PACC Committee Report

            The Standing Committee on Public Accounts recommended:

That the Canada Customs and Revenue Agency inform the Investigation and Control Directorate of Human Resources Development Canada of areas in which there is heightened risk of abuse and fraud as identified by its other investigations and enforcement activities.

RESPONSE

The Government agrees with this recommendation.

In accordance with the provision of Subsection 90(1) of the Employment Insurance Act, the CCRA is responsible for issuing rulings on:

-         whether an employment is insurable;

-         how long an insurable employment lasts, including the dates on which it begins and ends;

-         what is the amount of any insurable earnings;

-         how many hours an insured person has had in insurable employment;

-         whether a premium is payable;

-         what is the amount of a premium payable;

-         who is the employer of an insured person;

-         whether employers are associated employers; and

-         what amount shall be refunded under subsections 96(4) to (10).

The CCRA cannot go beyond this authority to conduct nor continue an EI fraud investigation.

Presently, by virtue of the Employment Insurance Act, CCRA Rulings may only report to HRDC on cases for which a ruling has been issued, and rulings can only be made pursuant to a specific request for any of the reasons stated in 90(1). 

CCRA Rulings refers cases that are the subject of a ruling to Trust Accounts for payroll compliance and enforcement when applicable.  If in the course of an examination there is evidence pointing to possible fraud or abuse of the EI system, Trust Accounts will refer the matter to HRDC on behalf of the CCRA.

Subject to existing privacy and confidentiality restrictions, the CCRA is proposing amendments to a Memorandum of Understanding with HRDC to more effectively refer cases of suspected fraud to other areas of the CCRA, namely, the Investigations Directorate (ID), as well as to the HRDC’s Investigation and Control Directorate.

Additionally, CCRA Rulings is currently exploring the possibility of initiating its own rulings cases, while in the process of doing a ruling as a result of a request.  These additional rulings would permit an examination of employment relationships that are not the subject of the initial request and detect suspicious cases.  HRDC would be made aware of the result of these rulings, subject to any privacy and confidentiality restrictions, and could take action, where appropriate. 

HRDC is presently receiving referrals from the CCRA’s Underground Economy group.  The ID has undertaken to emphasize to its field operations that should its investigations impact on deductions at source, and EI issues are involved, the matter should be referred to HRDC.   HRDC has also undertaken to work with ID to verify that a proper referral process is in place.