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Response to Parliamentary Committees and External Audits

Response to Parliamentary Committees

[Parliamentary Committees have continually called for improved reporting by departments and agencies in their reports to Parliament on follow-up to committee recommendations. As a result, departments and agencies are encouraged to discuss progress made to address Parliamentary Committee recommendations and provide further information on significant corrective actions achieved.]

1. Government Responses (GR)

Government Responses (GR) are requested by Parliamentary Committees under House of Commons Standing Order 109 or under Rules of the Senate 131(2). Such requests are included in the reports tabled by the respective Parliamentary Committee.

The Minister of National Revenue did not table a GR to a Parliamentary Committee report in fiscal year 2009-2010.

In its Spring 2009 Report, the Office of the Auditor General of Canada included a chapter on “Interest on Advance Deposits from Corporate Taxpayers – Canada Revenue Agency” (Chapter 4). The Standing Committee on Public Accounts (PACP) held a meeting on October 26, 2009 to study this chapter. PACP tabled its Seventh Report on Chapter 4 on April 14, 2010.* A GR was requested in the Seventh Report, and will be presented in fiscal year 2010-2011. Further information on this GR will be included in the Departmental Performance Report 2010-2011 for the Canada Revenue Agency.

(* N.B.: Parliament was prorogued between December 30, 2009 and March 3, 2010).

Please see section 3 for more information.

2. Standing Committee on Public Accounts (PACP)

Follow-up requests from PACP regarding Government Responses (GR) and Other Information

In March 2010, PACP tabled its First Report entitled “Following up on Recommendations made by the Standing Committee on Public Accounts in the 39th Parliament, Second Session”. In that document, PACP explains the process by which it tracks the progress of Government actions, as provided in various GRs to Reports tabled by PACP. Excerpts from PACP’s First Report explain its approach and should provide context for the impacts on CRA reporting:

“[PACP] has a mandate to examine the reports of the Auditor General, the Public Accounts of Canada, and the management and performance of the Office of the Auditor General (OAG) … [PACP] has the power to hold hearings on the subjects within its mandate and subsequently present a report to the House of Commons on its findings. As most of the Committee’s reports contain recommendations to the government, the Committee usually requests a response from the government, which must be tabled in the House within 120 days. …Issuing a report with recommendations and asking for a government response serve to highlight specific issues and add a parliamentary voice to further encourage government action to address problems raised by the OAG ... [PACP] decided to develop and implement a process to follow-up on its recommendations. Such a process keeps the Committee aware of the progress being made in specific areas and helps to ensure the Committee’s recommendations are taken seriously by the government and are not ignored once the Committee’s report is presented to the House … It is the Committee’s intention that this will be an annual process.”

Please note that the 39th Parliament, 2nd session referred to in the above-noted report corresponds to the period October 16, 2007 to September 7, 2008. No follow-up requests were received in fiscal year 2009-2010 with respect to reports or responses originally tabled in the 39th Parliament, 2nd Session, or the 40th Parliament (please see Section 3. Reference to the CRA in Committee Reports’ for further information.)

PACP Requests for Departmental Action Plans and Progress Reports

On March 25, 2010, PACP adopted a motion requiring departments and agencies that have been subject to a performance audit by the Office of the Auditor General of Canada to provide the Committee with their action plans to address the audit recommendations which have been agreed to.

As noted in the Departmental Performance Report 2008-2009 for the Canada Revenue Agency, the CRA was the subject of several chapters contained in various Auditor General Reports tabled in 2008-2009. However, given the timing of the adoption of the original motion (March 5, 2009, and an amendment to the original motion on October 28, 2009), and given that the motion was made retroactive to the Auditor General Report of December 2008, action plans were available for submission to PACP only in fiscal year 2009-2010.

The following Action Plan was presented to PACP on October 25, 2009:

• Relating to the study of Chapter 4, Interest on Advance Deposits from Corporate Taxpayers – Canada Revenue Agency of the Spring 2009 Report of the Auditor General of Canada (CRA officials appeared before PACP on October 26, 2009).

The following Action Plans were provided to PACP on November 13, 2009:

• In respect of Chapter 6, Use of New Human Resources Authorities – Canada Revenue Agency of the December 2008 Report of the Auditor General of Canada (no Committee study).
• In respect of Chapter 5, Managing Information Technology Investments – Canada Revenue Agency of the December 2008 Report of the Auditor General of Canada (no Committee study).
• In respect of Chapter 3, Auditing Small and Medium Enterprises – Canada Revenue Agency of the 2009 Status Report of the Auditor General of Canada (no Committee study).
• In respect of Chapter 3, Health and Safety in Federal Office Buildings of the Spring 2009 Report of the Auditor General of Canada (no Committee study).

The following Action Plan was provided to PACP on March 22, 2010:

• Relating to the study of Chapter 3 Income Tax Legislation of the Fall 2009 Report of the Auditor General of Canada (CRA officials appeared on March 23, 2010).”

3. Reference to the CRA in Committee Reports

In 2009-2010, various Parliamentary Committees did table reports wherein the CRA is mentioned. These include:

Standing Committee on Finance (FINA)

FINA undertook a study of the treatment and characterization of Personal Services Businesses. The Committee met to study this topic on December 3, 2009. CRA officials were invited to appear. Due to the prorogation of Parliament, FINA tabled its report on June 10, 2010, entitled “Servant or Master: Differing Interpretations of a Personal Services Business”. FINA has requested a GR to its recommendations. As the Report was tabled in fiscal year 2010-2011, and the GR will be presented in fiscal year 2010-2011, further information will be included in the Departmental Performance Report 2010-2011 for the Canada Revenue Agency.

Standing Committee on Veterans Affairs (ACVA)

On June 17, 2009, ACVA tabled a report entitled “Shared Experiences: Comparisons of Veterans Services Offered by Members of the Commonwealth and the G8”. The report contained a recommendation for Veterans Affairs Canada (VAC) which made reference to the CRA. A GR was tabled by the Minister of Veterans Affairs on October 19, 2009.

The Standing Committee on Public Accounts (PACP)

Eleventh Report (The Public Accounts of Canada 2007) – Tabled March 5, 2008

Recommendation 2: “The Canada Revenue Agency modify its tax revenue estimation methodology by 30 September 2008. If this cannot be done by this date, the Canada Revenue Agency should explain to the Public Accounts Committee the reasons for the inability to meet this deadline and provide the Committee with a date by which this modification will be done.”

http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3320946&Language=E&Mode=1&Parl=39&Ses=2

Government Response (presented July 16, 2008, by the President of the Treasury Board)

On March 29, 2010, PACP’s First Report “Following up on Recommendations made by the Standing Committee on Public Accounts in the 39th Parliament, Second Session” was presented in Parliament. It included an assessment by PACP as to whether or not the specific recommendation was adequately addressed in the GR. On page 102, PACP considers this recommendation to have been addressed.

Sixth Report – Public Accounts of Canada 2008 – Tabled March 24, 2009

Recommendation 1: “That the Canada Revenue Agency provide the Public Accounts Committee a detailed plan with timelines by 31 May 2009 of how it will improve its methodology to calculate the allowance for doubtful tax receivables.”

http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3731039&Language=E&Mode=1&Parl=40&Ses=2

Government Response (presented August 19, 2009, by the President of the Treasury Board)

Auditor General – Fall 2009 Report – Chapter 3 – Income Tax Legislation

On March 23, 2010, PACP held hearings on its study of this chapter. On April 28, 2010, PACP tabled its report and recommendations. A Government Response is expected. As the Report was tabled in fiscal year 2010-2011, and the Government Response will be presented in fiscal year 2010-2011, further information will be included in the Departmental Performance Report 2010-2011 for the Canada Revenue Agency.

Response to the Auditor General

2009 Spring Report of the Auditor General of Canada (Tabled in May 2009)

Chapter 3 – Health and Safety in Federal Office Buildings

http://www.oag-bvg.gc.ca/internet/English/parl_oag_200905_03_e_32516-eng.html

Chapter 4 – Interest on Advance Deposits from Corporate Taxpayers – Canada Revenue Agency

http://www.oag-bvg.gc.ca/internet/English/parl_oag_200905_04_e_32517-eng.html

2009 Fall Report of the Auditor General of Canada (Tabled in November 2009)

Chapter 3 – Income Tax Legislation – Department of Finance Canada and Canada Revenue Agency

http://www.oag-bvg.gc.ca/internet/English/parl_oag_200911_03_e_33204-eng.html

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