Analysis of trends in spending and human resources

Actual expenditures 

The actual spending for fiscal year 2016-2017 reflects a significant increase as a result of retroactive payments associated with collective bargaining increases for employees represented by the Public Service Alliance of Canada bargaining unit.

Over the period 2014-2015 to 2019-2020, the CRA's expenditures/appropriations show an increase primarily as a result of funding received to implement and administer various measures announced in the federal budgets, transfers from Public Services and Procurement Canada for accommodation and real property services, wage settlements, as well as increases in the CRA's Statutory Authorities for children's special allowance payments. These increases have been partially offset by known or planned reductions in funding for the upgrade of the individual income tax processing system and the administration of the Softwood Lumber Agreement, 2006, as well as other miscellaneous items such as decreases in Government advertising programs, the transfer of CRA training programs to the Canada School of Public Service, and changes in employee benefit plan rates. 

Actual spending in the 2016-2017 fiscal year includes a significant increase as a result of new funding for measures announced in the 2016 Federal Budget as well as retroactive payments associated with collective bargaining increases for employees represented by the Public Service Alliance of Canada bargaining unit.

Over the planning period (from $4.163 billion in 2017-2018 to $4.182 billion in 2018-2019), the CRA's appropriations show an increase primarily as a result of funding received to implement and administer various measures announced in the federal budgets, adjustments for accommodation and real property services, as well as increases in the CRA's statutory authorities for children's special allowance payments. These increases have been partially offset by decreases in spending of revenues received through the conduct of the CRA's operations for initiatives administered on behalf of the Canada Border Services Agency and the Province of Ontario, as well as reductions in funding for the upgrade of the individual income tax processing system.

Actual human resources

The increase of actual FTEs in 2016-2017 over planned is primarily attributable to the implementation and administration of various measures announced in the 2016 Federal Budget.

The reduction in FTEs over the planning period (from 39,392 in 2017-2018 to 38,995 in 2018-2019) is primarily attributable to decreases in spending of revenues received through the conduct of the CRA's operations for initiatives administered on behalf of the Canada Border Services Agency and the Province of Ontario as well as reductions in FTEs associated with planned investment projects.These decreases have been partially offset by an increase in FTEs associated with various measures announced in the federal budgets.

Expenditure by votes

For information on the CRA's organizational voted and statutory expenditures, consult the Public Accounts of Canada 2017^x.

Alignment of spending with the whole-of-government framework

Financial statements highlights 

The CRA's 2016-17 net cost of operations before government funding and transfers amounted to $4,384.1 million, an increase of $334.8 million from the $4,049.4 million net cost of operations before government funding and transfers in 2015-16.

Personnel expenses (salaries, other allowances and benefits) represent 75% of total expenses and are the CRA's primary costs. The remaining 25% of expenses are comprised of other costs such as information technology (IT) and accommodation expenses.

Personnel costs have increased by $299.7 million or 9% in 2016-17. The CRA has slightly increased its workforce in order to implement the new initiatives announced in Budget 2016, which partly explains the increase in personnel costs. Additionally, the approval of the PSAC collective agreement in October 2016 contributed to the increase with an additional one-time vacation week, a signing bonus and retroactive salary payments that were issued to the represented employees. Increases in salary expenses impacted in turn the cost of health and dental employee benefits, that cost being also subjected to a greater insurance contribution rate in 2016-17.

Non-personnel expenses have increased by $79.2 million or 7% in 2016-17. This variance mainly results from an increase in fit-up cost as part of the workplace renewal strategy ($40.4 million) as well as an increase in IT services provided by Shared Services Canada (SSC)($24.3 million).

Non-tax revenues increased by $44.0 million from the prior year, which is mostly attributable to the invoicing of the retroactive salary payments applicable to the administration of the Canada Pension Plan and the Employment Insurance Act.

Liabilities have increased by $15.3 million in 2016-17. This was attributable in part to an increase in vacation liability due to the new one-time vacation leave introduced in the agreement reached with the PSAC ratified in October 2016. Also attributable to the increase are the provisions for salary increases for expired collective agreements and an increase in accounts payable at year-end for IT services rendered by SSC. This was offset in part, by a decrease in employee severance benefits explained by the termination of the accumulation of accrued severance benefits for the employees under the new PSAC collective agreement.

The increase in financial assets is correlated to specific increases in liabilities, as an account receivable is created for liabilities that are not settled at year-end, but for which appropriations were used. This account receivable, the Due from the Consolidated Revenue Fund (CRF), represents the net amount of cash that the CRA is entitled to draw from the CRF that is administered by the Receiver General for Canada without using further appropriations to discharge its liabilities. It increased by $42.5 million in 2016-17. Salary advances and overpayments arising from the transition to the Phoenix pay system also contributed to the increase in financial assets.