[Recorded by Electronic Apparatus]
Wednesday, May 3, 1995
.1545 
[Translation]
The Chairman: Order, please! We will begin with the report of the Sub-Committee on Agenda and Procedure.
[English]
Are there any comments?
Mr. Shepherd (Durham): I have a motion from the subcommittee, which met on Wednesday, April 26, concerning the future business of the committee. The report has been tabled.
The Chairman: I will read the motion.
[Translation]
``The Sub-Committee on Agenda and Procedure of the Public Accounts Committee met on Wednesday, April 26, 1995 and agreed to report as follows:
First, that the committee hold an in camera meeting from 11:00 a.m. to noon during the preliminary examination of the first periodical report of the Auditor General. The meeting is scheduled for May 11, 1995 from 10:00 a.m. to 2:00 p.m.''
It is suggested that between 10:00 a.m. and 2:00 p.m. there be one hour set aside for an in camera preliminary examination of the report with the Auditor General.
Second, that the committee hold a public meeting on Tuesday, May 16, 1995 at 3:30 p.m., with the Auditor General on his first periodical report.
Third, that the meeting on the estimates of the Office of the Auditor General for 1995-96 be postponed until Wednesday, May 17, 1995 at 5:30 p.m.
Fourth, that the May 30 meeting be devoted to the study of a draft report on the chapters about the Department of National Defence - that is, chapters 24, 25, 26 and 27 of the 1994 Auditor General's report - rather than to chapter 2 on megaprojects, as planned».
The main reason we decided to drop megaprojects was that given our tight schedule between now and June 22 and the many meetings we have agreed to hold, we would not have had enough time to study the chapters for which meetings have already been scheduled.
We plan to present four reports on the chapters that have already been studied and on those that will be studied in the next few weeks. So there simply would not have been enough time between now and June 22.
That is why there was consensus among the representatives of the three parties to suggest this schedule.
[English]
Are you ready to move the motion?
Mr. Shepherd: I so move.
[Translation]
The Chairman: All those in favour?
The report is carried unanimously
The Chairman: I believe there was a meeting between Mr. Fillion, his assistant andMs Whelan's team. We agreed on some points regarding the eighth and tenth reports.
We will begin with the additions to the eighth report. I'll ask Mr. Fillion and Ms Whelan if they have any comments to make.
First, Mr. Fillion.
Mr. Fillion (Chicoutimi): We met two days ago and we agreed on some recommendations. I don't know how we should proceed.
.1550
For example, with respect to our report on chapter 29, I asked that a point (D) be added. We agreed to set up a sort of table on the report. It appears on page 1.
The Chairman: We can proceed point by point. We have points A, B, C, and D. We could begin with point A.
Mr. Fillion: We could.
The Chairman: There could be a proposal to include a point (D) after paragraph 17, because the report as such has already been accepted. So we will deal directly with the additions you propose.
Mr. Fillion: Agreed.
The Chairman: So you suggest that a point D be added after paragraph 17.
Mr. Fillion: That is correct.
The Chairman: Do you have any brief remarks you would like to make about this addition? You have the floor.
Mr. Fillion: I will talk about it after we've talked about additions A, B, C, and D.
The Chairman: So would you like me to read what we have here, or will we simply have a discussion or agree to these points?
Mr. Fillion: Yes.
The Chairman: I would ask you to read the addition and to comment on it very briefly.
Mr. Fillion: Fine. I suggest that a point D be added after paragraph 17. Its title would be ``Information for parliamentarians''.
The wording I requested was this: ``Include in Part III of the Finance Department's Estimates the total amount of the delinquent income taxes, broken down by receivable value''.
It was agreed that we would change the wording of this paragraph to read as follows: ``Include in Part III of the estimates of the Department of National Revenue the total amount of debts due, broken down by individual and corporate accounts, source deductions, the value of the debt and the percentage of the total value of these debts''. We would suggest the following categories: ``Accounts of less than $1000 , accounts between $1000 and $9999, and so on''.
This would be a sort of table that would be appended to Part III of the Estimates, and would be related to table 63, which exists somewhere. This would be additional information.
[English]
Mr. Williams (St. Albert): Mr. Chairman, it says on this addendum that I've received ``recommended wording changes''. Now, what's being changed? I'm lost here.
Ms Whelan (Essex - Windsor): Whatever's in bold type is what was originally proposed. See where it says ``recommended wording changes''?
Mr. Williams: Yes.
Ms Whelan: Right above that in bold type is the first line that was originally proposed.
Mr. Williams: Was the wording in the bold type in the original report before, or is that the original proposal by Mr. Fillion?
Ms Whelan: By Mr. Fillion.
Mr. Williams: Okay. So we have a proposal by Mr. Fillion, which is number 1 in bold print. Now Mr. Fillion is agreeing to change that wording to what's down below. Is that correct?
Ms Whelan: Correct.
Mr. Williams: This is a new section D of number 17.
The Chairman: After paragraph 17, we'll add that paragraph.
Mr. Williams: So we just completely ignore this writing in bold print.
Ms Whelan: That's the proposal. The proposal is that the bold will become the recommended wording change. Yes, that's right.
Mr. Williams: I still don't understand. It says here:
- Include in Part III of the Finance Department Estimates the total amount of delinquent income
taxes, broken down by receivable value.
[Translation]
Mr. Fillion: So that would not appear in the report. The title, and it appears after the recommendation is ``Include in Part III of the Estimates of the Department of National Revenue''. The words not in boldface type would be included in the report, while those that are in boldface type would not appear in the report.
[English]
Mr. Williams: The part in bold type was never in the report to begin with.
Ms Whelan: At the last meeting, during which I believe you left early, we discussed this at great length, and it was decided that Mr. Fillion and myself would meet and come up with a proposal that we would bring back to the committee today.
Mr. Williams: Okay, now I understand.
Ms Whelan: Sorry, we should have filled you in on that.
Mr. Williams: Okay. I apologize for having to leave the last meeting early, Mr. Chairman.
.1555
[Translation]
The Chairman: Ms Salvail was wondering how ``Include'' would look like in the text in terms of grammar and syntax. I think I should entertain a motion allowing the Chair to make grammatical and syntactic corrections to ensure that the text reads well both in French and in English.
Mr. Fillion: With your permission...
The Chairman: Yes.
Mr. Fillion: In Part III, Revenue Canada, there is table 62 with a title. There will be another title following that one and the people from Revenue Canada will give it any title they wish: personal accounts, corporate accounts, payroll deductions. They will have columns according to the various categories.
The Chairman: I think it will be clear. It will be the subject matter of a recommendation to be included.
[English]
Mr. Williams: I'd also like to add another line below this ``greater than $250,000'', Mr. Chairman, which would be ``and the amounts written off''.
At the end of your table, Mr. Fillion, add one more line ``and the amounts written off''.
The Chairman: Do you agree with that?
Ms Whelan: No. It's already there. If you read the estimates, the allowance for doubtful accounts and the credit reassessment accounts are already in the table. We're going to start adding things that are already there. We already went through this at great length, because when you start to suggest one thing, it affects a number of different tables. That was the purpose of meeting yesterday, so we wouldn't debate this again.
[Translation]
Mr. Fillion: The information Mr. Williams is asking for is already included in table 63.
[English]
Mr. Williams: Okay, I withdraw that.
[Translation]
The Chairman: That's fine. I think I understand that we all agree on this change to ``include'' in Part III.
Amendment agreed to
Let's move to point 2. Mr. Fillion.
Mr. Fillion: On point 2, we have agreed to withdraw our request.
The Chairman: Withdrawn.
Mr. Fillion: Yes. The same thing goes for point 3.
The Chairman: Does everybody agree to this?
On page 2, point 4.
Mr. Fillion: We are withdrawing this correction that we had asked for and we accept the new wording: "Include in the Department of National Revenue's Main Estimates, Part III, a reference to the national objective, which is to lower the accounts receivable to a specific percentage of the gross revenues, for example, to 4% over two years. We agreed to this.
The Chairman: Do you agree to this recommendation?
Mr. Fillion: Yes.
The Chairman: Fine.
Recommendation agreed to
The Chairman: We're still on the 8th report. Let's move on to point B. Mr. Fillion.
Mr. Fillion: The 8th report?
The Chairman: Yes we're still on the 8th report, point B).
The Clerk of the Committee: The 8th report, which means chapters 30 and 31.
The Chairman: With regard to chapters 30 and 31, I think we decided to drop the first paragraph.
Mr. Fillion: We are deleting the first paragraph, at our request.
The Chairman: Agreed.
Mr. Fillion: Instead we agreed to adopt the following wording, on page 4.
[English]
Ms Whelan: Page 3 in English, but the English is out of order.
[Translation]
The Chairman: If I understood correctly, in section B, in the French version, the first and second paragraphs on page 2 are deleted.
Mr. Fillion: Right.
.1600
The Chairman: The first paragraph at the top of page 3 will be deleted, and the three paragraphs that I've just mentioned will be replaced by: ``Every employee affected''. That's the first paragraph.
The second one starts with: ``Therefore, the committee recommends that the government look into...
We are keeping those two paragraphs while deleting the three preceding ones.
Mr. Fillion: That's right.
The Chairman: Any comments?
[English]
Mr. Williams: I recognize the profitability of paying somebody $35,000 to generate $492,000 a year, but I do not think it's the responsibility of government to present it in that format, Mr. Chairman. I think we are concerned about non-filers because they don't file, not because we can make a profit by paying $35,000 a year for somebody to collect $492,000 a year. Therefore I agree with the need to pursue non-filers in order that the tax may be perceived to be fair and equal for people who do pay their taxes properly, but I do not think the motivation for increasing the efforts towards non-filers should be based on the fact that a person could collect $10 for every $1 it costs us to maintain them. Therefore I think the wording should be changed.
I think it has to be along the lines of the following, Mr. Chairman: Recognizing the need for fairness and equity, your committee requests that Revenue Canada consider it's in the taxpayers' interest for the government to look into the possibility of hiring additional personnel to generate and collect additional assessment. I think this reference to $35,000 and $492,000 should not be there.
Mr. Shepherd: On the same kind of concept, maybe what you want to say is: In recognition that there is a degree of uncollectible accounts that could be made better.... You're trying to get at the same thing. ``Fairness and equity'' doesn't really -
Mr. Williams: I have no problem whatsoever with more effort being directed towards non-filers. At some point in time you get into the law of diminishing returns, but obviously we haven't reached that point.
The rationale for going after the non-filers, Mr. Chairman, is not that it's profitable per se but to ensure that for those people who do pay their taxes honestly, fairly, and on time, they perceive the system as fair and equitable. That's the motivation for going after the non-filers. Yes, we can collect more taxes than it costs us to do it, but I do not think we should be saying to the Canadian public, look how profitable it is to go and squeeze non-filers, so we're going after them in big style. That's the wrong message we're sending out. The message has to be to maintain the fairness and equity of the system.
Ms Whelan: Mr. Chairman, if you read the entire statement, and I know Mr. Williams is just seeing it for the first time, it doesn't talk about the non-filer program as where we would be putting additional personnel. It says: ``that the government look into the possibility of hiring additional personnel for its income tax and GST compliance and collection activities given the rate of revenue recovery demonstrated by the non-filer program''. It doesn't suggest we put more employees directly into that program.
Mr. Williams: But isn't the previous paragraph also part of the report?
Ms Whelan: It is, but it just says it is based on the success of that program. Again, we recognize - and I'm open to suggestions - that we don't have direct targets, first of all, and that there's a law of diminishing returns. It doesn't mean that because you hire 100 people you're going to collect an additional 100 times that amount.
Mr. Williams: You're opening yourself right up for targets if you leave this in the report. I just thought I'd do you a little bit of a favour there.
Ms Whelan: Okay. Do you think we should take it out?
Mr. Shepherd: Why don't we drop the first paragraph? I think it's addressed in the second paragraph.
.1605
Ms Whelan: Do you still think the conclusion sends the wrong message, Mr. Williams?
Mr. Williams: As I said, I disagree - and if I were you I would strongly disagree - with the $35,000 versus $492,000, because you're wide open for an attack on quotas, absolutely. If you want to leave it in, then that's fine. I'm just telling you right now.
The other thing is yes, I recognize the need to ensure the fairness of the tax system, so we go after non-filers and anybody else who's delinquent and so on. We want to make sure the system is fair and is perceived as fair, especially by those who pay their taxes willingly and on time.
Ms Whelan: I agree.
Mr. Williams: If they think others are getting away with it, then their motivation is going to go straight down.
Ms Whelan: I don't want that message to be.... If your interpretation is that's what people will think, I'm....
[Translation]
Mr. Fillion: I think we could drop the $35,000 and $492,000 from the first paragraph. We could write ``given the success of Revenue Canada's non-filer program, the committee believes it is in the interest of taxpayers that the government...''
I think what gets our attention is these figures, and they might not be the same year after year. There might be salary fluctuations, there might be fewer tax dollars coming in, but the objective remains the same, nevertheless. Basically, we want to hire more people if it's possible and when the demand is there.
The Chairman: So are you saying we should drop the first sentence? This way we would avoid some redundancy because the first and second paragraphs are a bit repetitive.
Mr. Fillion: You think so?
The Chairman: Yes, we could get rid of the repetition.
Mr. Fillion: I agree. Why don't we let you rework it? I am sure you understand what I am getting at.
The Chairman: You say that the government should look into the possibility of hiring additonal personnel. The same thing is said a second time so we will correct that.
Mr. Fillion: Fine.
The Chairman: Agreed. I think we have concensus on this. We will take out the first sentence and modify it so there is no repetition.
[English]
Mr. Shepherd: Is the motion to eliminate the first paragraph?
The Chairman: No. We will eliminate the first sentence.
Mr. Shepherd: Maybe I'm not getting the drift of the presentation. The second sentence in the first paragraph, you just mentioned, is almost identical to the recommendation. Isn't that -
[Translation]
The Chairman: The same sentence is repeated in the first and second paragraphs. We're basically going to merge both sentences in order to eliminate the repetitions. The second sentence of the first paragraph is basically the same as part of the second paragraph. I think what it basically comes down to is dropping the first paragraph. You are right, we should drop the first paragraph and rework the second one. It would be worded as a recommendation.
Mr. Williams.
[English]
Mr. Williams: I think we have that straightened away, Mr. Chairman.
I have one little extra addition, if I may. After ``hiring additional personnel'', I would add ``and/or improving their efficiency''.
.1610
The reason I say that, Mr. Chairman, is that I have been contacted by people in more than one tax centre who tell me that the effort by personnel in the collection of income taxes on a daily basis is absolutely abysmal. I have that right from individuals working in the tax department. That's not hearsay. It's people whom I have talked to personally who are working in Revenue Canada and who tell me that accounts have been written off just because they decided it was coffee break time. Now, I don't have that documented properly, but I'm putting you on notice that does happen.
Ms Whelan: I'm not objecting.
Mr. Williams: Senior management in Revenue Canada should be aware of it. So I'd like to see ``and/or improving their efficiency'' added. It's not just a case of hiring more bodies if their productivity is around 15% of what it should be.
Ms Whelan: Sure, I understand.
The Chairman: Would you repeat explicitly the sentence you propose to add?
Mr. Williams: Since there is going to be a little bit of editorial amendment by the research staff, it's ``the possibility of hiring additional personnel and/or improving the efficiency of the staff''; something along those lines.
Ms Whelan: He's inserting those words in whatever's reworked.
Before you go on to the tenth report, I have a couple of questions about the eighth report that I'd like to clarify, if I could. Section C goes onto the tenth report. Is that correct?
The Chairman: Yes.
Ms Whelan: Back at the first session, when we revised the eighth report, I forget which paragraph it is where we adopted it, but we adopted the 13-point action plan. We changed the wording.
If you read paragraph 13, it mentions the statistics would be available in 1995-96. I'm referring to page 2 - it's actually page 3 now - paragraph 16. The very last line says: ``Your Committee expects that the Department will publish this information in the Public Accounts of Canada of 1994-95...''. It won't be ready until 1995-96. I just wanted to clarify that. So I would like to make the proposal to change it to 1995-96.
The Chairman: It will be changed.
Ms Whelan: The other thing was that in paragraph 17 - I don't see this changed, but maybe I missed it in the last meeting - the second line, where it says ``...there were no guidelines...'', I'd just like to change the word ``no'' to ``insufficient''.
I didn't come up with wording because I thought the researcher was coming up with wording for that other section. I'm looking at draft number 4 here.
Ms Michelle Salvail (Committee Researcher): It's paragraph 28. Since the last meeting, we haven't had another draft. I would propose to add: In his testimony the deputy minister indicated that close to 80% of non-filers filed voluntarily thereafter.
Ms Whelan: Okay. So you're going to change paragraph 28.
Ms Salvail: I'm going to add that sentence.
Ms Whelan: You have to take part of it out in order to add that sentence. It says: ``But the Department should also try to determine how many detected non-filers file voluntarily thereafter''. We know that. We have the statistics for that. That was my concern with that paragraph.
Ms Salvail: That's why I included the statistics.
Ms Whelan: But you have to take that sentence out. It doesn't make sense to have that sentence in and then include the statistics.
Ms Salvail: So how would it read?
.1615
A voice: You have to present it, and then it goes to....
The Chairman: Your committee therefore recommends....
Ms Salvail: After ``the non-filed program must surely bring in additional money'', my suggestion was to put the sentence I've told, then say the department should try or.... I don't know.
Ms Whelan: The department knows how much money the non-filer program brings in. We have the statistics. Those two sentences don't make sense, based on what's -
Ms Salvail: Okay, I would delete those two sentences and then the recommendation.
Ms Whelan: It's fine to take the two out.
The Chairman: Does everybody agree with that?
Some hon. members: Agreed.
[Translation]
The Chairman: Before going to the next report, let's just finish with the eighth report. There are three questions: A), B) and C) that we ask each time.
That the draft report, as amended, be concurred in. Is there a mover?
[English]
Mr. Williams: I'm lost, Mr. Chairman.
The Chairman: Mr. Williams, if you look at the agenda, we are on 2(A), that the draft report, as amended, be concurred in.
Is there a mover?
Mr. Williams: I so move.
Motion agreed to
The Chairman: The next motion is that the chair be authorized to make such grammatical and editorial changes to the report as may be necessary without changing the substance of the report.
Motion agreed to
[Translation]
The Chairman: The next motion is that the report, as amended, be presented to the House of Commons by the Chair of the committee.
A voice: Agreed.
Motion agreed to
The Chairman: Instead of moving on to the ninth report, I suggest that we go to the tenth report, because there are fewer changes. There are some additions proposed to the ninth report and I believe that they haven't been discussed by the two parties therefore it might take a little longer to deal with that. We could come back to the ninth report afterwards.
I suggest that we go to the tenth report first and that we come back to the ninth one a little later. Mr. Paradis has circulated some additions to the tenth report.
[English]
Ms Whelan: Do you want me to table this now? I will table them.
The Chairman: Is that okay?
[Translation]
Until now we've studied the eighth and ninth reports. We hadn't started on the tenth. Why don't we go page by page? Mr. Fillion, you could walk us through your proposed additions on each page.
In the meantime, Ms Whelan, since I believe we have a copy of this, we could also look at the additions recommended by Mr. Paradis. I should tell you that Mr. Paradis has sent us a copy of the tenth report indicating in every case where his additions come in.
So, we are on page 1 of the tenth report. Mr. Fillion, I believe all is well? Any comments?
[English]
Ms Whelan: Mr. Chairman, I'm not sure. He's suggesting 1,800. I believe he's suggesting it in paragraph 5. He has it down as number 1, but my understanding is it should be.... Yes, 1,800 is down here.
The Chairman: Do you have a copy of that report from Mr. Paradis that shows the exact paragraph?
.1620
Ms Whelan: That was what I was going to propose for paragraph 5. I'm just trying to -
The Chairman: It showed the exact paragraph for putting each addition.
Ms Whelan: That was going to be my suggestion - the 1,800 businesses that received the $750 million. So $750 million should be to 1,800 instead of ``other companies''.
[Translation]
The Chairman: Are there any comments or questions on page 1?
Mr. Fillion or Ms Whelan.
[English]
Ms Whelan: Mr. Chairman, is Mr. Paradis's suggestion just on paragraph 5? The very last two words in paragraph 5, where it says ``other companies''...it should be 1,800 companies or 1,800 businesses.
[Translation]
The Chairman: So instead of saying «other companies», you would specify the number: 1,800 companies. I think we all agree. It is agreed to.
Motion agreed to
[English]
Ms Whelan: Then in paragraph 6, there's another suggestion. I think after ``government finances'' the suggestion would be ``Where tax assistance for retirement...''.
I think the idea is to.... I'm not following this. You've got it marked as number 2. It's en français. He wants to insert a paragraph break.
Ms Salvail: This is in paragraph 6.
Ms Whelan: He is suggesting it should be a separate paragraph.
Ms Salvail: Yes.
Ms Whelan: Is that not a grammatical...?
The Chairman: He wants the paragraph apart, starting with ``Where tax assistance for retirement...''.
Ms Whelan: Okay. Are we in agreement that it can be a new paragraph?
Mr. Williams: I'm lost.
Ms Whelan: In paragraph 6, we're just going to divide it up. The first paragraph will end after the word ``development''. The next paragraph will start ``Where tax assistance for retirement savings is concerned...''. He believes it's two separate thoughts. It would be a new paragraph.
[Translation]
Mr. Fillion: Nothing is being added?
The Chairman: There will be two paragraphs instead of one. Paragraphs 6(a) and 6(b) would become the seventh and eighth paragraphs.
Mr. Fillion: Okay, but with an indented line.
The Chairman: Yes, so as to draw attention to this section.
Mr. Fillion: Very well, I agree.
The Chairman: Agreed? It's unanimous.
Mr. Fillion, would you like to correct or add something on the first page? Oh, it's a little further. Very well.
Page 2.
Mr. Fillion: I have a first recommendation to make for the French version.
On page 2 of the French version, there is the first line of the recommendation after paragraph 10.
I don't know where it is in English. I don't know if it is at the same place.
That would be the first recommendation, after paragraph 10.
The Chairman: Let me have a look. Yes, it's the same thing: «That the Minister of Finance publish better information».
Mr. Fillion: Yes.
We would like to amend this in order to say that we should find information on companies which benefit from fiscal incentives for research and development, as well as the types of activities they engage in.
The Chairman: That is exactly what is in your addendum, which has been circulated.
Mr. Fillion: That's right.
The Chairman: Okay. That's the recommendation starting at the bottom of page 2 in the French version.
.1625
Is that it?
Mr. Fillion: Yes. It's a paragraph that starts with: ``Also, the document on tax expenditures should provide information on long-term trends.''
We could add, after that sentence: ``and should contain informatiton on businesses that benefit from tax incentives for research and development, as well as on their type of activity''.
We have discussed this with the lady and it didn't seem to cause any problems.
The Chairman: That's exactly what you have in your additions on page 3. That is what is in bold type.
Fine. Are you suggesting an addition or an amendment?
Mr. Fillion: I leave the syntax up to you, except that this is additional information that we would like to get. You can add it where you wish.
The Chairman: Very well.
So you're asking that this information be added in the first recommendation, in paragraph 10?
Mr. Fillion: Precisely. The idea is to request information on the businesses that benefit from tax incentives and on their type of activity.
The Chairman: While we are at it, regarding the third correction requested by Mr. Paradis, we indicated that only the word ``encouragement'' in the French version should be corrected. I'm trying to see. It is the word ``encouragement'' that occurs further, on page 3? Fine.
Ms Salvail: I would just like to have some clarification.
About the information on the businesses that benefit from incentives, and their type of activity: You say that you want that to be included in the document on tax expenditure. Might it not be more appropriate to include it in Part III of the Estimates for Revenue Canada?
Mr. Fillion: As long as the information is provided.
Ms Salvail: Do you still want it to be included in the document on tax expenditures? I only want a clarification.
Mr. Fillion: Is it the Department of Finance that is responsible for that?
Ms Salvail: Yes.
Mr. Fillion: So, we'll include it in Part III, and that will be their notice.
Ms Salvail: Okay, we will include it in the document. I just wanted that clarification.
Mr. Fillion: Okay.
The Chairman: You have agreed to add this paragraph. I think that that has been approved now. On page 2 everything is okay.
We will move on to page 3.
[English]
Ms Whelan: Are we on page 3?
The Chairman: Yes.
Ms Whelan: Is it paragraph 13? I'm just concerned that in paragraph 13, what we're trying to do is change what's already been called for in the budget. I don't know if that's really what we should be doing. The 1995 budget sets up the task force, and we want to broaden it. I'm just not sure that wasn't the mandate of the original task force. I don't know if it can be covered or not.
[Translation]
The Chairman: If I understand correctly, the idea is not to change the mandate that was given to the task force, but for the future, we would like the group to also look into tax assistance for retirement savings. That's what I understand. I don't know if one of you has information on that?
[English]
Ms Whelan: I was thinking that maybe a different task force should be set up, because this task force is to deal with communications between the two departments. Its mandate is not to review programs. I'm concerned that we're giving it a mandate it wasn't set up to do.
.1630
Ms Salvail: What can be added at the end of paragraph 13 is that the committee wants a task force or someone in Revenue Canada to address a system for retirement savings as well.
Mr. Williams: As I recall, Mr. Chairman, the witnesses said they are or have been in the process of doing an evaluation of the programs we considered. I presume it will be published in due course. I think it's more a case of ensuring that publication gets out in a timely fashion rather than broadening the mandate of a task force, as is being suggested here.
My question to the research staff is, am I right in saying these issues of tax deferral and tax incentives were the subject of evaluation studies by the department?
Ms Salvail: That's correct. However, in that paragraph we're talking about better information about the program. As I said, it could be dropped. I could drop the recommendation. It's up to the committee.
Mr. Williams: I would hope that in this evaluation the type of information we would be looking for or we feel the general public would like would be contained in this report. As I recall, it has already been dragging on for some number of years. Therefore I think it's more important we get that report out and see what it's like than to create more work if it has already been done. So I think the emphasis should be on getting that report finished and made public.
Ms Salvail: We can drop paragraph 13.
Mr. Williams: We skipped over paragraph 11, Mr. Chairman, which follows on to paragraph 12.
The recommendation in paragraph 10 is a direction to the Department of Finance to provide better information, and number 11 says we want to pass judgment on it. I'm not sure it's the role of this committee to pass judgment on every recommendation we make. I don't know when we're going to get anything else done if we keep reviewing all these recommendations to see they've done them properly.
My goodness, these people are paid big dollars, and they're presumably educated in order to be able to do the job properly. If we tell them we want more and better information, surely they would be able to deliver.
But we're saying here that they should submit the proposed improvements to us before they're published, so that we can express an opinion on them. What are we going to say? I ask the committee that. What are we looking for?
The Chairman: Do you propose to withdraw paragraphs 11 and 13?
Mr. Williams: Perhaps we should make an addition to the recommendation in paragraph 10, that the additional and better information we are asking for satisfy the concerns of the Auditor General that he laid out in his report. If they satisfy the concerns he laid out in his report, then presumably they're getting, if not up to the mark, then close to the mark.
I don't think this committee wants to get tied down in the administrative detail of telling a department how to run a department. We're losing the effectiveness of the committee.
Mr. Shepherd: I expect the concept was to require, in the sense that we know they brought the information back to the committee, but the wording is such that the committee ``can'' express. It doesn't say we have to do anything with it. It's just that the documentation should be filed with the committee, but we don't have to do.... It isn't that we're actually physically active. I think what we're really trying to do is ensure the work is done within some time lines, and we're expecting a report. That was the kind of thought process.
.1635
Mr. Williams: I appreciate what you say.
I see the role of this committee as being to point out the shortcomings and tell particular departments of government what they have to do to meet the standards we have set. We will be getting a response from the government. If that response from the government says yes, we hear you and we will oblige, then I would think our role would be fulfilled in anticipation that the government is going to do its job.
I don't want to get bogged down in the administrative detail of running a department. I don't want to have in here, we'll just ship it off to the committee, and they'll never look at it. I like to be serious about these things.
However, I see your point as well.
I'm not making a large issue of it this time. However, I think by and large as a general direction to the researcher...or we should be getting a commitment from the witnesses at the time we hear them that these things will get fixed up right away.
[Translation]
Mr. Fillion: It is simply a matter of following up the information request. I believe it is within the committee's mandate to make sure, once it has heard witnesses, that they answer all the requests that we make to them.
How can we make sure that these people have fulfilled our requests? The only way is for them to produce for us what should be succinct reports. The important thing is the follow-up, according to me.
Ms Salvail: We could say something in between: ``The committee will monitor this topic with interest when the Auditor General follows up on his own report in two years''. Each time the Auditor General carries out an audit, he also has to follow it up two years later. This could be a way for us to supervise what they do without having to ask for something specific. That is my suggestion.
Mr. Fillion: I think that your suggestion would allow these people to sleep at the switch during two years, whereas the committee wants to see progress as of now and until the publishing of a new report by the Auditor General within two years. Is there some other middle-of-the-road solution?
The Chairman: I heard several comments. I believe there is a consensus to drop paragraph 13 and the following recommendation.
Mr. Williams, you spoke on paragraphs 10 and 11, but you didn't recommend that we delete them altogether.
If I understand correctly, there's consensus to drop paragraph 13 and the following recommendation and to leave the rest as is. As for the way it should be worded, we could start with what our researcher suggested.
Did I summarize what I heard correctly? If so, let us agree on that.
[English]
Mr. Shepherd: I think the majority wants to leave it the way it is.
The Chairman: Okay.
[Translation]
I think that Mr. Paradis' correction, to the word ``encouragements'' at the bottom of page 3 involves a typing error, which we will correct.
[English]
Ms Whelan: Does he want it at the end of paragraph 14?
The Clerk: In French it's after fiscaux; in English it's after ``incentive''.
Ms Whelan: He wants to insert the line: ``Revenue Canada declared to the committee that it has to reopen the file for each of the 1,800 companies to inform the committee on their sector of activity. The situation is the same for the 6,000 individuals and the 5,000 small private sector companies.'' Those two sentences would be the second and third sentences of paragraph 14.
.1640
He wants to include that line - ``Revenue Canada to declare to the committee that it has to reopen the file for each of the 1,800 companies to inform the committee under ``Sector of Activity''. The situation is the same for the 6,000 individuals and the 5,000 small private-sector companies. That sentence would be the second sentence of paragraph 14...those two sentences; second and third.
The Chairman: Any comment on that?
Ms Whelan: Then in paragraph 15, Mr. Chairman, it's not the Department of Finance that made the commitment. It's the Department of National Revenue that made the commitment.
The Chairman: Paragraph 15?
Ms Whelan: In the very first line it says the Department of Finance has made a commitment. It's Revenue Canada that made that commitment. I refer you to page 38 of the minutes of March 14 to clarify that.
Mr. Paradis has a number of changes he'd like to make to that paragraph as well.
[Translation]
The Chairman: Mr. Paradis wishes to change the two first lines of paragraph 15 and wishes to replace them with the paragraph he suggests at number 5 on the sheet we have before us.
[English]
Ms Whelan: I think what he wants to change, though, is....
[Translation]
Mr. Fillion: This is to follow up on the addition he suggested some moments ago to paragraph 1. He simply wants the department to give the information to us by sector.
The Chairman: Do you agree?
Mr. Fillion: Yes, I agree with the suggestion.
[English]
Ms Whelan: I'm not sure I'm following this. That wasn't what the commitment was, what the department gave. I have the minutes right in front of me from that day.
[Translation]
The Chairman: It is an addition.
Mr. Fillion: For information.
The Chairman: This is similar to the change you made at the beginning, Mr. Fillion; instead of receiving raw data, we would be given a breakdown which would help us to understand better and would provide more complete information.
[English]
Ms Whelan: I'm just trying to refer back to the minutes of the meeting of that day on what was agreed to and what they said was impossible to do. How many businesses are there per sector and what is the average amount in tax exemptions for each of these businesses?
That's fine. That's what was in the minutes.
[Translation]
The Chairman: We will specify that it is Revenue Canada and we will add Mr. Paradis's paragraph number 5.
Is the sixth suggested change on the same page? Instead of «grosse entreprise», we will say «grande entreprise», since it is the way it is usually said. We will also be making the sixth modification.
Mr. Fillion: In paragraph 16, Mr. Chairman.
The Chairman: I am back to Mr. Fillion's changes to paragraph 16.
Mr. Fillion: Paragraph 16 says that: «The committee believes that the government should be able to answer essential questions such as...» and there are five or six questions raised. I would like to add a final question which would read as follows: «Will the program be in keeping with the government's new science and technology policy?»
The Chairman: Would you please repeat it?
Mr. Fillion: Could we add a point (F)?
The Chairman: Yes.
Mr. Fillion: It deals with the tax incentive program for research and development. I would like to add: «Will the program be in keeping with the government's new policy on science and technology?»
The Chairman: Agreed.
Mr. Fillion: We are told that it is being reexamined.
The Chairman: You are replacing the word «general» by «new policy».
.1645
[English]
Is there any comment on that?
Ms Whelan: Mr. Chairman, I just think we should be aware of the fact that this was discussed among us yesterday. At the time it was pointed out to Mr. Fillion that this is already being brought to cabinet. The program is already under review. In light of that fact, perhaps the question isn't going to make a lot of sense.
[Translation]
Mr. Fillion: But we have no guarantee whatsoever that the Cabinet will answer this question any time soon. By adding ``as soon as the Cabinet has made a decision'', we can obtain an answer to the question.
[English]
Ms Whelan: Mr. Chairman, I'm trying to say that in general terms the 1994 budget mandated some equality among the various departments in the science and technology area. There needs to be some consistency.
We're talking about evaluating a program when the policy is still being set for that program. I just think the question is premature. Once the policy has been set, then perhaps that's a time to evaluate the program.
[Translation]
The Chairman: Any other comments, Mr. Fillion?
Mr. Fillion: When will the policy currently being examined by the Cabinet be made public? If it is released in June, that means that we could do an assessment as early as next year.
[English]
Ms Whelan: Well, it's expected to come out some time in the summer of 1995.
But I just don't understand how you can ask whether or not something is reflected in policy that's not established. I just think it's premature, because there's no general policy.
The Auditor General pointed that out. In his report he said no general policy was in existence. So the question is premature.
[Translation]
Mr. Fillion: The policy will soon be in place, and everyone will be made aware of it. We therefore will have a few months to appraise it.
Will the tax incentive program that is currently being set up be in keeping with the new policy that is soon to be announced?
The Chairman: You want the Department of Finance to tell us if these incentives will be in keeping with the new policy?
Mr. Fillion: Yes, with the new policy that is soon to be implemented.
The Chairman: You want us to get this information during the fall.
Mr. Fillion: That's it, in the fall, at the end of the year. One thing is for sure, we will have this policy before the end of June or at the beginning of the summer. Will the Cabinet then determine if it is in keepig with the tax incentive program for research?
I don't see why some say that this question is premature. If there is insufficient information and if the department cannot answer this question, they will let us know.
The Chairman: Are there any other comments on that issue?
[English]
Ms Whelan: Mr. Chairman, I still believe it's premature to call for an evaluation of whether or not the program reflects the policy when the policy hasn't been set.
Mr. Shepherd: I would suspect that there's always an implementation delay -
Ms Whelan: That's correct.
Mr. Shepherd: - between a policy change and how, for instance, Revenue Canada will react to that. There's an implementation period.
I rather agree with Ms Whelan; I think it's premature.
.1650
[Translation]
The Chairman: Who are those in favour of adding the words: ``Will it be in keeping with the government's new policy on sicence and technology?''
The proposal is defeated
[English]
Ms Whelan: Where's the change?
The Chairman: We suggest an addition after paragraph 18, at the recommendation.
[Translation]
Mr. Fillion, you have something to add at the bottom of page 4? Excuse me, there is a correction. Your addition is included in the recommendation in paragraph 18, on page 5.
There seems to be a consensus on the balance of page 4. We now move to page 5.
Mr. Fillion: On page 5, we would replace ``as soon as possible'' by ``before the end of the session''. The idea is not to have the nine studies done, but to supply a revised work plan. ``As soon as possible'' could mean six months, a year, two years... It could be interpreted in just about any fashion.
My question is to the researcher: Do you believe that we could have this information before the end of the session?
Ms Salvail: Yes, and when the Finance Minister was here, he left us with a list of nine studies. Some of these are in the process of being done and others will be carried out. I think they already know which ones will be ready within a year or two. They certainly have a plan in this respect.
Mr. Fillion: Agreed. So, it is possible to get this information without overburdening them with work.
Ms Salvail: I think that it is simply a matter of forwarding a work plan to the committee.
Mr. Fillion: This does not change anything, except that the timetable is specific.
[English]
Ms Whelan: I don't understand that. In the preamble we say that they were to be completed by fiscal 1993-94, but it now appears that the department intends to have them completed by the end of 1996. We're talking about...I'm not sure what....
Ms Salvail: We asked for a plan. We know that they're going to do them during this year or next year, but we want to know when. So we want to have a plan.
Ms Whelan: So we're looking at a plan to be completed by the end of 1996. Are we acknowledging that the evaluation will not be done until the end of 1996?
Ms Salvail: Oh yes, we agree, but we want to know exactly when those evaluations will be done. So we want a plan to make sure that.... We want a new plan, because they postponed the evaluations.
Ms Whelan: Okay. Are we saying before the end of June? I think we should give them at least until September. We're not going to be able to look at it before then anyhow.
Mr. Shepherd: If my memory serves me correctly, Finance was talking about October. I remember the argument about how they were going to do this over the summer.
Ms Salvail: It was about R and D; it was not about pensions.
.1655
Ms Whelan: In the notes on page 46 you had suggested October. My guess would be that it would probably be after we get back from the summer, since the summer is a particularly good time to get work done. We do a lot of work over the summer. That would be my guess. So I would suggest we give them to the end of September.
[Translation]
Mr. Fillion: Perhaps we could go half way and request that the Department provide the report before September. It would not really be a deadline, in the sense that if the report is ready at the end of July, they can table it then or wait until the first of September. They will then have the latitude to choose when to table it.
The Chairman: We are in agreement on the beginning of September. I think there is a consensus on that.
On page 5, nothing; on page 6...
[English]
Ms Whelan: Just one thing in paragraph 20.
The Chairman: Paragraph 20? Okay.
Ms Whelan: We recommended that the report will be on 15,000. I want to point out this is an extremely costly exercise that you're asking the department to undertake. It is also resource intensive. Because of the fact that the department had not kept that information, it has to go back through all these reports. We're talking about 15,000 claims to produce this information. I am just not sure what we're going to do with this information once it comes forward in light of the fact that the program is changing anyhow.
[Translation]
The Chairman: You're suggesting that we do not request the taxpayer profiles? You are suggesting that we delete that part?
[English]
Ms Whelan: This is a new major requirement that was not demanded during the session when the department was here. I am just saying it is extremely costly and extremely resource intensive. It wasn't something that was considered by the committee when they were before us and I don't know why it's coming forward now.
Mr. Williams: I think we can reduce it somewhat, Mr. Chairman, and just ask for the amount of tax credits granted under this particular program. I think we want to know how much these adjustments are going to be costing us.
[Translation]
The Chairman: We just need the total amount.
[English]
Ms Whelan: Do what? I'm sorry.
Mr. Williams: Profile it all then.
[Translation]
The Chairman: We will just ask for the total amount. No profile.
On page 6, everything is okay? On page 7, the last page?
Mr. Fillion: On the very last page, after the last recommendation, we would like to add a new one saying something like: ''...establish a policy with a view to eliminating administrative duplication between the federal and provincial programs, in relation to the R&D tax credit», so that there is no overlapping.
The Chairman: At the end of the text, you suggest that we add: ``...eliminate administrative overlap between the federal level and the provincial level in regard to research and development tax credits''. That is the recommendation that you want to add.
Ms Whelan.
.1700
[English]
Ms Whelan: I was still on page 6. I have a couple more comments.
Mr. Williams: I'm on page 6 too.
Ms Whelan: We're talking about another new major requirement that was not suggested when the department was before the committee, and again we're talking about another work-intensive and costly exercise. We're all supposed to be concerned with cost cutting. I don't know why we continue to push forward costly exercises.
Mr. Williams: I think, Mr. Chairman, we want to eliminate the word ``costs'' in the recommendation. The discussion, if I recall, was the fact that the banks in particular are claiming R and D tax credits for, for example, a large amount of computer programming and computer development, which they would normally be doing in the normal line of business anyway - just normal, competitive, healthy, sound business practice.
They were quite concerned that it really didn't fit in within the role of the scientific R and D tax credit, because this all became proprietary knowledge. It was never out in the public domain or anything like that. They were concerned about the fact that while the banks technically qualified for the tax credit, it really wasn't doing the economy of the country any good whatsoever, even though it was costing us, they said, about $300 million, because the work would have been done anyway and it didn't spin off into a wider realm.
Therefore I think what we are concerned about is that the Department of Finance or Revenue set up adequate monitoring mechanisms - don't worry about costs - so that these tax credits do generate enhanced economic activity and jobs.
That's what the whole focus was about. It had nothing to do with monitoring from a monitoring point of view. It was to ensure that the tax credits that are there to enhance economic activity and create jobs and create R and D do create R and D, rather than just provide a tax relief to the banks who would have done it anyway. That was the objective. Therefore the recommendation is A-OK, in my opinion, provided we remove the word ``costs'', because the Department of Revenue...the deputy minister said quite specifically that they were looking at that particular situation.
Ms Whelan: I think what the deputy minister said was that there was already ongoing monitoring.
Mr. Williams: No, no, he said they should certainly take a close look at that situation, because until now the banks have qualified and, yes, they meet the terms and conditions of the R and D tax credit in this bulk filing, if I may use that term. On September 12, 1994 they claimed an additional $300 million of tax credits. Much of it was questionable from the point of view of generating real R and D that was going to benefit the economy in the country and job creation. But it was going to cost the taxpayer $300 million.
[Translation]
The Chairman: I'd like to make a suggestion. Besides removing the word ``costs'' we could make the following change: ``that the Department of Finance, in collaboration with Revenue Canada, ensure that adequate monitoring mechanisms are in place so that situations such as the granting of income tax adjustments can be detected''. We say that there are already some mechanisms and we would say: ``...ensure...'' that we have adequate monitoring mechanisms rather than ``...put in place...''.
Therefore, we would not question the fact that there are none. I think that we can avoid costs but we have to make sure that there are mechnisms.
[English]
Ms Whelan: I'm fine with that, because I believe there already are mechanisms in place. I'm concerned that when we talk about setting up new or specific mechanisms we're getting into costly ventures. You have to realize that when you require a new system or new mechanisms you put into place, you're asking for follow-up and constant monitoring. There already is a monitoring in place. It's in the notes. It's even in the summary statement.
.1705
[Translation]
The Chairman: To reassure Mr. Williams and the other members around the table, we could say that the Department should ensure that there are adequate mechanisms. I do not think that the fact of ensuring that will bring about additional costs, and it will be an adequate response.
[English]
Ms Whelan: I don't have a problem with what you said.
The Chairman: Okay.
Mr. Williams: Ensure.
The Chairman: Any other comments on page 6?
Ms Whelan: I have one at the bottom of paragraph 23. I don't know if Mr. Williams has a comment before that.
Mr. Williams: On paragraph 22, Mr. Chairman...based on the comments we heard again this afternoon, the recommendation was that the Department of Finance significantly increase the resources; basically spend more money. I think what we really want here is to ensure these programs are managed for the benefit of Canadians, and if we are going to give tax credits and deferrals, we find out they're beneficial and they're within the public policy of Canada.
To increase the resources significantly without saying what we want to manage...I'm not sure we're accomplishing a whole bunch other than spending more of the taxpayers' money.
The Chairman: They told me it was put there by the researcher because it was suggested by Ms Brown.
Mr. Williams: I don't know how many people they need to monitor the system properly, but if they say three, I'm not going to say they're wrong. But I do charge them with the responsibility of ensuring it's properly done.
Ms Salvail: In the recommendation included in that, the Department of Finance revised the resources it allocated to managing to -
Mr. Williams: Did they say it was inadequate?
Ms Salvail: They say they have limited resources so they could...they put three on that. I think they thought they could have more, but they were limited. I would suggest that we revise the resources allocated.
Mr. Williams: I would think it could ensure adequate resources to manage the program.
Mr. Grose (Oshawa): Yes.
Mr. Williams: If it's 15, then it's 15. If it's 2, then it's 2.
An hon. member: Absolutely.
The Chairman: Okay. Page 7.
Ms Whelan: On paragraph 23, during the meeting we talked about the fact that the department has practically no independent data for determining the validity of RRSP deductions. If you refer to page 42, where Mr. Lefebvre was speaking, that's not really true.
It says, where he was speaking, that all claims for RRSPs are subject to validation and auditing. As with any other deduction claim, you must provide receipts on demand. As well, we should all note that the department has certain post-assessing and E-file validities in place as well as an audit program, which verifies to some extent the RRSP deductions. I don't think that statement is quite accurate.
Mr. Williams: I think the concern by the Auditor General was that there's absolutely not the slightest reason why we couldn't implement SIN numbers and electronic reporting by financial institutions and trust companies to monitor the system through computerization. We do it to a very, very large degree with T-4s on payroll, T-5s on interest and other things. Because of the relative ease by which receipts could be used perhaps more than once, because every RRSP receipt of course has that extra copy for the provincial filing, they would like to see the electronic methodology being used.
.1710
Since it is already well entrenched for many years on other aspects of the income tax filing, it should be extended to RRSP receipts as well. That was the point. It's not the monitoring just to expand existing capability into the area of RRSPs.
Mr. Grose: There was no cross-checking.
Ms Whelan: Mr. Chairman, I disagree, because of the fact that there is an $8,000 over-contribution and the majority of people haven't claimed it. You can claim that without any penalty whatsoever. So you're suggesting there is a -
Mr. Williams: Used to.
Ms Whelan: Until December 31, 1995. You are suggesting there is substantial abuse, and there is no evidence of that. I am suggesting that -
Mr. Williams: No, no, that's not the point I am making. Because you get more than one copy of the receipt, I could put $2,000 into an RRSP and claim a $4,000 deduction. Now I may be entitled to a $6,000 deduction, but I would get say $4,000 for making a $2,000 contribution.
Ms Whelan: I disagree, because if you read your RRSP receipt that you received from your financial institution, there is copy 2 and copy 3. There are two copies, but there is a different number on it and only copy 2 goes to the government. Copy 3 is retained by the taxpayer.
Mr. Williams: I can assure you that many people file the wrong part with the government and they accept it.
Ms Whelan: They don't accept both 2 and 3 of the same form.
Mr. Williams: This is the whole point that the Auditor General was making, the fact that it is so easy for copy 2 and copy 3 to be filed in subsequent years, for example, because RRSPs need not necessarily follow the exact year. I could file copy 1 this year and file another copy next year of the same contribution and claim two deductions for one contribution. That was fairly simple and he was quite concerned about it.
Ms Whelan: Mr. Chairman, I am looking at the notes and I see nothing in there about using copy 2 or copy 3. I don't want to add things to the report that weren't discussed at committee.
Mr. Williams: It was discussed at committee.
[Translation]
The Chairman: Mr. Fillion, would you like to make a comment? Mr. Shepherd?
Mr. Fillion: This paragraph was included because the department wanted a tool for asking trust companies and banks to reveal who their RRSP clients are. Because the social insurance number is missing, the banks cannot reveal to the government the amounts of RRSP they sell. The only information the government has is from the taxpayer who bought the RRSP. The government wants the seller to provide it with receipts of contributions confirming the sale. This way, the government will be able to compare the amounts, make adjustments and compare with the information provided by taxpayers.
The government only gets the taxpayer's receipt, but not that of the seller, the bank or the trust company, so there's a problem. The government has already tried to get the social insurance number included on the receipt, but their success rate is only fifty percent. So once the social insurance number is included everywhere, I think that people will be less prone to cheat by using the same form two or three times.
[English]
Ms Whelan: Mr. Chairman, SIN numbers will improve the system. I believe they will. My concern was with the statement that says there is no independent data. I disagree with that statement, and the reason I disagree with that statement - and I'm suggesting that it should be noted...perhaps add a final sentence that says, ``...it should be noted that the department does have some information or a certain post-assessing in E-file validities in place as well as an audit program''.
It is not a perfect system - I am not suggesting that - but I'm saying there is a system that verifies, to some extent, the RRSP deductions. I'm not saying it's perfect. I'm not suggesting that. I'm not disagreeing with the statements made that SIN numbers will dramatically improve the situation. I am just suggesting that we're saying there's no independent data. I think it should be noted there is some assessing system in place and some auditing is done on the RRSPs. I had to put my receipts in -
.1715
[Translation]
The Chairman: We could drop it, because it is an example. That's what it says: ``For example, it was discussed...'' etc. The important sentence is at the beginning of paragraph 23. The researcher told me that the sentence was added in as an example. We could simply drop it. But maybe somebody has another suggestion. Ms. Salvail.
[English]
Ms Salvail: We can just add a sentence with what you said.
Mr. Williams: Aren't we going to make a recommendation, Mr. Chairman, that perhaps Revenue Canada pursue the development of this system of having financial institutions report RSP contributions as financial institutions are required to report interest paid and employers are required to report all employer information? It's a minor extension of the program to have financial institutions report RSP contributions.
[Translation]
The Chairman: That's quite interesting. If I remember correctly, this recommendation reflects the discussion we had in committee. The problem was that financial institutions did not provide all the information required. I think this could also answer the concern of the Department.
[English]
Mr. Shepherd: I guess most of my concerns have been answered. I thought at one time we were talking at cross purposes, and clearly the financial institutions are not required to make these statements to Revenue Canada now, and there imposes the problem. I don't think anybody knows how serious it is or what effect it has.
Ms Whelan: I think it was very clearly stated that the department expects 90% compliance by the end of 1995, if I recall right - 90% voluntary compliance with the financial institutions. That stands out in my mind, and I believe that in one of the previous things we talked about, if they didn't receive it they would look at requiring institutions to withhold funds at source. Was that not part of a previous report?
Mr. Shepherd: Just to clarify, I think where we're getting confused is that they were talking about T-5s. They were talking about interest income and that they were unable to get...they were getting 80% compliance on those T-5s -
Ms Whelan: Right.
Mr. Shepherd: - but there was still a certain body of them that they weren't getting. On the RRSP side of it they're not getting any documentation from the financial institutions at all.
Ms Whelan: Okay, I see what you're saying.
The Chairman: Mr. Williams.
Mr. Williams: Mr. Shepherd made my point.
Ms Whelan: What's the recommendation, then?
Mr. Williams: I think the recommendation is that Revenue Canada request financial institutions to supply the information on RRSPs, along the lines of T-5s. That's all.
[Translation]
The Chairman: Okay. We will drop the ``for example'' sentence and reword the rest along the lines you are proposing. We agree on that. There is a concensus. Is there anything else? Mr. Fillion, you were going to add something to page 7?
[English]
Ms Whelan: I have one more before you get to that. It's in paragraph 24, which is on page 7. At the session on March 14 the department had agreed to submit a comprehensive work plan to the committee by October 1995. The recommendation is changing the deadline, because it says by the end of the session, does it not? Where it says ``by the end of the session''.... It was stated on page 48 of the notes that it would be October....
Ms Salvail: Okay, we'll change it.
The Chairman: Mr. Fillion.
[Translation]
Mr. Fillion: Toward the end: ``That the Department ensure there is a policy to eliminate administrative overlaps between the federal and provincial R and D tax credit programs''.
The Chairman: On page 4 of the proposals, then on page 7 of the 10th report?
.1720
[English]
Ms Whelan: Mr. Chairman, I think that this is repetitive, because it has already been included by the Auditor General in his report. It's something that's already ongoing. I don't know if we're going to be creating more work for the departments to look at something that the cabinet is already looking at and that's already been directed by the Auditor General.
I think it's one thing to say we agree with the Auditor General's recommendation; it's another thing to re-mandate it in different wording.
Mr. Williams: If they were to file one tax return, obviously we wouldn't have this duplication.
Ms Whelan: Pardon me.
Mr. Williams: If they were only to file one tax return, we wouldn't have to worry too much about duplication.
Ms Whelan: I don't know what you mean.
Mr. Williams: It's a personal income tax.
Ms Whelan: We file only one tax return.
Mr. Williams: Not across the country.
Ms Whelan: You're suggesting across the country? Is that what this is to suggest?
Mr. Shepherd: He's just being facetious.
Ms Whelan: We file only one in Ontario.
The Chairman: Mr. Fillion.
[Translation]
Mr. Fillion: Do you have the Auditor General's recommendation?
Ms Salvail: No, we don't.
Mr. Fillion: No.
[English]
The Chairman: Ms Whelan, can you tell us where you got that recommendation on the AG report?
Ms Whelan: I'm just trying to find it. I don't have the exact page. All I know is that the Auditor General has called for a government-wide strategy to minimize duplication of effort in the area of government operations. I don't have the exact page. Did you want to take a look at it?
[Translation]
Mr. Fillion: If you can find exactly what Ms Whelan just said in the report of the Auditor General, we would then agree to drop our suggestion. But let's make sure first, because I do not have the text right now. However, if it's not included in the Auditor General's report in the same way we are discussing it, we will have to add our suggestion.
The Chairman: Perhaps we could say that the committee fully supports or endorses the Auditor General's statement on... Then we could quote the sentence...
Mr. Fillion: I would prefer that.
The Chairman: ...``the committee fully supports the recommendation made by the Auditor General regarding...'' and we could quote the Auditor General's recommendation.
[English]
Ms Whelan: I'd like to know what it is we're going to quote. Mr. Chairman, I'm maybe confusing two issues here. I hope that's not what I'm doing. So I'd like to know what it is we're going to quote before I agree to quoting something.
[Translation]
The Chairman: You told us that there was a recommendation the Auditor General had made which was basically the same as what's being recommended by Mr. Fillion. We could say that the committee fully endorses the Auditor General's statement.
[English]
Ms Whelan: I'd like to hear Mr. Fillion's recommendation again before, if you could.
[Translation]
Mr. Fillion: Yes.
[English]
Ms Whelan: If I could hear that again, just so I understand.... I don't want to endorse something such that I don't know what I'm endorsing. My recollection is that the Auditor General had called for a government-wide strategy to eliminate duplication in government administration in the areas of research and development activities. Does that cover what he said, or am I missing something?
[Translation]
Mr. Fillion: It's basically the same thing.
[English]
Ms Whelan: It's the same.
[Translation]
Mr. Fillion: But we want to see it included in the report.
The Chairman: Fine. We could say that the committee supports or endorses the Auditor General's statement, and then we could quote him. Good.
Let's get back to the agenda.
.1725
[English]
Ms Whelan: We're not sure on this last one here. There isn't consensus on our side to go ahead with this, based on the fact that (1) we think it's duplication of the Auditor General's report and (2) we aren't sure if we want fully to duplicate what the Auditor General is already saying. So if you want to put it to a vote, we'll vote against it.
[Translation]
Mr. Fillion: I think we should support the Auditor General. If we can find this wording in the report, we should indicate clearly that we support the Auditor General in his recommendation. I don't see what's controversial about that...
The Chairman: The Opposition side wants to support the Auditor General but the other side doesn't agree. So I'll ask for a vote.
[English]
for a paragraph saying we support the Auditor General.
Motion negatived
[Translation]
The Chairman: Let's go back to the three questions. Do you agree to adopt the report, as amended?
I think that there's a consensus that the chair be authorized to make such grammatical and editorial changes as may be necessary, and that the report, as amended, be presented to the House of Commons by the chairman of the committee.
Motion agreed to
The Chairman: We have a few minutes left. We reviewed the six pages of the 9th report, page by page. We had already adopted it in principle, unless... Mr. Fillion, I think you had some changes, didn't you?
Mr. Fillion: Yes.
The Chairman: Regarding the 9th report?
Mr. Fillion: Yes, I have several.
The Chairman: Regarding the 8th and 10th reports, I think you had discussions with the other side. Have you had discussions about the 9th report?
Mr. Fillion: No, we haven't. Maybe we can take time to do that.
The Chairman: We don't have enough time left before our 5:30 meeting, so why don't you meet with the other side and discuss any changes you might have to the 9th report and then we could meet next Wednesday at 3:30?
Mr. Fillion: Okay.
The Chairman: By then, we should have both French and English versions of the consensus and if there is anything on which there is no consensus, it will still be indicated in both languages. Does everyone agree with this?
[English]
Ms Whelan: You are suggesting that we meet before the meeting next Wednesday.
The Chairman: We will proceed in the same way as this week. You will meet Mr. Desautels and Mr. Fillion to discuss their addition to the report.
Ms Whelan: Do you have substantial additions to the ninth report?
Mr. Fillion: Yes.
Ms Whelan: Okay. Mr. Telegdi's not here right now and I don't want to commit to something without -
The Chairman: Who's Mr. Telegdi?
Ms Whelan: Andrew - he is the vice-chair.
The Chairman: The vice-chair?
Ms Whelan: Andrew Telegdi and Mr. Shepherd - they are joint. Isn't that how it works?
Mr. Williams: Maybe you should make the steering committee rather than these two parties getting together without the third.
Ms Whelan: Sure, the steering committee, that's wonderful. I don't have a problem with that. I am not on it.
.1730
[Translation]
The Chairman: I think that we have a consensus. Mr. Williams, you may participate if you wish, but I must be present at several committees and meetings. I would prefer that it not be a meeting of the steering committee as such, but of both vice-chairs, Ms Whelan, yourself, and maybeMr. Fillion with his assistant, Mr. Desautels, if you agree. As for the Bloc, it will be represented by Mr. Fillion as well as Mr. Desautels.
So our next meeting will be on Wednesday at 3:30 p.m., when we shall discuss the ninth report.
The meeting is adjourned.