenue Canada, Taxation, had successfully operated with a single form, it suddenly made sense to consolidate Revenue Canada, Customs and Excise, forms into a single form, following the Revenue Canada, Taxation, model.

77. We believe the forms example should be viewed as an indication, or better -- a clear and loud warning, of the type of problems we can expect by attempts to rationalize and consolidate Customs and Excise with Taxation without any consideration to the expertise built into the history and tradition each institution has had.

Elimination of Duplication and Overlap NOT Realized

78. The government announced that the true purpose of Bill C-2 was "administrative simplification and streamlining ... attempting to eliminate duplication, overlap, reduce government costs, and in particular reduce the cost of compliance for taxpayers."

79. If the consolidated time sheet is any example about how administrative costs are being reduced, Canadians should be extremely worried for this initiative has had no vision, plan, direction nor was any significant or serious cost analysis undertaken.

NO Re-investments in Enforcement Program Delivery

80. In 1994, the government claimed:

electronic pre-clearance will free up some highly skilled Customs Inspectors who today have to deal mainly with paper on the commercial stream rather than people and travellers. That should eventually enable us to shift the allocation of resources to border enforcement and border protection.

81. While the government's claim sounds somewhat appealing, what has clearly happened during the past two (2) years is not at all in keeping with this statement. Streamlining and savings have been sought and obtained in the form of straight port closures, reduced hours for seasoned Customs Inspectors to afford more increased hours for lower wage students and term employees.

82. As we discussed thus far in this presentation, the government is not at all intent on maintaining or even increasing human resources toward border enforcement.

83. The trend we have witnessed during the past two (2) years is one wholly indicative of a government growing increasingly sympathetic to the use of sophisticated and expensive equipment rather than a government interested to utilize human resources.

Savings to Private Sector Companies - What Savings?

84. Interestingly enough, the government admitted while attempting to pass Bill C-2 through Parliament that "[t]he most important saving is outside with respect to the people we deal with, our customer." The government went further to emphasize there would be "substantial savings for companies that are able to deal with Revenue Canada in all its components in a single, one-window operation."

85. While there is strong appeal to the call that a Canadian company dealing with Revenue Canada should only hold one account number in respect of source deductions, income tax, excise and GST, we believe the savings promised to the private sector are far from being realized.

86. The government's statements in this respect are entirely misleading. There have been no savings; instead, user fees for new practices and procedures are making their way into every Revenue Canada program stream.

Total Savings - What Savings?

87. With respect to total savings, the government stated, in 1994 that:

[t]he direct saving, as we see it, that we can put a figure on is $30 million: $3 million for duplicate position and $3 million for staffing cut-backs; improved technology and use of combined facilities would be $12 million; and, in general, shared training facilities, printing operations, etc., another $12 million. That is the $30 million that we see directly from a $2.4 billion dollar budget -- 40,000 people and some 970 offices across Canada.

88. We question whether these savings have in fact been realized. Our analysis of the Public Accounts reveals the numbers do not entirely match up. Perhaps the Senators could ask the Minister for a complete breakdown of the savings realized to date.

Verification and Audit in Customs Administration

89. The government announced it would "introduce the notion of verification and audit into the Customs universe and Customs administration because if we proceed with electronic clearance of goods at the border we will have to do proper audit and verification of what has been cleared electronically."

90. At this stage we understand the Department is taking steps to introduce the notion of verification and audit in the world of Customs

NO Increases of Law Enforcement at Customs Inland Offices

91. We wonder what Revenue Canada officials were thinking recently when they announced the closure of more than one hundred (100) inland customs offices. Had the government forgotten its statement, two (2) years ago, that ''[t]he shift has been to law enforcement activities in which the Customs Program is now more involved, not only in the detection of drugs at the border but also inland"?

92. While we expect the government to respond that "closures" was not announced for the more than one hundred (100) inland customs offices but that alternate service would instead be offered, we would like to advise the Senators that alternate service is simply rhetoric and a misleading way of stating the obvious.

93. In addition, there has been considerable mounting opposition from local businesses, Chambers of Commerce and City Councils not to close inland Customs ports; however, we find it strange that in this new atmosphere of client-oriented service, local voices have been ignored by the Department in the drive reduce costs.

94. In retrospect, the government has not delivered on this commitment. In fact, the government has done quite the opposite.

NO Increases of Collaborative Work with RCMP at Border

95. The government stated very clearly that "we have to work very closely with all law enforcement agencies - the RCMP - in order to cast a wider net for this particular role of security."

96. This may be happening somewhere, at few remote locations in Canada for example, but certainly not at the border crossings. Many of our Members have advised us that they wouldn't even recognize any of the RCMP constables from their local detachments. Locally, we are advised that telephone communications between the two (2) organizations are also nonexistent. The RCMP has been very reluctant to assist Canada Customs in efforts to deal with export control of illegal grain shipments, for example. The RCMP simply will not get involved for whatever reason. There is definitely no coordination of enforcement activities with the RCMP at the border.

Conclusion

97. Senators, we thank you for your interest in this matter. We realize our Brief was lengthy but trust you found it informative, at the very least.

98. We should like to close by commenting on one last statement made by the then Minister Anderson during his opening statement before the House of Commons Finance Committee on this very matter. The Minister said, "I think that some of the customs union people will find their present concerns disappearing over a year or two of experience with this government, and hopefully with me as Minister.

99. Regrettably, as you have read, our concerns have not at all been alleviated. In fact, we seem to be left with an even bitter taste now that more poison pills have been added to the stew.

100. On that note and given that Revenue Canada has a new Minister, we take this opportunity to strongly encourage the new Minister to take heed of the concerns we have raised in this Brief. Further, the Minister should be advised that we are fully prepared to work with her and Revenue Canada officials not only to continue improving labour relations between CEUDA and Revenue Canada but also to help pave the road toward realizing the commitments made by her government with respect to Revenue Canada's Administrative Consolidation more than two (2) years ago.

101. We again remind Senators to note we have prepared and attached, as an Appendix to this Brief, a number of questions we feel the Senators may wish to ask the Minister following her statement on Thursday, May 30, 1996.

102. Once again, thank you for the opportunity to submit this Brief.


Appendix A:

Questions Regarding the Status of Administrative Consolidation at Revenue Canada in Keeping with Previous Government Commitments

  1. With the marriage of Excise/GST and Custom with Taxation, what savings has the Department realized by cutting senior management?
  2. Which senior positions have been eliminated?
  3. How has the ratio of Excise/GST: Customs: Taxation managers changed since 1994?
  4. To what extent has the government endeavoured to maintain the operations of Excise/GST and Customs, as compared to the efforts dedicated toward Taxation?
  5. What are current and forecast staffing levels for Excise/GST, Customs and Taxation?
  6. To what extent have job opportunities been improved for Excise/GST and Customs employees?
  7. Why has the Department completely avoided monitoring employee morale and what steps, if any will be taken to address the Union's observed low employee morale? When?
  8. To what extent have the responsibilities of Excise/GST and Customs not been downgraded or subordinated to Taxation?
  9. What investments has the Department made toward improving the security of Excise/GST and Customs employees? What current measures are underway and when can results be expected?
  10. How much has the Department dedicated toward employee training and when will training be re-instigated?
  11. What savings have been re-invested in field offices? How? When? Where?
  12. What savings have been re-invested in technology? What technology? When?
  13. Which legal barriers have been eliminated between Excise/GST, Customs and Taxation?
  14. Where has duplication and overlap been eliminated?
  15. What savings have been passed on to private sector companies?
  16. Has Revenue Canada, in fact, saved any money? What funds can we expect the Department to save in the future?
  17. Have maintenance cost assessments been undertaken with respect to new technological equipment targeted to replace human resources?
  18. What is the status of the Customs Act Review?
  19. Will the Minister release the Tassé Report to the Union in spirit of consultation? Under what conditions, if any?
  20. What is the status of the Department's relationship with RCMP?
  21. Will the government admit that it sees Customs only as administrative revenue generating group and not as a enforcement group?

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