THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, April 30, 2024
The Standing Senate Committee on National Finance met with videoconference this day at 9 a.m. [ET] for the consideration of the Main Estimates for the fiscal year ending March 31, 2025, with the exception of Library of Parliament Vote 1.
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: Good morning, honourable senators. I have a few details to share this morning about the new earpiece system.
I would like to remind all senators and other meeting participants of the following important preventative measures that were recently adopted.
To prevent disruptive — and potentially harmful — audio feedback incidents during our meeting that could cause injuries, we remind all in-person participants to keep their earpieces away from all microphones at all times.
As indicated in the communiqué from the Speaker to all senators on Monday, April 29, the following measures have been taken to help prevent audio feedback incidents: All earpieces have been replaced by a model which greatly reduces the probability of audio feedback. The new earpieces are black in colour, whereas the former earpieces were grey. Please only use a black approved earpiece.
By default, all unused earpieces will be unplugged at the start of a meeting.
When you’re not using your earpiece, please place it face down, in the middle of the round sticker that you see in front of you on the table, where indicated. Please consult the card on the table for guidelines to prevent audio feedback incidents.
Please ensure that you are seated in a manner that increases the distance between microphones. Participants must only plug in their earpieces to the microphone console located directly in front of them.
These measures are in place so that we can conduct our business without interruption and protect the health and safety of all participants, including the interpreters.
Thank you all for your co-operation.
Once again, I wish to welcome all of the senators as well as the viewers across the country who are watching us on sencanada.ca. My name is Claude Carignan, senator from Quebec, and chair of the Standing Senate Committee on National Finance. Now, I would like to ask my colleagues to introduce themselves starting from my left, please.
Senator Gignac: Good morning, everyone. Clément Gignac from Quebec.
[English]
Senator Loffreda: Welcome. I am Tony Loffreda from Montreal, Quebec.
[Translation]
Senator Galvez: Rosa Galvez from Quebec.
[English]
Senator Pate: I’m Kim Pate. I live here in the unceded, unsurrendered territory of the Algonquin Anishinaabeg.
Senator Ross: Krista Ross, senator from New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Smith: Larry Smith, Quebec.
[Translation]
The Chair: Thank you, esteemed colleagues. Today, we will resume our study on the Main Estimates for the fiscal year ending March 31, 2025, which was referred to this committee on March 19, 2024, by the Senate of Canada.
We are pleased to welcome with us today senior officials from Innovation, Science and Economic Development Canada; Canada Revenue Agency; and the Department of Finance. I understand that one official from each department will make statements and the others will help answer questions, as needed.
It is my pleasure to present Karine Paré, director general and deputy chief financial officer, Innovation, Science and Economic Development Canada; Hugo Pagé, chief financial officer and assistant commissioner, Finance and Administration Branch, Canada Revenue Agency; and Christopher Veilleux, chief financial officer, Department of Finance, therefore head of finance. It’s April 30, and we don’t have our chequebooks with us, but we still have time to mail our cheques out.
Welcome, and thank you for accepting our invitation to appear before the Standing Senate Committee on National Finance. You may now begin your opening remarks.
Karine Paré, Director General and Deputy Chief Financial Officer, Innovation, Science and Economic Development Canada: Thank you. Mr. Chair, honourable senators and committee members, I’m pleased to have this opportunity to appear before you to discuss the 2024-25 Main Estimates for Innovation, Science and Economic Development Canada, or ISED.
I would like to begin by clearly stating that I am speaking to you from the unceded traditional territory of the Anishinabe Algonquin people, and I honour their profound connection to this land.
First, let me introduce myself. I’m Karine Paré, director general and deputy chief financial officer at ISED. Joining me today are Mark Schaan, senior assistant deputy minister, Strategic and Innovation Policy Sector; Stephanie Tanton, assistant deputy minister, Strategic Innovation Fund; and Jean‑Philippe Lapointe, director general, Strategic Innovation Fund.
I’m pleased to be here today to present an overview of the authorities requested in the 2024-25 Main Estimates as we prepare for another dynamic year.
[English]
In the year ahead, our focus at Innovation, Science and Economic Development Canada, or ISED, remains clear: to solidify Canada’s standing as a global innovation leader while fostering competitive, sustainable and inclusive growth. Building our nation’s remarkable economic growth within the G7, we’re committed to continuing our efforts in bolstering the Canadian economy.
Through strategic initiatives, we’ll invest in clean technologies, enhance manufacturing competitiveness and establish Canada as a leader in battery manufacturing while continuing to support rural and remote communities, growing the tourism sector and helping Canadian businesses — small and large — to prosper in a knowledge-based economy.
[Translation]
Our commitment to driving innovation and improving the well-being of Canadians remains unwavering. We will support research and innovation in science and technology, provide essential scientific advice and support collaborative programs to foster progress and prosperity.
As its core, our strategy is to create a level playing field and leverage Canada’s strengths to foster sustained economic growth and sustainable innovation. Together with our federal partners, we’re ready to meet the challenges and opportunities that lie ahead.
[English]
Through these estimates, ISED has requested $6.1 billion in total authorities, of which 85% is in grants and contributions to support projects delivered through 45 programs. The amount sought in the 2024-25 Main Estimates represents a net increase of $283.2 million or 5% compared to last year’s Main Estimates primarily attributable to new priorities that were announced in the previous federal budget.
[Translation]
With this funding, ISED will continue to strengthen Canada’s position as a world leader in innovation and stimulate long-term prosperity for Canadians, while ensuring that resources are allocated to the priorities that matter most to Canadians.
New funding in the authorities requested by ISED this year includes $236.8 million for contributions to electric vehicle, or EV, battery manufacturers. As part of Canada’s transition to a net zero economy, ISED has entered into special agreements with industrial partners to increase Canadian production of lithium batteries and improve the country’s position as an EV manufacturer.
To support these efforts, $20 million are earmarked this year to implement a new Canadian critical minerals strategy. Through the Strategic Innovation Fund, or SIF, the program will invest in projects that prioritize the manufacturing, processing and recycling of critical minerals.
In addition, $20 million will be invested through the SIF to assess and support future opportunities for the Canadian semiconductor industry. Semiconductors are critical to Canada’s national security, economy and technological interests.
[English]
As you are aware, the government has embarked on a significant initiative to reduce spending in line with the objectives outlined in Budget 2023. Under the Refocusing Government Spending initiative, ISED has been tasked with achieving substantial spending reduction targets. Specifically, for the fiscal year-end, we are committed to saving $141 million, as well as $158.1 million in 2025-26 and $313.7 million from 2026-27 onward. Furthermore, in the fiscal year 2024-25, an additional reduction of $191.3 million from the Canada Digital Adoption Program and the Global Innovation Clusters was implemented. These reductions are part of the Budget 2023 realignment as well as the Fall Economic Statement.
[Translation]
In closing, I’d like to reaffirm ISED’s commitment to maintaining strict internal controls to ensure sound management of the funds entrusted to us. We will continue to work with the government to further fiscal prudence and accountability, while continuing to support Canadians by creating more growth and opportunity.
Mr. Chair, I’d like to thank the committee for the opportunity to meet with you today. My colleagues and I will be happy to answer any questions you may have.
The Chair: Thank you, Ms. Paré. We will now go to Hugo Pagé.
Hugo Pagé, Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency: Good morning. Thank you, Mr. Chair, for the opportunity to appear before the committee to present the Canada Revenue Agency, or CRA, Main Estimates for 2024-25 and to answer any questions that you may have on the associated funding.
As you are aware, the CRA is responsible for the administration of federal and certain provincial and territorial tax programs, as well as the delivery of a number of benefit payment programs.
Each year, the agency collects hundreds of billions of dollars of tax revenue for the governments of Canada, and distributes timely and accurate benefit payments to millions of Canadians.
In order to fulfill its mandate in 2024-25, the CRA is seeking a total of $17.6 billion through these Main Estimates.
Of this amount, $4.7 billion requires approval by Parliament, whereas the remaining $12.9 billion represents statutory forecasts that are already approved under separate legislation.
These 2024-25 Main Estimates represent a net increase of $2.7 billion when compared with the 2023-24 Main Estimates. Of this amount, $2.6 billion is related to statutory forecasts for fuel charge proceeds to be returned to the province or territory of origin, primarily through the Canada Carbon Rebate, or CCR. The balance of some $130 million represents an increase of 2% from the 2023-24 Main Estimates.
A large component of this increase, $410 million, is due to funding received to address collective bargaining adjustments.
[English]
This increase of $410 million is partially offset by the following: a $98-million reduction related to the sunsetting of funding to address the post-pandemic sustainability of the Canada Revenue Agency, or CRA, contact centres — the funding was received for a two-year period and was used to help alleviate call volume and call handle time pressures; a $66‑million decrease for the Refocusing Government Spending measures announced in Budget 2023 — the CRA will achieve these reductions through general efficiencies in spending related to its programs and operations; a $50-million reduction in statutory contributions to employee benefit plans; a $23‑million reduction in funding for the administration of pandemic measures, such as the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Hardest-Hit Business Recovery Program; and, finally, a $19-million decrease in the CRA’s statutory forecast of cost recovery revenues for initiatives administered on behalf of the provinces and other government departments, with the majority of this decrease attributable to the administration of COVID-19 measures on behalf of Employment and Social Development Canada.
[Translation]
It should be noted that the CRA’s 2024-25 Main Estimates do not reflect incremental resources for the announcements made by the Minister of Finance in the April 2024 Budget.
In closing, the Canada Revenue Agency is committed to contributing to the economic and social well-being of Canadians by providing a secure, intuitive and client-centric service experience.
The resources being requested through these estimates will allow the agency to continue to deliver on its mandate. Ensuring a fair tax and benefit system that addresses non-compliance remains a top priority, as is making sure that Canadians have ready access to the information they need about taxes or the benefits and credits they qualify for.
Mr. Chair, we will be pleased to respond to any questions you may have.
The Chair: Thank you. We will now continue with Christopher Veilleux from the Department of Finance.
Christopher Veilleux, Chief Financial Officer, Department of Finance: Good morning, Mr. Chair and honourable senators. Thank you for the opportunity to present the 2024-25 Main Estimates on behalf of the Department of Finance.
I would like to begin by acknowledging that I am speaking to you from the traditional, unceded territory of the Anishinabe Algonquin peoples. Joining me today are other departmental officials to assist in providing a more in-depth perspective on the rationale and policies supporting the numbers within these estimates.
[English]
Allow me to introduce my colleagues: Alison McDermott, Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch; Evelyn Dancey, Assistant Deputy Minister, Fiscal Policy Branch; Julie Turcotte, Assistant Deputy Minister, Economic Policy Branch; and Greg Reade, Assistant Deputy Minister, Crown Investment and Asset Management Branch.
As you know, the department supports the Deputy Prime Minister and Minister of Finance by developing policies and providing advice to the government with the goal of creating a healthy and resilient economy for all Canadians.
The 2024-25 Main Estimates outline a total budgetary requirement of $143.1 billion for the Department of Finance. Of this amount, 99% or $142.9 billion pertains to statutory items already approved by Parliament through enabling legislation. There is a net increase of $14.1 billion in budgetary statutory payments in 2024-25 compared to the 2023-24 Main Estimates.
This increase is primarily attributable to the following items: a $9-billion increase in interest on unmatured debt, reflecting the increased level of debt as well as higher interest rate expectations on market debt, as noted in the 2024 Fall Economic Statement; a $2.7-billion or 5.4% increase in the Canada Health Transfer, surpassing the federally guaranteed 5% increase stipulated in the February 2023 10-year health care package; a $1.3-billion increase in fiscal equalization payments, mirroring the 5.4% GDP-based escalator applied to the 2023-24 level — these payments evolve annually based on a three-year moving average of nominal GDP growth; a $532.8-million increase in payments to the Canada Infrastructure Bank to facilitate approved activities outlined in their 2022-23 to 2026-27 corporate plan; a $492.5‑million increase in the Canada Social Transfer, aligning with the legislatively mandated 3% annual growth in funding; a $324.5‑million increase in territorial financing reflective of the integration of new and updated data for territorial expenditure requirements and revenue capacities into the program’s legislated formula; and, finally, the voted program expenditures of $145.2 million that covers the day-to-day operations of the Department of Finance and includes salaries and goods and services.
The 2024-25 Main Estimates reflect a net increase of $16.7 million in voted budgetary expenditures since the 2023-24 Main Estimates. This is primarily attributable to funding for the contribution to the Indigenous Participant Funding Program and an increase in compensation for negotiated salary adjustments.
This concludes my overview of these estimates for the Department of Finance. My colleagues and I stand ready to address any questions the committee members may have.
[Translation]
The Chair: Thank you, Mr. Veilleux. We will now begin the question period. I remind senators that you have about five minutes each for the first round and, time permitting, three minutes each for the second round.
[English]
Senator Marshall: Thank you to all the witnesses for being here. I have one question for the Department of Finance before I move to the Department of Innovation, Science and Economic Development.
For the Department of Finance, I was looking at your Debt Management Report for 2022-23, which was released just before Christmas. I noticed that in Annex 1, it reports on the completed treasury evaluation reports. When I looked at the dates of all the various reports, it starts out in 1992, and, on a very regular basis, there were reports and evaluations done, but the last one was in 2015. That’s being reported in the report. Since the debt has doubled since 2015, there are no evaluation reports or evaluations being carried out. Could you clarify that? Have there been none carried out, or have they been carried out and not reported?
Mr. Veilleux: No one is here from the Debt Management Branch, but we can return with a written response, Senator Marshall. We don’t have that here.
Senator Marshall: I’m going to go to the Department of Innovation, Science and Economic Development now. You were talking about the dynamic year. We use the information on the Departmental Plans and the Departmental Results Reports, but the data for your 2024-25 Departmental Plan is not on the government website yet, and we need that data. You’re not alone. I think there are four or five other organizations, but you’re the only department. I’m just wondering where that data is. Is it being held up for a specific reason, or is it just an oversight?
Ms. Paré: May I ask a clarification question? Are you referring to the Departmental Plan itself or the evaluation of programs — the data that we’re measuring?
Senator Marshall: The data is on the Open Canada website, so we download the data.
Ms. Paré: On performance?
Senator Marshall: We run certain programs on it. Your data is not there. I think the Privy Council Office is also keeping you company. I would like to have that data. It’s holding us up.
My next question is regarding Budget 2024. I’m thinking specifically of Chapter 4, but I’m sure there’s something in other chapters for you too. How much will your estimates increase this year as a result of Budget 2024? Have you calculated that?
Ms. Paré: Thank you for the question. The Main Estimates for 2024-25 do not include the budget items that were announced, so we have not calculated the overall increase. They will be reflected in the Main Estimates for next year. They’re not included right now. I can tell you how much it increased from 2023-24 to this fiscal year, if you’re interested in that.
Senator Marshall: Well, I am. I’m specifically interested in this year, which is 2024-25, especially because Chapter 4 has a substantial amount of funding earmarked for — it looks to be — your department. I’d like to know how much is there.
That leads to my next question. When I look at your Main Estimates document, I see that there is a significant increase in contributions for things like the Strategic Innovation Fund and the Canada Foundation for Innovation. Have any evaluations been carried out on any of those programs? Several of them have been in existence for a number of years, and the funding keeps increasing. What kind of evaluation is being done to make sure that you’re achieving what you’re supposed to be achieving?
Mark Schaan, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Innovation, Science and Economic Development Canada: ISED ensures that all of our programs go through a regular audit and evaluation cycle. Programs are often required — as a function of either renewal or continuity — to receive audits. The Strategic Innovation Fund has — amongst others — also been one of the subjects of reviews by the Office of the Auditor General as well as part of their audit cycle. All our major programs and initiatives have either been audited by our own Audit and Evaluation Branch or by the Office of the Auditor General.
Senator Marshall: The Auditor General has conducted audits. That would be public.
Mr. Schaan: That’s correct.
Senator Marshall: What about your own audits and evaluations? Are they available on your website?
Mr. Schaan: The Audit and Evaluation Branch does publish audits as well as the departmental response to those audits in terms of how we’re actually moving on an action plan.
Senator Marshall: Are they on your website?
Mr. Schaan: I believe they are, yes.
Senator Marshall: Could you send the clerk the link to the reports because I couldn’t find them?
[Translation]
Senator Gignac: My question is for the representatives of Innovation, Science and Economic Development Canada.
You’re asking for $6 billion in budget spending. A significant amount was allocated to the Strategic Innovation Fund, as $8 billion has been distributed to 117 projects since the program’s inception.
Canada doesn’t rank very high among G7 countries when it comes innovation — we actually come last. According to the Global Innovation Index, in 2003 Canada ranked 15th, just above Estonia. The Strategic Innovation Fund is new; how will this fund enable Canada to move into the top 10? What will be done differently? Canada has great research centres and universities, but we’re underperforming when it comes to innovation. My question is quite broad. I want to establish a connection with the Strategic Innovation Fund. We spent $8 billion on it over the past two years.
Mr. Schaan: Thank you for the question. Clearly, Canada must have an industrial strategy to increase and improve our global position in the economy because of the factors you mentioned.
We have an industrial strategy that includes elements of the [Technical difficulty—Editor] with the greening of the economy, along with enhancing the digital economy. We need to ensure that the economy is sustainable because of the pandemic factor.
Regarding what’s being done differently, the results come with concerns; I agree with those concerns. For at least four decades, Canada has performed with certain shortcomings, such as in the area of patents, innovative performance and the increase in the number of large companies.
We’ve adopted a few strategies. It’s not just about turning the page to better position Canada for economic improvement; it’s also about partnering with business to increase and adapt strategies for growth at scale. At the same time, we need to foster greater co-operation between researchers, academia and business through programs like the global innovation clusters.
With the 2024 budget, we could adopt a major strategy to maintain our position in artificial intelligence. In those fields, we also need to make different kinds of efforts to change rankings and adopt a leadership position on the global economy.
I agree with you that it’s important for Canada to continue to address these concerns.
Senator Gignac: There’s an ecosystem for sure.
My second question is for the CRA. I’d like you to tell us about the dispute between the federal government and Saskatchewan over collecting the carbon tax.
Yesterday, I believe I heard that there would be an audit and the CRA would make a statement. If the Saskatchewan government no longer collects the carbon tax, what will you do? The issue will undoubtedly go to the courts. Will Saskatchewan residents be penalized or will they get the rebate? Also, what is an audit?
Mr. Pagé: Unfortunately, we don’t discuss specific cases or taxpayers’ cases in detail. However, what I can say is that based on the Greenhouse Gas Pollution Pricing Act, the agency has the tools at its disposal to establish the need for an audit, and the law also provides for penalties.
What I would say in relation to your last question, in terms of the carbon rebate payments, is that there should be no impact on residents of the province.
Senator Gignac: But an audit is going to be done. Yesterday, it was announced that the Canada Revenue —
Mr. Pagé: That information was published in the newspapers but, to my knowledge, it hasn’t yet been made public.
[English]
Senator Smith: Let’s continue with the CRA, specifically Mr. Pagé. One of the agency’s performance indicators is related to the percentage of Canadians who participate in the income tax system. The target is set at least at 93%, and you have achieved that goal in 2022 and 2023. I would like to ask about the other 7% of Canadians who do not participate in the income tax system. I believe the CRA has abandoned the planned automatic tax filing program.
Could you please first explain why the agency decided not to roll out the automatic tax filing program, and instead opted to expand to the use of the phone tax filing system?
Mr. Pagé: Certainly. As you know, the agency is putting a lot of effort into reaching those individuals who are not filing taxes. People are not filing taxes for various reasons, and we know that — for some — not filing taxes means they also are not entitled to certain benefits.
As you may have seen in Budget 2024, the agency did receive funding to help advance some of the auto-filing initiatives. We have received funding and are working toward increasing the number of individuals who can auto-file their returns by phone. With that funding, we are also exploring pilot projects to help us look at ways to do that electronically for online filing as well.
Senator Smith: Critics of the phone tax filing system note that it’s the taxpayer who must be the initiator of the filing process, and that defeats the purpose, especially for Canadians who are unable to do so in the first place. Is there a plan to go back to the automatic tax filing system in the future?
Mr. Pagé: The agency has been proactively reaching out to a lot of individuals, sending out letters and asking them to file their returns. With respect to the second part of your question, I would go back to my earlier answer: As part of the funding we receive through the budget, there is a pilot project that we are looking at implementing in order to help auto-file electronically.
Senator Smith: Is the plan to try to increase the number of people or percentage of Canadians who participate in the income tax system moving forward?
Mr. Pagé: Yes, absolutely. The objective that was set — I think in Budget 2023 — was to reach at least 2 million Canadians who are currently not filing their taxes, or to use the SimpleFile system.
Senator Smith: Thank you.
Senator MacAdam: My question is to the CRA. As announced in Budget 2024, starting in 2026, Canada will implement the Crypto-Asset Reporting Framework, or CARF, developed by the Organisation for Economic Co-operation and Development, or OECD, and it’s to require crypto-asset service providers located in Canada — or who do business in Canada — to begin annual reporting to the CRA. It’s being implemented to deter tax evasion and avoidance. Do you have current projections on the tax laws for Canadians dealing in crypto-currencies?
Cathy Hawara, Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency: Thank you for the question. I don’t believe we have data on tax loss — if I heard you correctly — associated specifically with crypto-currency, but the agency has been quite focused on this particular area of the digital economy. We have set up specific crypto-asset compliance programs, so we are standing up teams. We’ve got centres of expertise to assist our auditors and other officers across the agency who come across crypto-assets. The CARF is going to be critically important for us, and this is a positive step forward in terms of the agency having access to transactional data and data about Canadians who are participating in these kinds of transactions.
We have done some public opinion research to better understand who is engaging in these kinds of transactions, what their levels of awareness are regarding their obligations and where they turn to for reliable information about their tax obligations. We’re taking a multi-faceted approach. We recognize that part of the answer is making sure that taxpayers understand that if they are engaged in these kinds of transactions, there could be a tax liability, whether it’s a capital gain that must be reported or business income.
We have been engaged in significant communication activities to reach those individuals. We are also leveraging data that we obtained through an unnamed persons requirement in relation to a particular crypto-exchange, and we’re starting to contact Canadian individuals who — we believe — engaged in transactions and didn’t report the income on their returns in order to encourage them to do so, all the way to leveraging our audit capacity where it is most appropriate in the highest-risk cases. This is an area that we are monitoring closely, and we are also starting to get ready for the implementation of the CARF, which will require the agency to receive the information and then share it with international partners.
Senator MacAdam: In sharing it with the public, will there be information posted on your website about the status of how the framework is progressing and the work that’s being done?
Ms. Hawara: We are certainly looking for more opportunities to talk publicly about the work the agency is doing. The data that will be received by the agency will be protected taxpayer information, so that — in and of itself — will not be released publicly, but we certainly have pages on our website that detail the activities of the agency and some of the results we achieve, and that can certainly be an area where we provide more information to Canadians.
Senator MacAdam: I have another question for the CRA: Budget 2024 proposed additional funding priorities for the CRA, including $336 million over two years, starting in 2024-25, to maintain call centre resources and improve the efficiency of all these call centres. What’s the plan to improve the efficiency of the call centres? How do you propose to do that?
Mr. Pagé: I’ll invite my colleague Gillian Pranke to talk to you about the call centres.
Gillian Pranke, Assistant Commissioner, Assessment, Benefit and Service Branch, Canada Revenue Agency: Thank you for the question. With regard to the plans of the Canada Revenue Agency for leveraging the funding that was announced in Budget 2024 to improve contact centre efficiency, there are a number of components. First and foremost, we’re looking at the telephony platform that directs calls across the national network. We have launched a pilot leveraging generative AI, and we’re looking to further expand the use of generative AI technology.
With our current platform, we were able to make some technological advances, but not as far as we would have liked. I think we see this when we look at contact centre wait times and so on. We’re looking to be able to better leverage the technology that’s available so that we can have citizens start on the website and then seamlessly move into being served either online through an online chat — in a secure space — or be directed to an agent.
We know the research shows that about 80% of individuals go to our website before they contact us, so we’re looking to leverage that entry point to better serve citizens.
Senator MacAdam: Do you have targets established in terms of whether you will be able to declare that efficiency has improved, whether it’s wait times or people engaging on the website? How will you know that you’ve been successful in improving efficiency?
Ms. Pranke: Thank you for the question. We are currently working on further streamlining our projections based on the funding that was allocated to the Canada Revenue Agency from Budget 2024, so we’re still working through that. We will be very precise as far as what we believe we can achieve.
The challenge that the Canada Revenue Agency has had over the last few years since the pandemic — quite frankly — is that many government programs have been launched, and citizens have continued to rely on the fact that they can contact the Canada Revenue Agency and obtain the information that they are seeking. Despite our efforts to try to enhance our websites, there is still a desire to speak to a human being on the other end of the call. That really has been our challenge. A tremendous amount of volume has continued to be driven to the contact centre. We have seen that with the interim Canada Dental Benefit that we have managed, and also the one-time top-up to the Canada Housing Benefit. Quite frankly, that continues to be a challenge for us, so we are working with our partners to see if we can try to temper that and find other ways to respond to questions from citizens.
The Chair: Thank you.
Senator Pate: Thank you to our witnesses for being here. I would like to follow up on Senator Smith’s and Senator MacAdam’s questions. Could you please elaborate on the concrete ways in which the pilot project is expected to increase access for those eligible for income supports but who do not file taxes? What particular steps are being taken to ensure that those in the deepest poverty and most in need of support — particularly those who do not have a fixed address or reliable access to a phone or the internet — are aware of and use these programs, in addition to what you have said?
Also, concretely following up, could you provide estimated data as to the number of people in total and the number of people with low incomes, in particular, who currently do not file taxes which these two new services are expected to reach this year?
Ms. Pranke: Thank you very much for the question. I apologize that I missed the very first part of your question. I was looking to my colleague and thinking that we were going to switch seats. When you said “these services,” just to confirm, are you referring to the SimpleFile by Phone service?
Senator Pate: Yes.
Ms. Pranke: Thank you very much for the question. The Canada Revenue Agency has been seized for a number of years now with looking to do more to support individuals in the vulnerable sector. It has been four years now — we have had the Community Volunteer Income Tax Program. It’s been in place for years. We’re now into our fourth year where we are offering a grant to our community partners across the country to help support them as they deliver free tax support and services to citizens.
There are over 800,000 individuals who have been supported through this program in the last year. We continue to offer support through that program. These are clinics that are located across the country.
We have made significant inroads in the last two years leveraging our business intelligence data to look at pockets where we have lower volumes of citizens filing, and we actually are targeting the creation of clinics in those specific geographical areas across the country. We have made some very good progress in that regard, and working more closely with community partners and with our colleagues at Employment and Social Development Canada and Service Canada to leverage the capacity that they have on the ground to reach out to more organizations. You will see more partnerships with food banks, et cetera, across the country, trying to assist individuals in that space.
My colleague Hugo Pagé made reference to a pilot project that we have run. It was announced as part of Budget 2024. We are going into the second year of the pilot project this summer. What we’re doing there is working with the provinces and territories, and we’re looking at individuals who were in receipt of some kind of federal-territorial benefit program but who are not filing an income tax return, and our results so far are quite promising. This summer, we will have all the provinces and territories on board, where we’re working with social service ministries to be able to get at those individuals.
Regarding your last point, senator, about how we’re reaching individuals who are not in the system, of course that’s a more challenging demographic to be able to tackle. It’s something that we are taking seriously, and we are working with community partners across the country in that regard.
Senator Pate: Great. If you could provide more detail in writing to us, or point us to where that may be on the website in case we’ve missed it, I would be happy to receive that.
The department also took an innovative approach with respect to the delivery of the Canada child benefit by introducing the T1S-D, Credit and Benefit Return to facilitate delivery of the Canada child benefit to Indigenous households living on-reserve who are not required to file tax returns. I’m interested in whether you can share specific data with respect to the impact this has had on access to the Canada child benefit for First Nations living on-reserve. Are there best practices you have identified through that process that might be useful for us to hear about, as well as any feedback from First Nations communities on the way this is assisting on the ground in the community?
Ms. Pranke: Thank you for the question. I’m not sure if I have time to respond to that now, but I would be happy to provide you with that information.
Senator Pate: In terms of tax fairness, the CRA’s 2024-25 Departmental Plan refers to the goal of promoting a fair tax system, and makes a commitment to improve the CRA’s ability to use tax gap research and support data-driven decision making. I’m very curious as to what concrete steps will be taken to use this research and data to ensure that those profiting from tax avoidance and evasion on the largest scale are being effectively prioritized for tax enforcement.
Again, if time doesn’t permit or you don’t have access to it now, you could provide detailed information to us in writing.
Mr. Pagé: I can start by talking about the tax gap report, and then transfer it over to my colleague Ms. Hawara to talk more about the compliance effort.
When we were here in April, we talked to you about the tax gap report that was published for 2022. We’re going to be publishing another one in 2025, and the intention is to do this every three years. This is in line with the bill that actually came from the Senate, so we are working toward that.
Ms. Hawara: Thank you for the question. The tax gap research that the agency has done has been very helpful for us from a compliance perspective at the macro level, if I can put it in those terms — sort of as an indicator of our ultimate objective of ensuring compliance with tax obligations.
It’s helpful to validate that our approach to compliance is working. It gives us an overall insight into the health of the tax system, and it helps us to validate some of the areas of focus for our audit programs — making sure that we’re targeting the highest risks.
When we look at the 2022 overall tax gap report, first of all, at a high level, we are pleased to see the impact that our collections and compliance activities are having. The report talks about how we know what the gross tax gap is and what the net tax gap is after our compliance and collections activities have taken place, and the impact of those activities is increasing in a positive way over time. We are pleased to see that. It validates some of the areas in which we are deploying some resources.
On the personal income tax gap side, we know that the underground economy and the offshore and non-compliance continue to be significant contributors, and we have specialized resources that are focused on both of those areas.
The corporate income tax gap gives us some interesting information about how much small businesses versus large businesses are contributing to the tax gap on the corporate side, and it informs our approach. On the small business side, we do have a range of supports that are available, from helping businesses understand what their obligations are all the way to audits. On the large business front in Canada, the CRA risk-assesses 100% of all large businesses in Canada — the threshold is $250 million and above — again, to make sure that we’re targeting the highest risk.
Senator Pate: If you could provide more detail in writing as to how much you are actually collecting.
Ms. Hawara: We will, yes.
Senator Galvez: I have two questions for ISED. You are requesting an increase in your budget for the Strategic Innovation Fund, which is supposed to give support to large-scale, transformative and collaborative projects across all sectors. I think it’s in view of the greening of the economy that you mentioned.
Given that we are talking about the whole-of-government approach, and given that several pieces of legislation to protect the environment have been passed in the last year — regarding the net-zero economy and the carbon tax, and we have signed treaties for plastic pollution, for biodiversity laws and all of this — what are the key performance indicators in order for you to choose which project you will fund? How do you ensure that you have targets and goals?
Mr. Schaan: I’m happy to start, and then I will ask my colleagues from the Strategic Innovation Fund to join us.
The macro framework for evaluating the movement toward the net-zero economy is shared across the government, and has a number of important elements to ensure that all those departments — Environment and Climate Change Canada, Natural Resources Canada, ISED, and Employment and Social Development Canada in some cases as it relates to skills training — are looking at initiatives that are moving Canada in line with our climate goals.
There are a number of key elements related to greenhouse gas emission reductions that have been built into all of our programs to ensure that we are assuring there are overall performance reductions in terms of Canada’s environmental impacts. Those are tracked across the entirety of the program and then across the government’s set of programs because, as noted, it’s not just one program; it’s many.
As it relates to program selection, that’s probably best for my colleagues who can give a high level as to how we actually do program selection for the Strategic Innovation Fund.
[Translation]
Jean-Philippe Lapointe, Director General, Business Development and Strategy, Strategic Innovation Fund, Innovation, Science and Economic Development Canada: Thank you for the question. We use a number of indicators for SIF in particular. We have an initiative called the net-zero accelerator. We have a very sophisticated methodology by which to calculate those reductions for all projects with the potential to reduce GHG emissions over the next decade.
There’s an indicator in our departmental plan to which the fund contributes. We calculate emissions reductions. For projects with long-term potential in line with our 2050 targets, we calculate the number of projects that develop clean technologies that can be adopted by emitting companies. We also calculate the number of projects that facilitate or accelerate the adoption of these particular clean technologies. Generally speaking, I think we have objectives tied to job creation in green sectors and companies transitioning to lower carbon alternatives and that create employment. We measure those things too in all our projects.
Senator Galvez: Could you provide us with those strategies and the details on those indicators?
Mr. Lapointe: Yes.
Senator Galvez: Thank you very much. I have another question.
The governments have announced that Honda will be authorized to carry out a major $15-billion investment project in Ontario to develop the supply chain for these electric vehicles. What is the federal government’s financial contribution to this project?
Mr. Lapointe: What I can say is that SIF isn’t involved in that transaction. My understanding is that the new investment tax credits will support Honda’s investment.
Senator Galvez: You just mentioned that there’s a certain amount of coordination, that everyone’s talking to each other, that everything’s coordinated, and now you’re telling me that you’re not part of this project at all. Can you explain why?
Mr. Lapointe: No. That’s an excellent question. It’s a great example of coordination. The department and SIF have had discussions with Honda about their investment. We worked in collaboration with the federal Department of Finance, given that we have a new tool that we can use, which is the investment tax credit. In this case, the company and the government determined that the tax credit was the best way to support the project.
Senator Galvez: Lithium mining and extraction in Canada is in its infancy. What lithium will be used in this project? Is ISED involved in the extraction, exploration and development of the industry in Canada?
Mr. Lapointe: Good question; I couldn’t give a specific answer about the lithium that will be used to make the Honda batteries.
Generally speaking, however, there is a critical minerals strategy that has been developed and implemented jointly by ISED and Natural Resources Canada. The strategic innovation fund received funding in Budget 2022 to participate in this strategy, which affects several critical minerals, including lithium. The focus is mainly on processing. It’s less about extraction, and more about processing to secure that part of the value chain.
Senator Galvez: Thank you very much.
Senator Dalphond: My first question is for the CRA. It’s somewhat of a follow-up to Senator Gignac’s question about the carbon rebate for Canadians. We saw in the media that Saskatchewan, for example — and maybe even another province — refused to collect the carbon tax. On the other hand, you’re responsible for distributing the rebate. What’s going to happen? I heard that residents of that province will still get the rebate, but you won’t get the revenue. How will you finance all that?
Mr. Pagé: Unfortunately, we’re unable to talk about what’s being done in terms of tax collection. However, I can say that the payments will continue to be made. The agency has the tools it needs to seek funds when required, but that’s all I can say about Saskatchewan.
Senator Dalphond: When you say you have the means, does that mean you have borrowing capacity?
Mr. Pagé: No, it means we have the legislative tools to conduct audits.
Senator Dalphond: In the meantime, what will you do if you don’t have the money? I understand that, technically, there’s a one-year delay, and the money is distributed the following year. So, this year you’re going to distribute money that was collected last year, correct?
Mr. Pagé: The agency collects the carbon tax. As far as matching is concerned —
Senator Dalphond: Not in Quebec, because we don’t pay it; it’s a different system.
Mr. Pagé: In provinces where it’s applicable. As for year-to-year matching, it’s not necessarily one-to-one. My colleague at Finance Canada can give you the technical details.
We are allocated amounts for payment of the carbon rebate. Those amounts appear in the Main Estimates. They’re used to pay the amounts owing to residents of the provinces entitled to them.
Senator Dalphond: Can you give us an update on the emergency benefits recovery program? Initially, the idea was to not claw back those amounts, because it would be too complicated. A number of parliamentarians did not react very favourably to that approach. There were indications that efforts would be made to recover some of that money, especially since some addresses received multiple payments. Where do things stand now? That was back in 2020, and it’s now 2024, almost four years later; where do things stand?
Mr. Pagé: Are you interested in the benefits paid to businesses or individuals?
Senator Dalphond: For individuals, we’re talking about several billion dollars.
Mr. Pagé: I’m going to ask my colleague Mr. Marc Lemieux to come forward.
The Chair: If you could give us the information on businesses…. Personally, I’m interested in information on businesses. So if we could have information on both….
Mr. Pagé: Ms. Hawara can come back up here to respond to that question.
The Chair: It’s not that I’m not interested in information on individuals, but businesses….
Marc Lemieux, Assistant Commissioner, Collections and Verification Branch, Canada Revenue Agency: Good morning. Work has begun to ensure that only eligible individuals received COVID-related emergency benefits. Audits began in January 2022. This work is ongoing. As announced in our plan, this work will continue until March 2025.
To date, we’ve conducted full audits on 544,000 people. We audited all the payments they received from COVID programs for individuals. Our goal is to audit approximately 875,000 people who received payments under those emergency programs. The work is going well, and we have already reported statistics on these programs to Parliament. The work will continue.
We don’t just need to do audits; there are also collections and their impact on people. The CRA has a principle of always putting people first. That’s what we do when it comes to collecting that money.
Whether the CRA is collecting from individuals or businesses, our primary goal is to ensure that both parties reach a suitable agreement so that the amounts can be reimbursed.
We have to look at each situation on a case-by-case basis. We invite Canadians who owe money to the CRA and are unable to repay it to contact us, and we’ll look at each case individually. We’ll look at income, expenses, assets or even liabilities, and we’ll take all that into account to reach a repayment agreement. The objective is to get the money back — that’s our mandate — without putting people in —
Senator Dalphond: You’re trying to explain the procedure in detail, and I understand the human approach. However, in reality, of the 544,000 files that have been audited, how many have received notice of an outstanding claim? How much money have you collected from those who have been asked to repay the money?
Mr. Lemieux: The work is ongoing. I don’t have precise statistics on the number of cases that have been ruled ineligible. What I can say is that, up to December 2023, we estimated that nearly $8 billion needed to be collected from individuals for COVID-related programs.
The Chair: In addition to businesses?
Mr. Lemieux: That doesn’t include businesses, I’m speaking only about programs for individuals.
Senator Dalphond: In the same vein, can you give us some figures for businesses? I’m talking about $8 billion in December 2023 that could be collected, and it remains to be seen how much of that could be recovered. You don’t know yet?
Mr. Lemieux: Collections is a work in progress. We contact people to remind them that they haven’t made their payment yet, but, in general, when the agency asks people to make a repayment, they do so voluntarily. If they’re unable to make a full payment, we reach a repayment agreement.
Senator Dalphond: Of the $8 billion identified, how much have you recovered so far?
Mr. Lemieux: I don’t have precise figures here, but we could give you information on recovered and outstanding debt to date.
Senator Dalphond: Could you, perhaps, do the same exercise for small business loans?
Mr. Lemieux: We can do it for programs which provided COVID-related subsidies to businesses; yes, we can also provide a report on that.
The Chair: If I may, Senator Dalphond, could you also send us the number of bankruptcy notices that you’ve received, both for individuals and businesses? We don’t know whether it will be possible to collect amounts some day; however, when a notice of bankruptcy is received, that’s not usually a good sign for collection rates. Could you send us the number of bankruptcy notices you’ve received for individuals and businesses reporting a COVID-related debt to government?
Mr. Lemieux: We’ll see whether we can provide those amounts to you. Often, it’s difficult for us to match debts to programs, but we’ll see if we can do that.
[English]
Senator Loffreda: Thank you all for being here this morning. My question is for Innovation, Science and Economic Development Canada. As the COVID-19 pandemic has shown us, we were caught unprepared for a health emergency of such magnitude. It is therefore critical that we invest in Canadian companies and develop a competitive domestic life sciences sector to produce cutting-edge technology built by Canadians. ISED’s 2024-25 Departmental Plan highlights that the department will be investing $225 million in the Canadian biotech company AbCellera to build a new manufacturing plant that will produce antibody therapies for clinical trials. This investment should improve Canada’s ability to fend off future pandemics and health emergencies.
I would like to obtain a bit more information about ISED’s process in choosing which companies to invest in. What kind of details does the company need to provide to the government in order to secure this kind of investment? Could you explain how the $225‑million figure was reached, and are there any other future investments in the works?
Mr. Schaan: I’ll begin and note our concurrence with the pith of the statement. We concur that Canada’s lessons from the pandemic were that we very much needed a concerted biomanufacturing and life sciences strategy, and the funds in AbCellera are part of a broader Biomanufacturing and Life Sciences Strategy that aims to ensure that Canada has the fundamental capacities to be able to sustain itself in the face of health emergencies and potential future pandemics.
There are — and were — a number of organizations and investments made over the fourth course of that Biomanufacturing and Life Sciences Strategy, not only in the pandemic as a function of moving up capacities in particular vaccine manufacturing, but also in a number of other components. Some of that was run through our colleagues at the National Research Council and then also through the department itself.
In terms of the specifics on how and which firms will be supported, we’re looking to ensure that Canada possesses the diversity of tools and techniques that are currently available and at the cutting edge of supports in the life sciences sector. This was a function of how we also made determinations about the types of vaccine manufacturing that we saw as critical, because we wanted to make sure that we weren’t simply in one bundle.
I’m going slightly by background because it was a long time ago that I used to be the director of life sciences at Industry Canada. I’m not the current Assistant Deputy Minister for the biomanufacturing and life sciences office, but I would say the capacity to ensure that we have capacities in plant-based, in ag-based and then in novel technologies, including mRNA, is part of what is motivating which firms will ultimately be supported.
The specifics of any one company’s investment are a function of the project details as it relates to the capital costs as well as the ongoing costs. We then have a generalized approach as to the proportion of the overall contribution that we would then make to an entity. The funding for AbCellera would have been a function of the overall project size, and then the cost share as a function of what the government is able to support, and then the terms would be related to that.
Senator Loffreda: Are there any other similar projects in the future that you’re aware of that can benefit us Canadians in getting ready for future crises?
Mr. Schaan: The office of biomanufacturing and life sciences continues to work with a number of firms — those that were initially supported through the pandemic period, and then investigating possible future opportunities — and remains open and engaged with the overall sector. You will have seen a number of biomanufacturing and life sciences investments, and I think there is ongoing work to ensure that we’re well positioned.
Senator Loffreda: Staying on the investment side, ISED is requesting $2.38 billion for the Strategic Innovation Fund. I just would like you to elaborate on the successes and the challenges of this fund thus far. It is a substantial investment. What is the estimated total cost of the Strategic Innovation Fund? How is the funding decided, if it’s any different from the answer you just provided? Are there any employment requirements, or regional or sectoral balances? What’s most important — and sometimes we’re lacking in that area — is accountability; it’s the mechanisms, return on investment and accountability. How is that scored or kept account of?
Mr. Schaan: I’ll turn to my colleagues from the Strategic Innovation Fund who can give you the highlights of the program.
Senator Loffreda: Thank you.
Stephanie Tanton, Assistant Deputy Minister, Strategic Innovation Fund, Innovation, Science and Economic Development Canada: Good morning. I’ll start off with saying that the program — to date — has funded 129 projects, with total Strategic Innovation Fund funding of $9.5 billion and total project costs of $78.2 billion. Through these investments, we have supported jobs, and created and maintained over 125,000 jobs across all of the projects. There are R&D investments of approximately $25.8 billion. There are co-op opportunities for around 35,000 co-op students. There are numerous opportunities for small- and medium-sized businesses.
For the agreements that we have in place with companies, the companies have contractual obligations to Canada with regard to job commitments. This is something we take very seriously and we track. We work very closely with companies to ensure that those commitments are being met over the life of the agreement. There are quarterly claim progress reports and regular meetings with companies, as well as an annual economic benefit survey that is submitted by recipients and helps inform our impact assessment report, which I would point this committee’s attention to. The Strategic Innovation Fund Impact Report was recently released publicly on our departmental website and speaks to the benefits that have been created through the Strategic Innovation Fund and through our Contribution Agreement.
Senator Ross: Thank you all for your presentations this morning. My question is for ISED.
In New Brunswick, we often hear from entrepreneurs and businesses that broadband access in our rural areas is still not quite at par. I saw that we had 89% access in 2021, and it did go up 2.5% in 2023. I’m wondering what the timeline is for New Brunswick.
Mr. Schaan: Thanks so much.
Our target is for the country as a whole, and I’ll have to come back to you on the specific provincial target. The target is 98% of Canadians with high-speed internet by 2026 and all Canadians by 2030. There are agreements in place with the vast majority of provinces to be able to deploy the funds to meet the specific needs of the rural and regional areas within each province.
Senator Ross: I was in a discussion with some of my Atlantic and rural counterparts from the other place, and they did discuss that one of the biggest obstacles was that lack of access. What projects are in place to make that happen in those rural areas? I know in addition to New Brunswick, of course, Newfoundland and Labrador has significantly lower numbers as well.
Mr. Schaan: That’s right; the Universal Broadband Fund is predicated on reaching 50/10 speeds in rural and regional areas, where essentially the market failure wouldn’t allow for a commercial opportunity to be able to put it in place. The government essentially works with the proponent and the communities to be able to enact that.
Since 2015, $7.6 billion has been made available for broadband connectivity. We are on track to meet our connectivity goals. The projects are identified by the providers. We have a detailed mapping system that we utilize that’s available on our website, where we actually ensure to highlight where we still continue to have gaps and highlight opportunities for those projects. Proponents then put forward applications to the Universal Broadband Fund — often in partnership with the province if they have their own initiative — and then the provider works to build those out. They’re capital-intensive projects, so they do take time. From the time of announcement through to the actual access is often over a year to be able to allow for that build. But we are on target and we do have the provinces on board in the vast majority of cases, and have deployed the funds and are continuing to make that process happen.
Senator Ross: I did see the access map, but I don’t recall seeing the project map. I’ll look more closely for that.
Mr. Schaan: I’m happy to furnish the committee with further information as it relates to how we track our progress on the Universal Broadband Fund.
Senator Ross: Thank you.
Senator Marshall: I’m going to go back to the Department of Innovation, Science and Economic Development.
I just checked the Auditor General’s audits back to 2021, so I didn’t see any there relating to your department. They might be there. I know Ms. Tanton just gave some stats, so I don’t know if that was based on evaluations.
Just looking at some of the data coming out of your department, your Main Estimates went from $1.1 billion in 2015-16 to $6 billion now. And I know the budget is going to assign you more money and more responsibilities. I see from your departmental results that you’ve achieved 34% compared to the government average of 53%, and also that you hired more staff than you initially thought, but you still lacked significant amounts of money. It looks like the department is challenged or maybe even struggling to deliver the programs.
Can you just speak to that? Can you speak to the challenges of the department? You’re going to be counted on to deliver some new programs. I’m trying to see if the impression that I’m getting from reading the data is something that you’re experiencing.
Ms. Paré: Thank you for the question. Yes, there was significant growth in the department’s budget since 2015. The majority of the growth was in our grants and contribution vote, where we give money to recipients to deliver on specific projects.
The fact that there was a significant lapse in our departmental results is because they’re complex projects. We have our colleagues from the Strategic Innovation Fund to talk about the projects that we have. Often, recipients are experiencing delays in accomplishing those projects. When we initially receive the funding, we base this on the cash flow forecast from recipients. If they don’t complete it or they experience delays due to supply chain issues, we see these funds lapsing in our reference levels.
Senator Marshall: For the data that Ms. Tanton gave with regard to some of the programs, is that just extracted from data provided by the recipients of contributions and grants, or is that a result of independent evaluations of programs?
Mr. Schaan: It’s a mix of both. Obviously, we receive information from individual recipients to continue to track programmatic progress, but we also then have the capacity internally to verify that information and to provide the continued oversight function of the contribution.
Senator Marshall: You still haven’t tallied the data. I think that’s enough information.
For the CRA, I am just looking at some of the data. I noticed from some of your information on Open Data that there is $1.6 billion for reporting of compliance. What is reporting compliance? It sounds like a lot of money.
Mr. Pagé: Can you indicate which report you’re referring to?
Senator Marshall: I’m trying to find it here now. This is the other question I have while I’m looking that up: Have you got any big systems? Are you developing any major systems within the Canada Revenue Agency at this point in time? The systems development seems to be a problem within government as per the Auditor General’s report.
Mr. Pagé: I can talk about the systems if you want. We do have quite a rigorous process when it comes to development of systems. We have a plan that we update annually, and every year we spend roughly $150 million to $175 million on projects. The projects that we’ve recently completed — the big ones — would include the T3. We did some enhancements to trusts so that taxpayers can do more of their filing online.
We also have a number of projects that are intended to help us improve our efficiencies from within, so they’re projects that help us with our workloads and so on.
Senator Marshall: My time is going to be up soon. I’m getting this $1.6 billion for reporting compliance under your Canada Revenue Agency Report on Plans and Priorities planned spending by program. Reporting compliance is $1.6 billion — if you could send something to the clerk on that, I’m just wondering what it is.
And the information technology is $422 million along with information management services of $23 million, so if you could send some information on that, that would also be very much appreciated. Thank you.
[Translation]
Senator Gignac: I’d like to continue with the representatives from ISED. In a previous life, I had the privilege of being minister of economic development, innovation and export trade in the Quebec government. We analyzed files on subsidies and ratios. In line with the questions asked by Senator Loffreda and Senator Galvez, I’m going to refer to a specific case, that of Umicore, a large multinational with annual revenues of 20 billion euros and profits of one billion euros. In their press release, when the federal government announced that it was going to provide $550 million in grants and Ontario announced that it was going to provide $430 million, they seemed to be saying that almost half of the total investment would be in the form of non-refundable grants.
It’s known as a non-refundable capital expense grant. Is the situation with Honda similar, where it’s a non-refundable tax credit, or is it a subsidy? How many jobs will be created? What is your typical ratio? The fact that half of the total investment comes from public funds seems like a rather high ratio to me.
Mr. Schaan: Thank you for the question. Regarding subsidies for Umicore —
Senator Gignac: The response could be provided in writing, if you don’t have that information.
Mr. Schaan: Yes, it would be helpful to give the clerk the answer, because there are several components that make up the different elements of the project, and it would be good to establish each element of the project.
Senator Gignac: I’m trying to understand and I’ll have a follow-up question. As far as Honda is concerned, I was a little disappointed earlier with the explanation you gave Senator Galvez. It’s the finance department, it’s the investment tax credit. In my previous life, when I was minister, even though the finance department was involved via the investment tax credit, the analysis and the green light came from the Department of Economic Development. For the economic impact analysis, the decision was made by ISED, even though it was tied to a tax credit at the Department of Finance.
Are you saying that, depending on whether it’s a grant, loan or credit, your department isn’t always the one making the decision? Is it sometimes made by the finance department, rather than ISED?
Mr. Schaan: Thank you for the question. It’s a bit of a complicated question, because the mandate of the Minister of Finance is really to establish the tax system, and that includes credits and all those aspects. It’s really the public servants who do that. The Finance Department’s mandate is to create the tax program, including taxes for business support. But as there is a tax credit for the establishment of an automobile plant or perhaps the credits that are now most important for the innovation system, such as the scientific research and experimental development system, this tax also has a really important aspect for the department. There’s a lot of intervention and dialogue between the two departments to establish the innovation ecosystem in Canada, but the choice of a company that uses these technologies…. It’s really the choice —
Senator Gignac: I understand all that. In closing, as far as Honda is concerned, it was the new tax credit that was included in the federal budget that they took advantage of. We agree that there were discussions before the budget about the form it would take. In the weeks that followed, Honda made its announcement. It’s squarely an approach that applies to other companies, but it’s a decisive element for the company.
Mr. Schaan: With my colleagues in the department, we have an industry sector that includes a branch just for the automotive sector. They have a lot of conversations with all the major plants and manufacturers, including Honda and all the others. We have a lot of conversations about investment plans and investment opportunities in Canada, and these are things that are in discussion between the department and the Department of Finance about what the ecosystem needs to really help with those investments and planning.
You’re absolutely right. A new credit was announced in the budget and it’s on that credit —
Senator Gignac: Which was decisive.
Mr. Schaan: For Honda’s investment.
Senator Gignac: Thank you.
[English]
Senator Smith: I’d like to stay with the ISED department, please.
To get clarification and to follow up on Senator Ross’s questions a while ago, ISED’s 2024-25 Departmental Plan notes — and we talked about this — that 94% of Canadian households maintain minimum internet speeds of 50 megabits per second download and 10 megabits per second upload. The target set by your department for minimum internet speeds is at least 98% of the households by the end of 2026. The Federal Communications Commission in the United States has set its new target for minimum broadband speeds at 100 megabits per second download and 25 megabits per second upload.
I would just like to get an understanding of your target. Is it relevant as we go forward in time, especially in light of the fact that the United States has set new targets that are significantly higher than the targets in Canada? I have two other questions behind that, so give me a quick, short answer, if you could.
Mr. Schaan: The 50/10 was established a few years ago — not that long ago — as the kind of minimum necessity in terms of working speed for Canadians to be able to do what they need to do on the internet. The 50/10 remains relevant and, at this time, is the stated goal for both 2026 and 2030.
Senator Smith: Are there discussions to increase the benchmarks like they’ve been increased in the U.S.? How do we compare our benchmarks not only with the U.S. but also with other countries around the world?
Mr. Schaan: Canada’s connectivity rate is actually deeply comparable, if not in excess, for connectivity. We have one of the most connected countries in the world, notwithstanding our geography. I think one of the things that has to factor into connection speeds and connectivity rates is actually our geography. We have huge proportions of our country that are quite a bit more difficult to reach than even our U.S. counterparts.
From our perception, the goals we state of affordability, competition and connectivity as part of our telecommunications policies remain. We continue to look at what other countries are doing, but, as I noted, we believe that this first access of 50/10 as a minimum is not a ceiling but a floor. In many cases, we actually need to recognize it’s not even a floor that all Canadians currently enjoy, and that’s what we’re trying to get to.
Senator Smith: It was discussed that the $500 million in the estimates for the Universal Broadband Fund includes $50 million for internet projects for the benefit of Indigenous communities.
Could you provide some specifics in terms of progress being made to connect Indigenous communities, especially those in very remote parts of the country? If you could give some examples of projects that have been funded and are operational at this moment, that would be helpful. If you don’t have the answer right now, it would be nice if you could dig into it and get back to us.
Mr. Schaan: Absolutely. The one thing I would note is there are two parallel programs — one is run by the Canadian Radio-television and Telecommunications Commission, or CRTC, which has made a real priority around the North. It will be important to get information related to the CRTC’s program, not just the Universal Broadband Fund. Also, a portion of our overall connectivity funds is delivered by Indigenous Services Canada, and that program is the one that is particularly dedicated toward improvement in Indigenous connectivity. I’d be happy to work with our Indigenous Services Canada colleagues to get you more information.
Senator Smith: Could you produce something in writing for us? I think it would be helpful, especially for the communities that are involved.
Mr. Schaan: I’d be happy to.
Senator MacAdam: My question is for the Department of Finance.
The 2024-25 Main Estimates outline $46.5 billion in forecasted statutory authorities related to servicing public debt. This includes $42 billion for interest on unmatured debt and $4.6 billion for other interest costs, which is a $4.8‑billion increase from the 2023-24 estimates.
Of concern, the recent 2024 budget noted that federal public debt charges will likely rise to $64.3 billion by 2028-29. What is the plan to rein in these massive increases in public debt charges so that taxpayer money is not being used to service the debt, but rather it’s being used to fund programs to support Canadians?
Evelyn Dancey, Assistant Deputy Minister, Fiscal Policy Branch, Department of Finance Canada: Thank you for the question. As illustrated in Budget 2024 — which I know people have had a chance to look at already — the government is forecasting modest deficits that continue to decline both in nominal value and as a share of GDP over our five-year forecast horizon through 2028-29. The government is presenting a responsible economic and fiscal plan that includes diminishing deficits as a share of the economy as well as in overall terms. It is absolutely the case that our public debt charges are forecast to rise. This stems from two developments noted in the document, and is consistent with the Fall Economic Statement upon which our Main Estimates are prepared — that is to say, continued modest increases in interest rates, as identified by the private sector economists upon which our forecasts are based in our publication, as well as the growing size of debt stock overall upon which the public debt charges arise.
While the share of public debt charges as a share of the economy is slightly higher now from the 100-year historic lows we had experienced at the beginning of this decade, it is still relatively modest and affordable in a broader historical context at 1.4%, 1.6% and 1.8% of GDP, which is what we see over our forecast horizon.
With the diminishing size of deficits, the share of debt as a proportion of our economy is also forecast to decline, both over our five-year projection period and in the longer term, which is an important fiscal sustainability metric. That’s also described in the budget plan.
Senator MacAdam: I’m just thinking of your debt management strategies. Do you have a breakdown of these projected debt servicing charges in terms of the impact that the interest rate has on that versus the ongoing deficits?
I know both contribute to the rise in the cost to service the debt, but interest rates contribute to that, as do deficits.
Ms. Dancey: Yes.
Senator MacAdam: Can you isolate the impacts of each of those, or is that too difficult?
Ms. Dancey: I’m sure we could follow up with something that provides a decomposition. We don’t have it in the publication at hand.
Senator MacAdam: If you don’t have it, that’s fine. I was just curious. I’m sure your debt management strategy is quite detailed, but that’s fine. I don’t need the detail.
Ms. Dancey: Okay.
Senator Ross: This question is for ISED as well.
I’m interested in the Canada Foundation for Innovation, or CFI, funding. I read that, in 2023, 391 projects were funded, which is a more than 20% decrease from the prior year, although in my home province, the University of New Brunswick seems to have some modest increases in projects. Can you help me understand the decline in the overall number of projects?
Mr. Schaan: I think we can come back to you on that. My supposition, which would need to be tested, is that capital costs — and the CFI is largely related to large-scale research numbers — are often increasingly focused on big projects. The number of projects might be declining, but the actual investments are likely staying stable or increasing as a function of the technological value of what’s being implemented in research institutions.
Senator Ross: Is there any emphasis on the spread of regional projects, or is it simply merit-based and doesn’t matter where they’re from?
Mr. Schaan: The CFI has a national mandate and tries to ensure that our research ecosystems across the country are benefiting from the large-scale infrastructure that’s required. Obviously, there is a recognition about comparative advantages in a number of these spaces, where we’ve got specialized components and capacities that have been developed over time in regions. That often means there needs to be a corresponding investment to maintain that and to allow for its continued growth.
It is merit-based but with an eye toward ensuring that the full research ecosystem of Canada benefits, which means that you do actually need to have quite a bit of regional prioritization.
Senator Ross: I have one last question. Of the 391 projects that were approved and implemented, do you have any sense of how many applications there were and what the percentage rate of successful approvals is?
Mr. Schaan: I would have to come back to you on that and go through the CFI.
Senator Ross: If you are doing that, I would be interested to know from the provincial and Atlantic level as well. Thanks.
Mr. Schaan: Thanks.
Senator Loffreda: My question is for the CRA.
While the CRA is mostly known simply for collecting taxes from Canadians, it also plays a crucial role in distributing benefits and tax credits. In 2022-23, the department issued $46.4 billion to Canadians.
Could you speak to us about the CRA’s commitment to improving its digital services and your work in keeping pace with technological changes so that the agency can make it easier for Canadians to access information, apply for benefits and meet its tax obligations?
Are there any challenges? I heard from some of the professionals that there are some challenges with efficiency when filing taxes. Are you aware of any of those challenges?
But there is good news: We know that 92% of individual income tax and benefit returns, and 94% of corporate income tax returns, are filed digitally. Also, 78% of T1 refunds are issued by direct deposit. Those are impressive results, so congratulations on that. What is the agency doing to further leverage the digital transformation? Has the agency been able to evaluate how much savings have been generated from moving online?
Mr. Pagé: Maybe I can start with the investments, and then pass the floor over to my colleague Gillian Pranke to tell you more about the benefits from a program perspective.
As I mentioned earlier, the agency does invest quite heavily into our IT. I mentioned earlier that it is anywhere in the range of $150 million to $175 million a year. A lot of those projects are intended to help improve digital aspects of our operations and ensure that taxpayers are given more opportunities to be able to file online. Over the last few years, it has been an area where there has been growth. For us, regarding benefits and efficiencies, it’s an area where there are definitely efficiencies. Having to process a paper return versus a return that is sent electronically is a lot more efficient for us.
On that, I’ll just pass it over to my colleague Gillian Pranke to tell you more about some of the initiatives.
Ms. Pranke: Thank you for the question.
With respect to investments or improvements that we have been making on the digital front, first and foremost, we are always looking to see how we can provide opportunities for taxpayers to self-serve. It starts by looking back to very simple technology, such as self-serve using a telephone system or the Interactive Voice Response system, and also expanding into being able to self-serve on the website and improving that service experience.
Then, there are our portals. If I look at what we have been doing to improve service in our portals, three weeks ago, we launched a new service to make it easier and to reduce some of the friction in being able to create an account and access information pertaining to a particular taxpayer. This is a digital identity validation service where individuals can leverage their existing government ID, whether it be a driver’s licence or passport, to be able to get immediate access to register for access to My Account.
We are doing what we can to remove some of the friction. There is that really difficult challenge, balancing between ease of access and ensuring that information is kept secure — there’s enough friction in the system to make sure that we are always protecting taxpayer data.
To give you a sense, we have had over 143 million accesses to the current portals in the current year, and we have about 2 million new registrations from My Account. We are always looking to expand that and make it easier to use. Individuals can now check the status of many of their transactions with the Canada Revenue Agency, whether it’s wondering if we received their correspondence, the disability tax credit application, et cetera. We are always looking to enhance that.
That’s on the individual side.
On the business side, we are still looking to make improvements in that regard to make it easier for individuals to interact with us digitally. Again, it is always balancing that tension between ease of access and security.
Senator Loffreda: Thank you.
[Translation]
The Chair: I have two questions, while I have good witnesses with IT knowledge.
We look at what’s going on in the news, and we’re seeing more and more employees, public servants who have their consulting company on the side and are contracting for the government.
We can look at this in different ways and see it as a conflict of interest issue or whatever, but we can also say that the competence exists internally.
These people create companies externally to do business with the government.
Doesn’t the government have the requisite capacity or sufficient attraction strategy to go out and get these programmers, data scientists or that kind of brainpower? Or, if they come to work for the government, do they set up a company on the side?
There’s an increase in the number of employees and an increase in the number of consultants, and there’s a lot of dependence on the outside world, particularly in the technology, science, programming and artificial intelligence sectors. I get the impression that a lot of brains are out there working in private enterprise, like consulting firms, and the government is very dependent on that.
Do you find it difficult in your departments to attract this particular workforce in computer science or artificial intelligence?
Mr. Pagé: At the agency, I’d say we’re not a big consumer of professional services in the IT field. To give you an idea of scale, we have around 200 IT consultants working for us, while our IT group itself has close to 4,000 to 5,000 employees. Proportionally speaking, we’re talking about 4% or 5%.
As for your question in relation to employees who might have another activity, we also have mechanisms in place to ensure that, in such circumstances, this information is disclosed and analyzed, especially at the agency. We have to ensure that there is no conflict of interest, given our role. We have mechanisms in place on this side.
When we use consultants, it’s often to enrich our teams during peak periods and because we don’t necessarily need full-time people. We use consultants when we need a certain expertise, when we know it’s temporary and short-term. We enrich our teams with consultants in this field.
I would tell you that, compared with other departments and even the private sector, a ratio of 3% to 4% of consultants working with us is relatively low.
The Chair: In what cases do you have problems recruiting for this kind of workforce?
Mr. Pagé: There are recruiting challenges, we won’t deny it. There are areas of technology, particularly in security, where people are in high demand. We even have generous offers from the federal government in terms of compensation, but these people can receive very competitive offers from the private sector. These are fields where it’s sometimes difficult to recruit.
At the agency, we’ve had quite a bit of success in the past recruiting people — hence the size of our IT teams and the fact that we have few consultants.
[English]
Mr. Veilleux: From Finance Canada’s perspective, it would be a very similar response to what we just heard Mr. Pagé map out for the CRA. Obviously, there are specialized skill sets that we don’t have, which exist within the department. It is a very small labour workforce that we have out there, so often you’ll have the same impacts of surge capacity to address that.
When it comes to IT, we are also very, very small. If you look at the IT expenditure report that we provided to the Treasury Board of Canada Secretariat, or TBS, we average about $10 million, which is a very, very small investment in IT. We don’t leverage contracting very much in terms of our use to augment capacity. But I will say that, in terms of the checks and balances with the work going on in committees, the Office of the Auditor General of Canada and the Office of the Procurement Ombudsman, and all the work that’s going on in the world of procurement, we have tried to lean forward. We have contract review boards. We have augmented and updated our policies and guidance. We have significant oversight, and we really tried to get ahead of that curve to put the measures in place. We weren’t particularly struggling with it, but with the attention that was being paid, we did augment significantly, even with the correspondence that came out from TBS regarding the five new measures that are being introduced.
We have already had mitigation plans to respond to each one of those. We have brought those proposals to the executive committee in front of the deputy, so we are leaning forward. But similar to what we have heard from the CRA, there are certainly challenges with bringing in highly specialized skill sets across all the policy branches that exist within Finance Canada, and often these files move very, very quickly. We do — at times — have to leverage that specialized skill set as it relates to surge capacity and capacity that simply doesn’t exist within the branches.
[Translation]
Ms. Paré: It’s very similar on our end. To expand on what my colleagues have mentioned, with the government’s refocusing exercise, we’ve had cuts in professional services. For us at ISED, 40% of our spending on professional services was on IT, where we’re working to implement a strategy to move away from using consultants to putting resources in place with ISED employees. We have put forward a strategy to try and reduce our proportion of consultants within IT services. The cuts are forcing us to do this, because we have to spend less on professional services.
With all that’s happened in the media, we’ve double-checked our processes and made sure, in terms of conflicts of interest and security checks on consultants, that we have robust processes in place so that we don’t have these conflicts of interest. We don’t want to deal with consulting companies that are also employees.
The Chair: I have another question for Innovation, Science and Economic Development Canada. There are now tens of billions of dollars of government money being invested in the automotive industry, particularly in batteries. This is money that doesn’t necessarily go into other sectors. We’re prioritizing this sector, which is evolving extremely rapidly. Anecdotally, when you’re shopping for an electric vehicle, you’re told not to buy it, but to lease it, because the technology is progressing so quickly that the vehicle will lose value and it’s not a good idea to buy it because everything is moving so fast.
We’re investing tens of billions in battery factories when, in five to ten years, they may be obsolete. Technology could change. Today, I read an article saying that Ford’s work at Bécancour has stopped. It may not have reached your department yet, but the work was stopped saying that it looked like management was reviewing the plant’s model because of technological changes.
Do you have targets, ways of measuring precisely the impact you want to see in the economy of the investments you’re making, particularly in batteries and in these sectors, to make it more worthwhile from an economic point of view to invest in these sectors?
Secondly, do you have a mechanism in your support agreements if there isn’t necessarily a long lifespan or if things change in the middle of the project? It doesn’t have the same economic impact, or it won’t be necessary to offer the same support.
This is a bit broad, but do you understand my question?
Mr. Schaan: Yes. I’ll start and hand over to my colleagues from the Strategic Innovation Fund for the second part of your question.
To begin with, it’s important to note that our automotive strategy is based on a context of ensuring that Canada is in a position to assume a leadership role in a greener economy. So we’re making big investments to make all these industries greener, but in the case of the major industries that contribute to Canada’s GDP, it’s important to start with the automotive sector, because of the role it plays, the number of its employees and its large contribution to the Canadian economy.
At the same time, it’s the same for the energy sector and other sectors. There are also investments to ensure big changes in Canada for the greening of the economy.
The Net Zero Accelerator initiative and the Strategic Innovation Fund, which are based on greening the economy, are making an important contribution.
At the same time, there are the other aspects of our industrial strategy, such as digitization and resilience, as I said to another senator, regarding investments in life sciences, among others. It’s all part of a grand strategy to make sure that Canada can play a leadership role.
Concerning investments and investment structures in plants, it’s all based on a mix between investments and tax credits. It depends a little on the specific structure of the investment. It’s different for every investment, but it’s really about the use of taxes and investments. You have to make sure that companies are required to produce the goods that the government is investing in, and also that those products are part of the country’s economy for Canada to give those funds to investors.
Given the role of the automotive sector, there may be changes being undertaken to make the sector greener, and it’s important to establish that Canada has a place in manufacturing these products because of its role in the economy.
The Chair: To be more specific, in your industrial policy, do you have clear objectives, with clear units of measurement, of what you want to achieve in terms of economic development and in terms of the environment? Because we can’t see it.
Are these objectives, these plans, these units of measurement published?
[English]
Mr. Schaan: The Innovation and Skills Plan — which was the original kind of guiding document for the government as it relates to the economy — was initially published in 2016, and had a number of core economic measures at the host of it. Obviously, it was published pre-pandemic and many things have occurred since then.
We’ve continued to articulate — including through public addresses and by our deputy — an industrial strategy that is rooted in green digital and is resilient, and there are specific objectives nested within those, including programmatic-specific objectives.
On the net-zero advantage, for instance, we talked about the greening of Canada’s economy, the need to move to a net-zero economy, and the capacity to remove greenhouse gases from the system while also building economic advantage in those spaces. The complexity of measures includes things like greenhouse gas emissions, but also things like jobs and numbers of investments that have been made into the greening of the economy.
On the digital side, I think the macro indicator remains the business expenditure and research and development, but also the adoption of technology and capital investment in technology by firms, as well as by the intellectual property that’s generated and the degree to which we can continue to retain and control the benefits from that.
Resilience is, on the one hand, clear and, on the other hand, less clear in the sense that the goals of resilience are to ensure that we have strategic tradeables as it relates to our next existential crisis, and whether or not we have security and sovereignty of supply in a number of zones. That’s at the core of the Biomanufacturing and Life Sciences Strategy, but that’s also our work on semiconductors. That’s also our work on the battery economy in many ways, because we were literally watching the remaking of supply chains, and assuring that Canada would actually have a place in that supply chain at a time when they were being remade and the investment window was extraordinarily narrow.
Senator Marshall: I have one for the Canada Revenue Agency. In response to Senator Pate’s question on the tax gap, when will we see the next report on the tax gap? That’s my first question.
Second, is your target still a reduction of 42% to 48% from the tax gap that you estimated back for 2018 — $35 billion to $40 billion?
Mr. Pagé: That report is planned for 2025. I can’t comment on the reductions. We will have to get back to you on that one.
[Translation]
Senator Gignac: My question is for the Department of Finance. Given that 99% of spending is made up of legislative authorizations, I’m going to talk more about budgetary policy. There are specialists here.
In the budget just presented, there’s a $30-billion increase in budget spending, excluding debt servicing. That’s a 6.7% increase in spending, compared with 2.7% for the previous year, or $12 billion. As a percentage of the economy, government continues to grow; we’ll reach 16% of GDP compared to 15.6% two years ago.
My question is for the economists. Is this budget expansionary? And why have an expansionary budget at a time when the economy is overheating and the Bank of Canada is trying to curb inflation by raising interest rates? There’s an interaction.
Is this the result of advice from the economists at your round table, or rather a political decision?
Mr. Veilleux: I will invite Ms. Turcotte to answer this question
Julie Turcotte, Assistant Deputy Minister, Economic Policy Branch, Department of Finance Canada: Good morning. Thank you for your question. One of the key measures, when you look at the whole budget, is the change in the deficit, which takes into account the change in spending, but also in revenues, including tax-related measures that might be contained in the budget.
This is indeed the case in the budget. If you look at the change in the deficit, I think it’s about 3% of GDP over the whole projection. So, these are pretty minimal amounts. In fact, per year —
Senator Gignac: We say it’s over five years, but in the next year. Because you’re respecting the budget anchor, which is $40 billion, there’s no doubt about it. In the first year, $6.9 billion will come from capital gains. That’s why you’re respecting the $40-billion deficit.
But when you scratch the surface, you see that spending is accelerating by 6.7%. This is a sharp acceleration on the previous year’s figure of 2.6%. I’m trying to understand the rationale behind such an expansionary budget.
Ms. Turcotte: These are government decisions. What I can say is that we are achieving the objectives for the budgetary situation that were set out in the 2023 economic update. We’ve reached those targets of having a deficit of —
Senator Gignac: Excuse me for interrupting, but we’re running out of time. When your economists predicted interest rates, they didn’t predict such an expansionary fiscal policy.
Do you have any interaction to incorporate the impact that such a fiscal policy will have on the scenario that affects interest rates, or is there really no action that has been taken?
If you had 2.7% spending growth like last year, your interest rate scenario would have been different.
Ms. Turcotte: The stimulus effect on the economy really depends on what happens on the spending side. So, revenues are up, spending is up, but we’re looking at the budget balance. It’s really the most important measure to give an idea of the net impact of fiscal policy.
Senator Gignac: Thank you very much.
[English]
Senator Pate: My questions, I think, will require a written response, and they are for the Department of Finance.
Budget 2024 contained in Annex 3: Legislative Measures an item entitled Supplementing Immigration Holding Centres, and in the wake of human rights concerned, all 10 provinces have refused to any longer detain people in provincial jails for immigration purposes.
When the questions were asked of the Minister of Immigration and the Minister of Public Safety, the media was redirected to the Department of Finance because you’re responsible for the budget. I’m curious if you could please clarify how many other items — and which items — in the list of legislative measures in Annex 3 are not associated with items or priorities discussed in the main budget documents.
Second, given the human rights concerns and the issues that have been raised, I would like to know what the GBA Plus analysis says in terms of what kind of information was created in order to assess whether this was an appropriate measure, given the long-standing human rights concerns about immigration detention, which don’t seem to have been factored in.
Third, which departments and which civil society experts were consulted in the making of this decision?
Mr. Lapointe: ISED will return to the committee a written response.
Senator Pate: Thank you.
Senator Ross: I know we are at the end of our time, so I have a quick question. It’s a bit of a niche question for the CRA because we were talking a lot about accessibility.
I want to ask for businesses, non-profit organizations and charities. Professional service providers can’t have them sign an authorization with the new rules. The owner has to log in to the CRA My Business Account and authorize them, so they can’t use the written authorization that they can use with personal clients. For a lot of boards of directors or not-for-profits — these types of organizations — the individual shareholders or directors don’t have access. Their SIN is not associated with the corporation, and, in some cases, they don’t really want that access.
These professionals have an e-file licence that they defend or protect. Is there a way that it could be accessible to them with the signed documents in the way that it is personally available? It does cause a lot of delay and complications for those types of clients.
[Translation]
Mr. Pagé: Do you want us to respond immediately, Mr. Chair, or in writing? I’ll ask a colleague.
The Chair: Yes, if you can answer in 15 seconds, otherwise in writing.
[English]
Ms. Hawara: My colleague Gillian Pranke would normally have come up, but, in the interests of time, we can get back to the committee with a more fulsome answer.
We are aware of the challenges, but, as my colleague Gillian Pranke was saying, this is very much about balancing ease of service with security considerations. We are aware of the challenges. We are having conversations with some of the stakeholders who are expressing the challenges they have faced. We are making some improvements, but there are important security considerations that need to be kept in mind. We can get back to the committee with a bit more information.
The Chair: Please do. Thank you.
[Translation]
Thank you all so much for giving us more time. It’s really appreciated. I remind you that you have until May 14 to send us the additional responses we’ve requested.
I remind committee members that the next meeting will be tomorrow, May 1, at 6:45 p.m. to resume our study. Thank you all, and thanks also to the support staff.
(The committee adjourned.)