2015-16 Departmental Performance Report

Section 3 Analysis of Programs and Internal Services

Taxpayer and Business Assistance

The Taxpayer and Business Assistance Program is committed to providing taxpayers with the accurate and timely information they need to comply with Canada's tax laws. Our website provides detailed information about CRA programs, including information on charities and giving, as well as information on services for individuals, families, businesses, and representatives. Taxpayers with more complex information needs can contact our call centres, refer to our technical interpretations, or consult our advance rulings services. To support taxpayers, we monitor charities and administer registered plans to ensure they meet legislative requirements.

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This image is a graphic representation using circles and connecting lines to show the relationships that exist regarding performance indicators, expected results, actual results, and targets. Two examples are given.

The first involves the performance indicator "Percentage of service standard targets that are met for individual and business enquiries" (Footnote 1) with the expected result that "Taxpayers and businesses have access to the information and services they require to voluntarily comply with tax laws". The target listed is 100% and the actual result is 57.1%. (Footnote 2)

The second example concerns the performance indicator "Percentage of charity, registered plans and commodity audits completed compared to planned" with the expected result that "Organizations and businesses administering or producing registered plans, charities, and excise dutiable-products are compliant with applicable legislation". The target listed is 100% and the actual result is 94.7%.

Footnote 1
Details on our service standards start on page 162

Footnote 2
This performance measure includes multiple performance indicators associated to enquiries within the program. The following three out of the seven service standards used to calculate this result weren't met: GST/HST rulings and interpretations-written enquiries; Charities-written enquiries (routine); and Charities-written enquiries (complex). Some service standards were not met as the result of organizational transitions, creating a temporary reduction in operational capacity. See page 162 for more information on these service standards.

The CRA is making it easier and more convenient than ever before for individuals and businesses to comply with their tax obligations. The Agency is responding to Canadians' expectation to access tax and benefit information through a variety of means and when it is convenient for them. Increasingly, Canadians are seeking information through videos on the CRA's branded YouTube channel, or through messages from the Agency's Twitter account @CanRevAgencyvii. In response the CRA continues to expand its use of social media tools so it can better serve taxpayers who favour these forms of communication. By satisfying the information preferences of taxpayers, the Agency supports self-service, self-assessment, and compliance.

The CRA website continues to be the mainstay of our communication efforts. Each year, we have more than 180 million visits to www.cra-arc.gc.caviii. We provide taxpayers with the option to get expertise and guidance through our telephone services, our technical interpretations, and our advance rulings services.

CRA Website and Social Media Initiatives

The CRA's website strives to provide timely, accurate, and relevant information to Canadians who prefer to look online first to find the answers to their questions. The website is structured around four main categories: individuals and families, businesses, charities and giving, and representatives. It provides information on a wide variety of topics, and people are just a few clicks away from downloading most of the forms or publications they need regarding their tax obligations or their benefit eligibility. We update our webpages regularly to add new content or to improve navigation and clarity of information. We also use web analytics to help us understand how Canadians use the site, and to assess and improve its effectiveness.

Through the website, the Agency maintains and provides hundreds of different forms and publications, and more than 20 million copies of these documents are downloaded annually. Moreover, access to the information on our website is available 24 hours a day and is continually kept up-to-date. As part of our efforts to make access to our information as convenient as possible, the Agency's website is designed to display on any electronic device, whether it be smartphone, tablet, or desktop computer.

The CRA continues to play a prominent role in the Government-wide Web Renewal Initiative. This initiative is a project to develop Canada.ca, one website for the Government of Canada. During 2015-2016, the Agency helped to develop the governance and publishing models, user-experience testing, information architecture, and technical requirements for Canada.ca.

Throughout the year, the Agency continued to expand its use of social media. For example, our tweets began to include media, such as video, to promote CRA services. This contributed to a 40% higher rate of engagement with our Twitter followers over the previous year. Meanwhile, the CRA launched a video series in Spanish, Punjabi, Cantonese, Arabic, and Cree on its YouTube channels.

The CRA also continued to promote awareness of the Voluntary Disclosures Program (VDP) through its website, a promotional video, tweets, tax tips, and stakeholder messaging. In 2015-2016, there were about 160,000 viewings of the VDP video, "Making Things Right," an increase of 53% over the previous year.

Key results

  • We received over 184 million visits to our website.
  • Close to 20 million forms and publications available on the website were downloaded.
  • We posted 33 new or updated videos between April 2015 and March 2016. The 105 videos on our YouTube channels were viewed 105,145 times.

External Administrative Correspondence

In 2015-2016, the CRA sent out approximately 106 million pieces of correspondence, including notices, statements, and letters. During the reporting year, the External Administrative Correspondence initiative delivered significant changes to the design, tone, and structure of correspondence in both paper and electronic formats. By using plain language, we simplified the Agency's correspondence, making it easier for Canadians to understand their tax obligations.

Through a coordinated approach within the Agency, we successfully launched the revised T1 notice of assessment, as well as a revised T1 notice of reassessment, in February 2016. By the end of the 2016 filing season, it was estimated approximately 28 million individual notices of assessment/ reassessment had been issued in the new, simplified format.

The revised notices are just the beginning. Over the next few years, more of the CRA's correspondence with taxpayers and benefit recipients will be simplified, with changes being made to the structure, design, and format, and with the use of plain language throughout. The External Administrative Correspondence initiative represents our commitment to improving service to Canadians. Making the information we provide easier to read and to understand is a significant part of that service goal.

Improved notice of assessment

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This image is of the revised notice of assessment that the Canada Revenue Agency began sending out in February 2016. It includes four notes explaining how the notice's contact information, account details, key information, and account summary are simplified and easy to understand. The four notes read:

1. Contact info – Appears in the top left corner

2. Notice Details – Organized so you can easily identify your notice details

3. Key info – Provides your most important information and if any actions are required

4. Account summary – Provides you with a status of your account and useful tips

Previous Form

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Telephone Programs

The CRA's call centres handle millions of tax enquiries every year and remain a key channel for providing service to taxpayers. As part of its commitment to continually improve service response time and overall service to taxpayers, the Agency continued to upgrade and standardize its telephony infrastructure across all CRA call centres. In addition, efficiency improvements were gained by readjusting where and how calls are transferred to agents who handle complex phone enquiries.

Enhanced procedures were also put in place at call centres to improve the timeliness of telephone assistance provided to tax preparers. Consultations with representatives of this group were held throughout 2015-2016, which led to the establishment of the new procedures. Tax preparers with questions on selected topics are now able to be fast-tracked directly to an agent with the expertise to answer their questions.

Key results

  • We answered 17.9 million tax calls through agents and automated services.
  • We met our service standard target for timeliness by answering calls within two minutes 81% of the time for individual and business enquiries.

Outreach

The CRA identifies and works with taxpayers most likely to benefit from more targeted interaction, ranging from individuals, to small- and medium-sized businesses, to Indigenous peoples, seniors, persons with disabilities, newcomers to Canada, and youth.

In 2015-2016, we promoted the Agency's products, services, and programs. Efforts included webinars for small businesses and the production of multi-language documents for Canada's diverse communities.

As part of our commitment to improve service to Canadians, we also continued to offer support to those who are unable to complete their tax obligations on their own, specifically through the Community Volunteer Income Tax Program (CVITP). The CVITP offers free clinics to help prepare income tax and benefit returns for eligible individuals, particularly modest-income Canadians and those on fixed incomes, whose financial situation is unchanged year-to-year. More funding has been allocated to the CVITP to expand and strengthen its services. The funding will allow for increased promotion of the CVITP to other organizations, and will enable the CRA to provide enhanced training and support for first-time community organizations who want to host clinics.

Key results

  • CVITP assisted 692,434 individuals.
  • CVITP helped complete 749,963 tax returns.

Registered Plans

Registered plans are an important financial tool for many Canadians. Through tax exemptions, incentives, and deferrals, the Government of Canada encourages and helps Canadians to save for education, disability, and retirement. The CRA registers and monitors deferred-income and savings plans like employee pension plans, retirement savings plans, education savings plans, disability savings plans, and tax-free savings accounts. We ensure the integrity of the deferred-income and savings plans sector in Canada by promoting compliance with legislation through a combination of outreach, education, and compliance activities.

In 2015-2016, about $2.83 trillion in assets was held in deferred-income and savings plans. During the reporting period, the CRA launched a successful campaign to increase the electronic filing of registered retirement savings plans (RRSPs) contract listings to 97%. We also expanded our capacity to communicate with clients electronically with a view to making it possible to send all forms for registered plans electronically. The resulting improved data analytics increases program efficiency and the ability to assess compliance risk.

Key results

  • We responded to 61% of written enquiries for deferred-income plans within 60 days.
  • We reviewed 87% of the applications to register pension plans within 180 days.
  • We approved 87% of requests for eligible contributions within 270 days.
  • We did 311 audits of registered plans.

Rulings

Voluntary compliance depends on understanding tax laws, regulations, and obligations. The CRA plays an essential role in promoting compliance by providing up-to-date technical publications, interpretations, and rulings. This information helps Canadians appropriately plan, report, and pay their taxes. It also provides certainty to taxpayers, tax professionals, and industry associations.

The CRA's Rulings experts provide technical guidance and assistance to other CRA programs. In 2015-2016, the CRA's focus was on detecting, deterring, and taking action against aggressive tax planning and tax evasion. Many initiatives supported this objective. We situated senior technical officers in satellite offices in certain major cities. We also created a working group of technical income tax experts and large case file managers to identify new sources of technical support during the audit process. Giving large-case auditors, who encounter highly complex issues, greater access to technical income tax experts supports the CRA's compliance-enforcement efforts.

In support of our commitment to service and to make it easier to comply with tax obligations, in 2015-2016 the CRA began accepting online requests for GST/HST rulings or interpretations, meaning taxpayers get certainty more quickly. A new model the CRA developed last year to manage the inventory of written requests for GST/HST rulings and interpretations will contribute to further program improvements.

Technical interpretations and rulings

A technical interpretation provides the CRA's interpretation of Canadian tax law. A ruling is binding and confirms the CRA's interpretation of how the law applies to a specific transaction.

Key results

  • We improved service to taxpayers and other stakeholders by providing more timely advanced rulings.
  • We received over 800,000 site visits to the newly published, web-friendly income tax folios.
  • We received over 1,135,000 site visits to GST/HST technical publications, including technical information made available by the effective date of a change in legislation.
  • We provided 2,468 GST/HST rulings and interpretations.
  • We provided 2,208 income tax technical interpretations.
  • We provided 184 advance income tax rulings.
  • We completed 43,997 CPP/EI rulings.
  • We responded to 90,987 GST/HST technical telephone enquiries.

Charities

The Government of Canada is committed to meaningful engagement with the charitable sector, which makes a valuable contribution to the social well-being of Canadians and to public policy and debate. The Minister of National Revenue is working with the Minister of Finance and the Minister of Families, Children and Social Development to modernize rules, strengthen the sector, and encourage charities to continue this important work.

The CRA is responsible for contributing to the integrity of this sector by registering and monitoring charities. The review of registered charities' political activities began to wind down during the reporting period. The audits done as part of this initiative showed charities to be largely compliant with the rules regarding their involvement in political activities. In consultation with the Department of Finance Canada, we developed a proposed strategy, including discussions with stakeholder groups and an online consultation, for engaging with charities to clarify the rules about political activities.

To support the Government's broader commitment to openness and transparency, in 2015-2016, we undertook to develop a new annual report to the charitable sector and to the public. This report will explain how the CRA's activities contribute to being an effective regulatory framework for charities. Throughout the year, we continued to meet with charities, stakeholder groups, and sector representatives for constructive discussions on key issues affecting the charitable sector and the CRA as regulator.

Extradition to Canada for tax fraud

September 8, 2015 – Ottawa, Ontario – A former resident of Vaughn, Ontario, was extradited to Canada from Italy and is now in custody serving a 10-year sentence for tax fraud. She was also ordered to pay a fine of $699,608 for causing her company to fail to report income received from the tax evasion scheme it promoted.

The former tax preparer fraudulently claimed carrying charges and charitable donations totalling $58,500,000 in 4,200 tax returns prepared on behalf of her clients. The false claims inappropriately reduced the amount of federal taxes owed by over $10 million.

Key results

  • We provided timely response to applications for charitable registration: 88% of simple applications were answered within two months, and 86% of regular applications were answered within six months. We surpassed our target of 80% in both instances.
  • We processed 87,461 registered charity information returns.
  • We audited 726 charities, including all those known to be participating in gifting tax shelters.
  • Some service standards were not met as the result of organizational transitions, creating a temporary reduction in operational capacity.

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This image depicts two columns providing financial and human resources numbers associated with the CRA's taxpayer and business assistance programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
280,181,661

Total authorities
428,549,814

Planned (Footnote 1)
280,181,661

Actual (Footnote 2)
418,438,658

Difference (Footnote 3)
(planned minus actual)
(138,256,997)

The column on the right, under the heading Human Resources (FTEs) (Footnote 4), provides the following information from top to bottom:

Planned
3,780

Actual
3,924

Difference
(planned minus actual)
(144)

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Increase primarily due to higher than planned statutory payments related to the Canada/US softwood lumber agreement.

Footnote 4
Includes FTEs associated with fulfilling the CRA’s administrative responsibilities in support of Canada Pension Plan and Employment Insurance legislation.

Assessment of Returns and Payment Processing

The Assessment of Returns and Payment Processing Program assesses and processes tax returns and payments for individuals and businesses as quickly and accurately as possible, providing taxpayers with early certainty to help them manage their tax affairs with confidence. We aim to reduce red tape by providing streamlined and timely services to individuals and businesses while securing Canada's revenue base.

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Image description

This image is a graphic representation using circles and connecting lines to show the relationships that exist regarding performance indicators, expected results, actual results, and targets.

The example given involves the performance indicator "Percentage of service standards targets that are met relating to timeliness of processing for individual, business and GST/HST returns" (Footnote 1) with the expected result that "Individuals, businesses and registrants are provided timely and accurate tax assessment notices and tax payment processing". The target listed is 100% and the actual result is 100% (Footnote 2).

Footnote 1
Details on our service standards start on page 162.

Footnote 2
This performance measure includes multiple performance indicators associated to timeliness and accuracy within the program. Since all performance indicators met their individual target, an overall result of 100% is achieved.

The CRA assesses and processes tax returns, information returns, and payments for individuals and businesses. We focus on making it easy to meet filing, reporting, and payment obligations by offering an expanding suite of secure and easy-to-use services. We review the information we receive for errors and adjust tax returns for individuals and businesses. We also detect non-compliance through risk assessment and third-party data matching. These activities support the assessment of tax returns from beginning to end and allow people to manage their tax affairs with confidence.

The work of this program reflects many aspects of the mandate of the Minister of National Revenue, specifically priorities related to improving service delivery so that people who interact with the CRA feel like valued clients, not just taxpayers. In our self-assessment tax system, this focus on service is paramount.

Service enhancements

Responding to the increased desire of Canadians to interact digitally, we continue to enhance and expand our digital offerings to make it easier for everyone to meet their tax obligations. In 2015-2016, we launched the e-Interactions Strategy and Roadmap to clearly articulate our plan for full digital interaction by 2020.

Many of our digital services can be accessed through our My Account, My Business Account, or Represent a Client services. Individuals, businesses, and representatives logged into these digital services more than 34 million times during 2015-2016 to view and manage individual or business tax affairs. We continued to enhance these services with options for easy and secure interactions.

In 2016, we began accepting certain T3 trust returns through our secure Internet File Transfer (XML) service, increasing the processing efficiency and decreasing the processing time for these returns. We are exploring options for trust administrators and their representatives to file other T3 returns electronically in the future.

laptop computer with a large padlock sitting on top of the keyboard
Auto-fill my return

A highlight of our digital enhancements in 2015-2016 was the expansion of the Auto-fill my return service to NETFILE. This service allows authorized representatives, and now individuals, to access certain tax information the CRA already has on file and automatically complete parts of an individual income tax and benefit return when filing online using certain certified tax preparation software. This service has been well received and was successfully used to complete more than 5.5 million individual returns as of July 31, 2016.

"The Government of Canada is committed to providing client-focused service to Canadians during the taxfiling season and beyond. I am pleased to report that over 5 million Canadians took advantage of the Canada Revenue Agency's Auto-fill my return service, one of many new or improved online service options offered by the Agency to ease the filing burden for taxpayers."

— The Honourable Diane Lebouthillier, P.C., M.P., Minister of National Revenue

Submit documents

The Submit Documents service provides the option to send more information electronically for CCP/EI rulings, disability tax credit, GST/HST returns and rebates, business authorization requests, T3 adjustments, as well as validation and compliance. There has been a steady increase in the use of this service with almost 485,000 submissions sending over 900,000 documents in 2015-2016. In certain instances, documentation can also be sent proactively, without a case or reference number. For example, the Voluntary Disclosures Program was added to the Submit Documents service in 2015 so that taxpayers and representatives can send voluntary disclosures and requests for information through My Account, My Business Account, or Represent a Client.

Three file folders superimposed over an image of a laptop computer
Online mail

Online mail allows people to receive an email when new mail is available to view in My Account and My Business Account, which saves the added effort of having to log in and check when waiting for correspondence such as notices of assessment and reassessment, tax-free savings account letters, and individual tax adjustment letters. In addition, the View Mail service gives individuals, businesses, and their authorized representatives the ability to view all online mail in one location. In 2015-2016, over 2.4 million individuals, businesses, and e-filers were registered for Online mail and 3.5 million pieces of correspondence were issued electronically.

MyCRA mobile app

In 2015-2016, we continued to make improvements to the MyCRA mobile app where individuals can securely view key portions of their tax information through their mobile device, such as notices of assessment, tax return status, registered retirement savings plan deduction limit, and tax-free savings account contribution room. Over the year, we also added the ability to start or update direct deposit, update address and phone number information, register for and update online mail notifications, and view Home Buyers' Plan and Lifelong Learning Plan balances.

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Image of MYCRA mobile app

This image is of an advertising poster for the MyCRA mobile app. It includes five notes explaining each of the five main features of the mobile app. The five main features are My tax information, My Payment, Benefit payment dates, Help with my taxes, and Charity information. The five notes read, respectively:

- Check the status of your return

- View your notice of assessment

- Check your RRSP and TFSA contribution limits"

- Make a payment directly to the CRA using Interac® Online"

- View the dates of your last and next benefit payments"

- Look up tax software or EFILE tax professionals

- Find volunteer tax preparation clinics"

- Calculate your tax credit using our charitable donation tax credit calculator

- Check the status of a charity"

The bottom of the poster image explains how to acquire the MyCRA mobile app. There are two bullet points, which read:

Go to cra.gc.ca/mobileapps and select "MyCRA"

Add a shortcut to your device's home screen for quick and easy access wherever you go!

Payment options

We processed nearly 38 million payments, totalling over $485 billion in 2015-2016, 76% of which were processed electronically. We added new payment options, including pre-authorized debits for GST/HST NETFILE. The My Payment service was updated to allow access for VISA Debit cardholders. In addition, there is now an option to set up a one-time or recurring debit using the pre-authorized debit option through My Account.

Processing returns

Once filed, we process returns and carry out activities to detect non-compliance. We assess and validate the information provided, make adjustments where necessary, and advise individuals and businesses of any changes. In 2015-2016, we processed 31 million income tax returns and assessed over $2.6 billionFootnote 1 in additional taxes owing by verifying claims for errors, reviewing high-risk claims, and matching the information in filed returns to third-party data.

Key results

  • 84.7% of individual returns were filed electronically for the 2016 filing season.
  • 76% of payments were received electronically (including payments remitted at financial institutions) for 2015-2016.
  • We processed 28.7 million income tax returns for individuals.
  • 28 million logins were made to My Account by individuals and representatives.
  • 60.5% of T1 refunds were made by direct deposit.
  • More than 1.1 million individuals newly enrolled in My Account.
  • Representatives accessed close to 11.6 million individual accounts through Represent a Client.
  • We reviewed 309,961 individual returns, and taxpayers received beneficial adjustments to their tax returns in excess of $119.4 million.
  • 88% of corporation income tax returns were filed online.
  • Over 6.3 million logins were made to My Business Account by owners and representatives.
  • 120,405 new business owners enrolled in My Business Account. Close to 2.7 million businesses are now registered..
  • Representatives accessed over 5.9 million business accounts through Represent a Client.
  • We responded to 8,030 business enquiries online.
  • 83.6% of GST/HST returns were filed online.
  • We identified more than $130.7 million in additional taxes owing on corporation income tax returns.

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This image depicts two columns providing financial and human resources numbers associated with the CRA's assessment of returns and payment processing programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
614,590,330

Total authorities
643,991,825

Planned (Footnote 1)
614,590,330

Actual (Footnote 2)
606,377,627

Difference
(planned minus actual)
8,212,703

The column on the right, under the heading Human Resources (FTEs) (Footnote 3), provides the following information from top to bottom:

Planned
6,415

Actual
5,967

Difference
(planned minus actual)
448

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Includes FTEs associated with fulfilling the CRA’s administrative responsibilities in support of Canada Pension Plan and Employment Insurance legislation.

Benefit Programs

The Benefit Programs help many Canadians who depend on benefit payments for a significant part of their household income. The CRA administers a range of ongoing benefits and one-time payment programs on behalf of the provinces and territories and the federal government, such as the Canada child tax benefit, the GST/HST credit and the universal child care benefit. We ensure that the right benefit payment is made to the right individual at the right time and give recipients accessible information and timely responses to their enquiries.

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This image is a graphic representation using circles and connecting lines to show the relationships that exist regarding performance indicators, expected results, actual results, and targets.

The example given involves two performance indicators and one expected result. The expected result is "Benefit recipients are provided timely and accurate eligibility determinations and payments,and have access to timely and accurate information"

The first performance indicator concerns "Percentage of service standards targets that are met relating to Benefits administration and enquiries" (Footnote 1). The target listed is 100% and the actual result is 100% (Footnote 2).

The second performance indicator concerns "Payment accuracy after application processing and account maintenance transaction". The target listed is 98% and the actual result is 98.3%.

Footnote 1
Details on our service standards start on page 162.

Footnote 2
This performance measure includes multiple performance indicators associated to enquiries within the program. Since all performance indicators met their individual target, an overall result of 100% is achieved.

The CRA provides Canadians with the benefits for which they are entitled. We work to achieve the Minister of Revenue's commitment to proactively contact Canadians who are entitled, but are not receiving, tax benefits. A significant deliverable toward this goal was the 2015-2016 launch of the child and family benefits calculator. This tool allows an individual to enter information about themselves and their family to see what benefits they may be eligible to receive and how much their payments may be.

We deliver a range of ongoing benefits and one-time payment programs such as the GST/HST credit, the disability tax credit (DTC), and child benefit programs, on behalf of the provinces and territories, as well as federal departments. By providing accessible information and timely responses to benefit recipients by mail, telephone, and digital services, we help to make sure the right benefit payment is made to the right individual at the right time.

Program Administration

Millions of Canadians depend on the benefit and credit programs administered by the CRA on behalf of the provinces and territories and the federal government. Over the last year, we worked with many partners to improve the delivery of benefit programs across Canada. Among the improvements in 2015-2016 were enhancements to the universal child care benefit (UCCB) program to include a new benefit to parents of children aged 6 through 17. This change resulted in 2.2 million additional UCCB recipients.

We also introduced automatic enrollment for the GST/HST credit. To simplify the application process, recipients of the GST/HST credit and related provincial tax credit programs no longer need to apply for this credit. Eligibility is automatically determined when individuals file their income tax and benefit return for 2014 and later tax years.

Additionally, we worked with British Columbia to implement the early childhood tax benefit, which pays a non-taxable amount to help qualifying families with the cost of raising children under the age of six. This benefit is combined with the Canada child tax benefit (CCTB) to provide one monthly payment to recipients.

Key results

  • We administered 147 federal, provincial, and territorial benefit and credit programs and services.
  • We reviewed 315,360 accounts based on our risk assessments, and 64.4% of the files reviewed had to be adjusted.
  • We processed 1,022,005 account maintenance adjustments to GST/HST credit accounts, because of changes to recipient family situations such as a change in income, marriage, or a child turning 19.
  • We issued 99.99% of Canada child tax benefit payments on time.
  • We made more than 137 million payments to 13 million benefit recipients.
  • We paid close to $29 billion in benefit payments.

Digital Services

Our secure digital services make it easier for benefit recipients to manage their account details from the beginning to the end of the process. In response to the increasing digital needs and expectations of Canadians, we continued to increase the options available for benefit programs in 2015-2016, including:

  • Enhancement of the MyCRA mobile app to let individuals view personalized benefits information, including the status of their CCTB application and information about children under their care.
  • Removal of more barriers to electronic filing and making it easier to claim the disability tax credit:
    • introduction of a fillable online application form
    • addition of a tick box, to make it easier to ask for reassessments for previous year claims
  • Ability to quickly respond electronically to requests for more information using the Submit Documents service.
  • Continued expansion of the Automated Benefits Application service to allow participating provinces and territories to offer a quick, easy, secure way to apply for all child benefit programs. Saskatchewan began using this service in 2015-2016, which marks all 10 provinces being part of the service. The Agency is working toward bringing the three territories on board.

To complement the cycle of end-to-end digital services, we have seen a steady increase in benefit recipients opting to receive payments through direct deposit. This is a fast, easy, and secure way for Canadians to receive their payments on time. In 2015-2016, we proactively applied existing direct deposit banking information on file to the UCCB payments of certain benefit recipients. With an option to opt-out of the automatic application, this initiative resulted in the conversion of over 611,000 benefit recipients.

Key results

  • We made 78.5% of benefit payments by direct deposit. 
  • The benefits page in My Account registered 4.9 million visits.

Benefit Enquiries

For a variety of reasons, some Canadians prefer to pick up the phone and call the CRA for their benefit enquiries, and we commit to continue improving our telephone services to meet the needs of this population. In 2015-2016, we continued a pilot to enhance first-call resolution by merging the CCTB and GST/HST credit lines with a view to provide a one-stop service for people who would like to discuss more than one type of benefit payment during the same call. As a result of this initiative, callers no longer have to call two different lines and repeat the effort of providing their personal information and repeating their enquiry. The pilot has received positive feedback and will be permanently implemented in 2016-2017.

Key results

We answered 6.6 million calls on our benefit enquiries line in 2015-2016.
We met our service standard target for timeliness by answering calls within two minutes 76% of the time for Canada child tax benefit and GST/HST credit enquiries, surpassing our goal of 75%.

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Image description

This image depicts two columns providing financial and human resources numbers associated with the CRA's benefit programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
375,217,640

Total authorities
469,297,374

Planned (Footnote 1)
375,217,640

Actual (Footnote 2)
449,400,252

Difference (Footnote 3)
(planned minus actual)
(74,182,612)

The column on the right, under the heading Human Resources (FTEs) (Footnote 4), provides the following information from top to bottom:

Planned
1,508

Actual
1,287

Difference (Footnote 5)
(planned minus actual)
221

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Increase is due to higher than planned statutory Children’s Special Allowance payments as a result of the implementation of EUCCB in July 2015. The enhancements to UCCB were not announced until after the 2015-2016 forecasts for CSA had been submitted, and the new program increased the amounts paid on behalf of children in the program.

Footnote 4
Includes FTEs associated with fulfilling the CRA’s administrative responsibilities in support of Canada Pension Plan and Employment Insurance legislation.

Footnote 5
Decrease primarily due to first call resolution efforts related to benefit enquiries where the Taxpayer Services – Enquiries and Information Products subprogram began to resolve benefit enquiries at the first point of contact when there was also a tax related issue or question. This resulted in workload transfers to the Taxpayer and Business Assistance Program.

Reporting Compliance

The Reporting Compliance Program seeks to protect the integrity of Canada's voluntary compliance system by identifying and addressing the small segment of the population that does not report the correct amounts. Our compliance interventions follow an escalating approach that moves from influencing compliance to enforcing it. We seek to influence compliance attitudes by increasing taxpayers' understanding of their tax obligations through targeted outreach activities, client service, and education. We also undertake examinations, audits, and investigations at the domestic and international level to ensure compliance with Canada's tax laws.

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This image is a graphic representation using circles and connecting lines to show the relationships that exist regarding performance indicators, expected results, actual results, and targets.

The example given involves the performance indicator "Change rate (percentage of risk-assessed audit activities that result in detection of non-compliance by individuals and corporations)" and the expected result is "Reporting non-compliance is detected and corrected by targeting compliance actions through effective risk assessment".

The target listed is 75% and the actual result is 77%.

International and Large Business

Increases in international trade and globalized investment flows have resulted in complex multinational corporate structures, use of offshore jurisdictions of concern, and profit-shifting schemes. These challenge tax administrations around the world. The CRA's plan to effectively target non-compliance in this challenging globalized tax environment includes resource allocation appropriate to the risk, better access to and use of information, and international co-operation.

Of the $12.7 billion the CRA assesses annually through audits, about two-thirds (over $7.9 billion) involves our international business, large business, offshore, and aggressive tax planning programs. In 2015-2016, our specialized auditors reviewed 15,864 international and large business files. These reviews protect Canada's revenue base from aggressive tax-planning arrangements and from those transactions businesses may engage in to avoid paying Canadian taxes.

Transfer pricing—prices for cross-border sales within a multinational group of companies.

Transfer prices become a tax issue when they diverge considerably – either by accident or by design – from arm's length prices. This can result in the misallocation of profits to Canadian entities of multinational groups, which can significantly impact Canada's tax base.

In 2015-2016, the CRA carried out significant international examinations and made transfer pricing tax adjustments to the highest risk cross-border transactions. Included in these adjustments were transfer pricing penalties totalling approximately $194 million.

A new era of international transparency is an important game changer for tax administrations. Developments in the reporting period related to exchanges of information, particularly with international partners, gave the CRA new tools and mechanisms to tackle international tax evasion and aggressive tax planning. Through the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC), the G8, and the G20, the CRA is working to address tax avoidance and aggressive tax planning. This international collaboration includes coordinating next steps related to information disclosed in the Panama Papers, which describe intricate, multilevel, and multi-national corporate structures created in specific jurisdictions. All cases of high risk non-compliance are being flagged and reviewed further to ensure the appropriate amount of taxes has been paid.

When multi-national enterprises shift taxable profits away from the jurisdictions where the underlying economic activity has taken place, it erodes the tax base. In 2015, Canada and its G20 partners endorsed the recommendations of the G20/Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) project. This project identifies domestic and international recommendations to address tax avoidance and ensures profits are taxed where economic activities occur. In 2015-2016 the CRA:

  • collaborated to strengthen transfer pricing documentation with country-by-country reporting for large multi-national enterprises—including combined amounts of revenue, profit, taxes paid and accrued, number of employees, state capital, retained earnings, and tangible assets for each tax jurisdiction;
  • participated in international work to develop a multilateral instrument to address treaty abuse, an important tool to help Canada's efforts to promote compliance and minimize opportunities to shift taxable profits;
  • put mechanisms in place for the automatic exchange of information with other tax administrations, including tax rulings with the potential to raise BEPS concerns, which will help in determining how best to use audit resources and to improve ability to assess risk; and
  • created a new Agency branch with expertise to focus only on international tax, aggressive tax planning, large business, criminal investigations, and strategies to combat offshore tax avoidance.

Offshore and Aggressive Tax Planning

"Our government is working hard to give Canadians greater confidence that the tax system is fair to everyone. Those who hide income and assets offshore or try to evade or avoid paying the tax they owe will be identified and will face consequences."
 — The Honourable Diane Lebouthillier, P.C., M.P., Minister of National Revenue

Under Canada's progressive system of taxation, a key challenge is preventing unintended tax advantages that large and multi-national businesses and high-net-worth individuals obtain through sophisticated tax-planning techniques. Individuals and companies participating in aggressive domestic and international tax-planning schemes circumvent the law and jeopardize the integrity of Canada's tax base. Aggressive tax avoidance by individuals and businesses results in a fiscal cost to governments and taxpayers, and it reduces the fairness and integrity of the tax system.

Offshore non-compliance, involving low- or no-tax jurisdictions, continues to be a significant concern for most countries, including Canada. Through CRA's efforts, Canada continues to play a leadership role in the global network of tax administrations working together to combat offshore tax evasion and tax avoidance. Information sharing and international co-operation are key to fighting international tax evasion, identifying non-compliance, deterring aggressive tax avoidance, and making tax authorities more effective globally. These combined efforts contribute to the creation of a sound, fair, and transparent international tax environment.

We continue to increase our analysis and use of information to detect offshore tax avoidance and evasion. Since January 1, 2015, financial institutions have been required to report to the CRA all international electronic funds transfers (EFTs) of $10,000 or more. This information is invaluable in helping the Agency monitor potentially unreported income and target jurisdictions and financial institutions of concern. This information has also been used to identify previously unknown bank accounts (both domestic and foreign), related parties, and locations of offshore assets and income.

The CRA started a series of projects based on the EFT data. For each specific jurisdiction of focus, the Agency seeks to identify all taxpayers with transfers. Each of these taxpayers is assessed for risk of non-compliance, using all the information and business intelligence available to the CRA. In the first EFT project, we analyzed 3,000 electronic funds transfers from Canada to the Isle of Man, which totalled $860 million. As a result, the Agency started 60 audits and sent over 500 letters to Canadian individuals and businesses to remind them of their obligations to report their worldwide income. During the reporting period, the CRA also strengthened the Form T1135, Foreign Income Verification Statement, to establish more detailed and rigorous reporting requirements for Canadian taxpayers holding foreign property and assets.

In 2015-2016, we added three additional offshore compliance specialized teams and the support necessary to identify and manage high-risk files. We have begun using new risk-assessment tools to identify those who get unintended tax advantages through sophisticated tax-planning techniques. We also increased co-operation with tax administrations in other countries to better focus our efforts, including continued participation in the work of the Organization for Economic Co-operation and Development to identify opportunities for multilateral action and to establish a collaborative framework for interpreting information in relation to the Panama Papers. The CRA has 40 audits underway related to the Panama Papers and continues to gather and analyze information.

The Offshore Tax Informant Program (OTIP) lets the CRA make financial awards to individuals who provide specific and credible information, as long as the information is related to major international tax non-compliance and leads to the assessment and collection of federal taxes owing greater than $100,000. To broaden the reach of this program, the CRA publicized it in 12 languages in 2015-2016. More than 75 taxpayers are under audit as a result of information received through the OTIP.

Since the inception of gifting tax-shelter arrangements, the CRA has disallowed more than $7 billion in donation tax-credit claims on approximately 206,000 taxpayer returns. As a result of the Agency's compliance efforts in this area, there was no reported participation in gifting tax shelters in 2015-2016. Accordingly, gifting tax shelters have effectively been eliminated. In 2015-2016, we implemented a strategy to address the promotion of aggressive tax schemes. This including developing the Promoter Compliance Centre. Our Centre of Expertise continues to identify high-risk taxpayers involved in aggressive tax-planning schemes for audit.

In 2015-2016, several cases involving tax avoidance were heard in the courts. Of those where a judgement was issued, most decisions were favourable to the CRA, affirming our effectiveness in identifying and deterring aggressive tax planning. Among the favourable decisions was a landmark Supreme Court of Canada decision establishing a legal precedent to uphold the application of third-party civil penalties.

Key results

  • We completed 15,864 international and large business audits, which include 13,395 aggressive tax planning audits and 185 offshore audits.
  • Our international and large business audit activities identified over $7.9 billion in fiscal impactFootnote 2 Footnote 3, including $2 billion from our efforts to combat aggressive tax planning.
  • We levied $194 million in transfer-pricing penalties.
  • We received 258 calls and 114 written submissions this year through our Offshore Tax Informant Program.
  • We received 14.1 million reports of electronic funds transfers over $10,000.
  • We identified all taxpayers involved in transactions with the Isle of Man, launched over 60 related audits, and sent over 500 letters to remind individuals and businesses of their obligation to report worldwide income.

International Relations

International co-operation is integral to Canada's plan to operate in a globalized tax environment and to address key compliance risks, such as offshore tax evasion, profit-shifting schemes, and aggressive tax avoidance. The benefits of this co-operation permeate our business activities and are reflected in the efforts made to protect the integrity and fairness of the tax system, as well as in the best practices used to strengthen tax administration domestically and globally.

The international tax agenda is largely aimed at improving international tax transparency and addressing aggressive international tax avoidance and evasion. Canada is part of these global efforts through its active engagement in the G20/OECD-BEPS and Automatic Exchange of Information initiatives. As governments move toward implementing these initiatives, the role of tax administrators is intensifying on the global stage.

Knowledge-sharing platform

In 2015-2016, the CRA developed a knowledge-sharing platform prototype for members of the OECD's Forum on Tax Administration.

This online tool allows for broader and timelier sharing of knowledge and expertise among tax administrators.

The knowledge-sharing platform represents a commitment among participating countries to communicate best practices, to leverage successful approaches, and to teach and learn at events, seminars, and online.

In 2015-2016, the CRA:

  • participated with the Department of Finance Canada in the BEPS project;
  • prepared to implement the common reporting standard domestically and supported international implementation efforts;
  • signed the Multilateral Competent Authority Agreement for the automatic exchange of information; and
  • made the first automatic exchange of information under the Canada-U.S. Intergovernmental Agreement.

For these projects to be effective, broad and consistent global implementation is required. Strong tax-administration capacity is necessary to implement and benefit from these international initiatives and, generally, to raise revenue. In support of global commitments to build tax capacity, the CRA has played a central and leadership role by:

  • co-sponsoring (with China's tax administration) a project through the OECD's Forum on Tax Administration to explore how advanced tax administrations help build tax-administration capacity in developing countries;
  • developing and launching an international Knowledge Sharing Platform prototype to better meet the increasing demand for tax-administration assistance; and
  • providing knowledge and technical support to developing countries' tax administrations by hosting study visits, responding to requests for information, and providing on-the-ground technical experts, both bilaterally and as a key member of international and regional tax organizations.

Small and Medium Enterprises

The CRA strives to make it easier to comply with Canada's tax laws and more difficult not to. A large number of individual and corporate taxpayers make up the small and medium enterprise population, so we use diverse approaches to maximize our contact with taxpayers. We seek the least intrusive and most effective way to ensure compliance, including a range of interventions aimed at educating, assisting those who want to comply, and enforcing compliance through audits and penalties.

The CRA continues to improve the way it promotes tax compliance among Canada's small and medium enterprises. Together with other ongoing programs, our Liaison Officer Initiative, Industry Campaign Approach, and Office Audit Letter Campaign provide assistance and information to taxpayers on how to be compliant and avoid potential tax pitfalls.

The CRA's liaison officers work with small enterprises to provide information and in-person support. This helps these enterprises get their taxes right, promotes compliance, and limits the potential need for compliance action. In 2015-2016, the Agency increased the Small and Medium Enterprises Program's on-site visits by 65% over the preceding year. Over 90% of those who completed a voluntary survey after a liaison officer visit said the CRA helped them to better understand their tax obligations.

Our Industry Campaign Approach provides businesses with sector-specific tax information prevent common mistakes that will help them comply with their tax obligations. This approach provides the most relevant information, reduces administrative burden, and increases compliance. In collaboration with industry associations and external stakeholders, the CRA launched two new industry campaigns in 2015-2016. These have the additional benefit of providing useful industry benchmarks, which businesses may find helpful in assessing their financial performance compared to others in the same sector.

The Office Audit Letter campaign provides business owners with information about tax requirements in areas of increased risk of non-compliance. In 2015-2016, the CRA sent 29,786 letters to encourage taxpayers to self-correct and possibly help to avoid more intrusive compliance measures in the future. The letters focused on commission employees with significant advertising and promotion expenses, as well as taxpayers with high business and rental losses in comparison to their reported gross income.

Our strategy for small and medium enterprises is The Right Intervention for the Risk. The CRA uses education and outreach in low-risk sectors to encourage compliance. Audit interventions focus on areas of higher risk. In 2015-2016, we enhanced our risk-assessment system by developing 30 new algorithms to better target serious non-compliance, including how to better target participation in the underground economy.

Key results

  • We completed 31,119 small and medium enterprise audits.
  • We issued approximately 31,500 letters through our Office Audit Letter campaign and Industry Campaign Approach to help taxpayers to comply.
  • We made over 6,300 liaison officer visits to small businesses.
  • Our small and medium enterprise audit activities identified $1.7 billion in fiscal impact.

Combatting the underground economy

When individuals and businesses engage in the underground economy and avoid their tax responsibilities, they place an unfair burden on law-abiding Canadians. The CRA's approach to combatting the underground economy focuses on refining our understanding, reducing the social acceptability of participating in the underground economy, and implementing initiatives to promote compliance and reduce participation.

"Participating in the underground economy is wrong. Individuals or businesses that deliberately underreport or fail to report income to avoid paying taxes are depriving Canadians and their communities of critical public services."
— Emmanuel Dubourg, M.P., Parliamentary Secretary to the Minister of National Revenue

Unreported or under­reported income can be particularly widespread in industry sectors where cash transactions are common. The CRA significantly enhanced its specialized underground economy team in 2015 to bolster compliance enforcement across Canada.

During the reporting period, we completed a joint project with the Ontario Ministry of Labour to provide education and gather compliance information in the roofing construction industry. We found non-compliance issues on 20 of the 23 sites we visited and referred them for appropriate compliance-enforcement action.

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This image depicts five rows of 23 houses, 20 of which are red, three green. The text beside the image states

"We found non-compliance issues on 20 of the 23 roofing construction industry sites we visited."

As part of our efforts to reduce the social acceptability of participating in the underground economy, the CRA ran a social media pilot project to evaluate the impact on consumers of different videos and static advertisements warning of the dangers of using a contractor who engages in activity in the underground economy. As a result, we produced a video, enhanced our web content, and renewed our "Get It in Writing" campaign in 2015-2016 to make consumers aware of non-tax related risks they may face when hiring a contractor who operates in the underground economy.  

The Minister's Underground Economy Advisory Committee includes industry partners, experts, and professional organizations joining forces to reduce the acceptability of and participation in the underground economy. The Committee's advice and recommendations will help the CRA improve its methods and strategies to more effectively identify those who avoid paying their fair share of taxes and to bring them into compliance with the law.

Working with the provinces, territories, and other federal government agencies and departments, we identify and pursue those who fail to file their income tax returns and GST/HST returns. We continue to refine our understanding of the underground economy. In 2015-2016, we developed a tactical plan, taking into consideration the recommendations of the Minister's Underground Economy Advisory Committee. As a result, the CRA is better positioned to identify those who either fail to file their income tax and GST/HST returns or fail to report their income accurately. We also launched a behavioural economics project to better understand how best to influence particular subsectors at risk for participation in the underground economy to report income more accurately.

With the 2015-2016 expansion across Canada of specialized teams, the CRA is able to conduct more audits to address significant non-compliance in sectors at high risk of participating in the underground economy. Specialized point-of-sale audit teams were introduced in major urban centres across the country to detect and address the use of electronic suppression of sales (ESS) software. In 2015-2016, approximately $15.3 million in fiscal impact was assessed for income tax and nearly $3.2 million for GST/HST as a result of ESS audits.

We continue to use the unnamed persons requirements (UPRs) to get information on potential underground economy activity. Using information gathered from UPRs for generic pharmaceutical manufacturers, we uncovered over $76 million in income adjustments, resulting in close to $16 million in fiscal impact.

GST/HST compliance

The CRA's GST/HST compliance programs protect Canada's revenue base by identifying, assessing, and addressing non-compliance. We use a risk-based, balanced approach. This includes audits, examinations, education, and outreach activities. We focus on identifying existing and emerging GST/HST schemes, other arrangements, and transactions that result in a loss to Canada's tax revenue. We continue to explore new and innovative approaches to enhance the way we address non-compliance in areas presenting the highest risk.

House with a For Sale sign placed in front
Auditing property flippers

Risks of non-compliance in real estate sectors is highest in very "hot" markets, like Vancouver and Toronto. In 2015-2016 9,425 audits in this sector examined:

  • questionable sources of funds to buy or maintain properties;
  • unreported profits, capital gains, or worldwide income; and
  • unreported GST/HST on sales or unjustified claims for the new housing rebate.

We launched a pilot project in 2015 to enhance our knowledge of specific sectors of the economy and their compliance with GST/HST rules. The project aims to make GST/HST audits even more effective and efficient by identifying areas of highest risk. As a result of this project, the CRA is developing new risk-assessment criteria to better measure the success of audit strategies.

The Agency continues to improve its capacity to identify false claims and to detect suspicious patterns of behaviour, such as GST/HST accounts being registered with stolen social insurance numbers. We review these cases to prevent unwarranted GST/HST refunds being issued to fictitious entities. We notify victims of identity theft and advise them how they can further protect themselves. In 2015-2016, we reviewed approximately 1,000 identity-theft cases and closed 550 GST/HST accounts before any unwarranted GST/HST credit returns were paid.

Identity theft

The CRA identified a network involving 12 fictitious GST/HST accounts registered with stolen identities. We prevented a total of $27.3 billion in unwarranted GST/HST refunds from being paid out.

Key results

  • We completed 68,001 GST/HST audits and examinations.
  • The additional fiscal impact of our GST/HST audits was over $2.6 billion.
  • We reviewed approximately 1,000 identity-theft cases and closed 550 GST/HST accounts before any unwarranted GST/HST credit returns were paid.

Scientific Research and Experimental Development

The Scientific Research and Experimental Development (SR&ED) Program provides tax incentives to Canadian businesses to do qualifying industrial research and development in Canada. The SR&ED program is designed to encourage businesses to do scientific research and experimental development by providing more than $3 billion in investment tax credits to over 19,000 claimants annually. SR&ED activity can benefit other businesses and the Canadian economy as a whole. The CRA's role is to make sure all SR&ED claims comply with the law.

Based on the positive feedback received from claimants participating in the project testing of a formal pre-approval of their SR&ED claims, in 2015-16 the CRA evaluated the feasibility of implementing a full national rollout of this service. As a result, we developed a new pre-claim consultation service and a new pre-claim review pilot to provide predictability and further reduce the administrative burden on businesses making SR&ED claims.

The CRA launched a new strategy in 2015-2016 to focus on enhancing service, engagement, and outreach to those who could benefit from the SR&ED tax incentives. To increase awareness of the SR&ED program, we engaged other government agencies and departments serving clients who may benefit from accessing the SR&ED tax incentives. These partnerships sparked further collaborations, such as meetings with clients, key associations, and industry representatives. The CRA held two SR&ED symposiums last year in partnership with stakeholders to enhance compliance by meeting with tax preparers to identify and address emerging issues.

Key results

  • Our SR&ED program processed 22,839 claims.
  • Our SR&ED program provided more than $3 billion in investment tax credits in support of industrial research and development.

Criminal Investigations Program

The Criminal Investigations Program enforces the legislation the CRA administers by ensuring cases of tax evasion and fraud are investigated and, where appropriate, referred to the Public Prosecution Service of Canada (PPSC) for criminal prosecution.

The program has adopted a strategic approach to file selection that aligns technical expertise with criminal-investigations skill sets to address complex cases of tax evasion and fraud. Our enhanced risk-based approach ensures the most egregious cases are criminally investigated, with a focus on:

  • files having an international and/or aggressive tax planning element
  • promoters of tax evasion schemes
  • the underground economy

Early involvement of our PPSC partners in an investigation contributes to improving the quality of cases being referred for criminal prosecution.

The CRA has developed partnerships with other key stakeholders, working closely with the Department of Justice Canada, Canada Border Services Agency, and the Financial Transactions and Reports Analysis Centre of Canada. During the reporting period, the CRA and RCMP commissioners signed a new memorandum of understanding. This serves as a framework for inter-organizational co-operation through the use of integrated teams of CRA criminal tax investigators and RCMP financial criminal law enforcement experts, as well as the sharing of information in the investigation of tax-related offences, where legislatively permitted.

The Criminal Investigations Program continues to identify and correct cases of non-compliance in Canada and abroad to keep the tax system fair for all Canadians. We have strengthened our engagement with tax-treaty partners to enhance our ability to identify and address international tax evasion and facilitate exchanges of information. We continue to be engaged with the OECD to ensure a global approach to tax evasion and fraud.

More resources were allocated in 2016 to address tax evasion. Our addition of in-house legal counsel supports successful conviction of cases of tax evasion and fraud by ensuring the highest quality of investigative cases are referred for criminal prosecution. The CRA also devoted resources to enhancing analytics in the detection of promoters of tax evasion and fraudulent schemes.

There has been an increase in the number of new case referrals to the Criminal Investigations Program. Over time, the CRA expects this to lead to an increased number of case referrals to the PPSC for criminal prosecution. Cases prosecuted in 2015-2016 saw an 8% increase over last year in the number of jail terms awarded by the courts and a 20% increase in the average length of the jail sentences.

Key results

  • The Public Prosecution Service of Canada conviction rate for tax-related offences was 88%.
  • The courts awarded $4.1 million in criminal fines, and 50 individuals and businesses received criminal convictions or prison sentences.
  • Of the criminal convictions, 44% received prison sentences totalling 44.5 years in jail.

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This image depicts two columns providing financial and human resources numbers associated with the CRA's compliance programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
1,045,193,249

Total authorities
1,118,409,053

Planned (Footnote 1)
1,045,193,249

Actual (Footnote 2)
1,076,656,765

Difference (Footnote 3)
(planned minus actual)
(31,463,516)

The column on the right, under the heading Human Resources (FTEs), provides the following information from top to bottom:

Planned
9,807

Actual
9,766

Difference
(planned minus actual)
41

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Increase primarily due to spending to implement and administer enhanced compliance measures announced as part of Budget 2015, additional staffing, and workload transfers from other programs, as well as severance payments, parental benefits, and vacation credits.

Collections and Returns Compliance

The Collections and Returns Compliance Program identifies, addresses, and prevents non-compliance to help ensure tax debt is resolved on a timely basis. The CRA takes a progressive approach to compliance and debt collection, beginning with education and outreach activities to remind taxpayers of their compliance obligations. We work with individuals and businesses who have outstanding tax returns or remittances, or who owe money, to assist them in meeting their tax obligations and paying their outstanding debt. When needed, we take action to address non-compliance by using a range of activities to enforce compliance with Canada's tax laws for registration, filing, withholding, and payment of debt obligations.

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This image is a graphic representation using circles and connecting lines to show the relationships that exist regarding performance indicators, expected results, actual results, and targets. Two examples are given.

The first example involves two performance indicators and one expected result. The expected result is "Tax debt and government programs debt is resolved on a timely basis and is within targeted levels".
The first performance indicator associated with the expected result is "Percentage of government programs debt resolved compared to planned". The performance target given is 100% and the actual result listed is 103.5%.
The second performance indicator associated with the expected result is "Percentage of tax debt resolved compared to planned". The performance target is the same as for the first performance indicator (100%) and the actual result listed is 113.6%.

The second example concerns the performance indicator "Percentage of cases resolved, returns obtained, and accounts registered compared to forecast" with an expected result "Ensure compliance with registering, filing and remitting requirements". The performance target given is 100% and the actual result listed is 102.8%.

 

Collections

Canada's federal, provincial, territorial, and First Nations governments use tax revenues to provide programs and services. The CRA collects accounts receivable for tax and other government programs to support Canadian governments.

Last year, the CRA worked with Employment and Social Development Canada (ESDC) to improve debt recovery, including assuming responsibility for collecting debts for two additional government programs. We recovered $611.5 million of ESDC's outstanding debt portfolio.

The Agency is continuously evaluating new approaches to strengthen and streamline tax-collection activities. In 2015-2016, we enhanced our suite of data-mining models not only to predict taxpayers who are likely to voluntarily pay their tax debt in full in the short term, but also those who do so through consistent long-term payments without further interventions by the CRA. The business intelligence gathered by these new models allows us to better use the collection strategy most appropriate to the client, thus saving resources.

In 2015-2016, we dedicated specialized collections officers to high-risk files, such as international accounts. This builds on our strategies to manage the unique risks posed by complex cases. New sources of information about electronic funds transfers over $10,000 became an effective tool for tax collection in 2015, since these transfers reveal accounts from which tax debt could be paid. Our partnerships with other government stakeholders led to the development of a litigation strategy for effectively pursuing aggressive tax avoidance files, including offshore non-compliance, aggressive tax planning, and the underground economy.

There is a 10-year collection limit on most tax debts, so we use a central debt expiry calculator to monitor the limitation period on outstanding tax debts. In 2015-2016, this central debt expiry calculator was more fully integrated with other CRA databases and tools to make sure collection actions are taken only on legally enforceable accounts. We also put in place a new mitigation strategy for accounts approaching the 10-year limit.

Effective intervention

In its first two months of operation, our second Debt Management Call Centre resolved almost 19,000 accounts, with a total value over $67 million.

Key results

  • We resolved over $52 billion in outstanding tax debt.
  • We recovered $611.5 million of the outstanding debt portfolio for ESDC.
  • We resolved 96.7% of the dollar value of debt our tax services offices received.

Individual and Business Compliance

Canada's tax system is based on self-assessment and voluntary compliance. Individuals, corporations, and trusts must fill out an income tax return for the system to be effective. Those who do not comply with this basic requirement are considered non-filers. Although Canada has a high rate of filing compliance, the CRA continues work to further reduce this form of non-compliance to protect Canada's tax base and public confidence in the fairness and integrity of the tax system.

Our data-mining models predict accounts that have a greater potential for unfiled returns. In 2015 we were able to confirm the effectiveness of our automated tax-return, risk-scoring process. These innovative initiatives aid in determining the most effective way to get a taxpayer to comply with filing obligations.

In 2015-2016, the Agency matched information obtained from third-party cheque-cashing corporations with CRA databases to identify businesses and individuals who have not filed or who have under-reported their income on their tax returns. This helped us to promote and enforce compliance with filing requirements and supported our broader goals of addressing non-compliance in the underground economy.

93% of individuals and 86% of corporations filed and paid their tax returns on time without CRA intervention.

Source deductions are the largest contributor to Canada's income tax revenue each year, helping to fund federal, provincial, and territorial government services, programs, and infrastructure. The CRA is responsible for ensuring the integrity of Canada's source deductions system, overseeing the income tax deducted from the pay cheques of millions of Canadians each year. We also oversee the income tax deducted and amounts held in trust for employees' contributions to their Canada Pension Plan (CPP) and Employment Insurance (EI) accounts. To support and sustain Canada's source deduction system, the CRA ensures compliance with registration, withholding, remitting, reporting, and filing obligations related to payroll, GST/HST, other levies, and non-resident taxes.

In 2015-2016, we offered webinars and follow-up assistance to over 14,000 businesses regarding payroll, registration, and filing obligations. Through targeted education initiatives, we provided information about taxable benefits in our correspondence to specific industry sectors to make sure they are aware of these rules. These education initiatives and our face-to-face meetings with employers through our Liaison Officer Initiative, help small and medium-sized businesses meet their tax obligations by focusing on in-person support regarding source deduction.

Two years and over $80,000 for non-filing and tax evasion

A Calgary man didn't file his individual tax return or returns for his business. The CRA served a requirement to file, but he failed to comply. The court found him guilty of eight counts of failing to file, fined him $8,000, and ordered him to file the outstanding returns.

The CRA then audited the returns and determined information had been falsified from multiple sets of financial books and records. The man pleaded guilty to income tax evasion, both personally and for his business. He also pleaded guilty to tax evasion for GST.

The man was fined $80,873 and sentenced to a term of 24 months. He must also pay the full amount of taxes owing, plus interest.

The CRA promotes individual and business compliance with GST/HST registration requirements.   Our review of over 270,000 GST/HST registrations included screening for compliance risk, data integrity, possible fraud, and identity theft. In 2015-2016 we developed new technology to reduce reliance on manual processes, leverage our information holdings better, and enhance our ability to identify higher risk GST/HST non-registrant accounts. We also continue to improve the predictive capability of our data mining models to assess GST/HST amounts owed by registrants who have not complied with their obligation to file. We have implemented new review processes after we reassess a taxpayer to improve collection of amounts owing and to target known or suspected gaps in the taxpayer's overall reporting compliance.

The CRA's collection of individual income tax revenue through source deductions is the most significant source of government revenues: $2.7 billion in 2015-2016.

Key results

  • We reviewed over 715,000 payroll accounts.
  • We completed 816 employer compliance audits.
  • We reviewed 270,000 GST/HST registrations and resolved over 255,913 delinquent GST/HST files.
  • We verified over 4.4 million individual and business accounts, resulting in over $2.6 billion in (re)assessments.
  • We identified over $4.2 billion in non‐compliance, including source deductions.
  • We received over 714,777 income tax and information returns as a result of our actions to prompt compliance by non‐filers.
  • We identified nearly $3.6 billion  in non‐compliance in the non‐filer segment.

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This image depicts two columns providing financial and human resources numbers associated with the CRA's collections and returns compliance programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
469,453,195

Total authorities
534,428,935

Planned (Footnote 1)
469,453,195

Actual (Footnote 2)
495,342,255

Difference (Footnote 3)
(planned minus actual)
(25,889,060)

The column on the right, under the heading Human Resources (FTEs) (Footnote 4), provides the following information from top to bottom:

Planned
7,638

Actual
7,653

Difference
(planned minus actual)
(15)

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Increase primarily due to spending to implement and administer enhanced compliance measures announced as part of Budget 2015, additional staffing, workload transfers from other programs, as well as severance payments, parental benefits, and vacation credits.

Footnote 4
Includes FTEs associated with fulfilling the CRA’s administrative responsibilities in support of Canada Pension Plan and Employment Insurance legislation.

Appeals

The Appeals Program provides a fair and impartial redress process to resolve disputes arising from decisions made by the CRA, and to respond to service complaints and requests for relief from penalties and interest. The Appeals program also assists the Department of Justice in handling cases that are sent before the courts.

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Image description

This image is a graphic representation using circles and connecting lines to show the relationships that exist regarding performance indicators, expected results, actual results, and targets. Two examples are given.

The first involves the performance indicator "Percentage of targeted levels of timeliness and consistency for Income Tax and Commodity Tax Objections, CPP/EI appeals to the Minister, and service complaints that are met" (Footnote 1) with the expected result that "Taxpayers receive a timely review of contested decisions made under legislation administered by the CRA and of service complaints". The target listed is 98% and the actual result is 100% (Footnote 2).

The second example concerns the performance indicator "Percentage of targeted levels of transparency and objectivity for Income Tax and Commodity Tax objections, CPP/EI appeals to the Minister that are met" with the expected result that "Taxpayers receive an objective review of contested decisions made under legislation administered by the CRA". The target listed is 98% and the actual result is 99.8%.

Footnote 1
Details on our service standards start on page 162.

Footnote 2
This performance measure includes multiple performance indicators associated to timeliness within the program. Since all performance indicators met their individual target, an overall result of 100% is achieved.

During 2015-2016, the CRA implemented a number of initiatives to improve the timeliness and effectiveness of redress for taxpayers. One of the main initiatives was the introduction of expanded digital services, which enabled taxpayers to send documents electronically, resulting in better and faster service.

Objections

Every taxpayer who disagrees with a CRA decision about an assessment has access to the CRA's dispute resolution process. The Agency receives about 80,000 objections each year. To process the objections in a timely, impartial, and consistent manner, the CRA segments them by level of complexity and whether they are individual or group objections. The CRA fully implemented a central repository of files to allow for more efficient and systematic distribution of incoming objections.

Throughout 2015-2016, the initiatives the Agency undertook to improve the timeliness of the resolution of objections resulted in the following outcomes:

Low-complexity workload
  • The Agency met its 180-day target for resolution of low-complexity objections 74% of the time, while continuing to focus on further reducing this inventory.
  • The average waiting time to assign an objection to an officer was reduced by 30%.
  • The CRA resolved all outstanding low-complexity workload inventory with significant aging (defined as more than 180 days) as of April 1, 2015.
Medium-complexity workload
  • 31,017 medium-complexity objections were processed within an average of 95 days of being assigned.
Group objections inventory
  • 29,371 group objections were processed during the course of the fiscal year.
  • Legislation was implemented to allow the CRA to bind many cases to the results of one lead court case.
Quality assurance
  • The Agency introduced enhanced procedures involving oversight and review of Appeals cases to ensure the focus of the objections Quality Assurance Program for objections is on the quality of decisions and timely service to taxpayers.

Key results

  • We received 81,109 income and commodity tax disputes.
  • We resolved 96,098 income and commodity tax disputes.
  • 5,197 appeals were filed before the Tax Court of Canada.

CPP/EI Appeals to the Minister

Thousands of Canadians rely on payments through the Canada Pension Plan (CPP) or Employment Insurance (EI) as their main source of income. As a result, prolonged disputes regarding their eligibility for payments, or the insurability of their earnings, can potentially cause financial hardship. Canadians are entitled to timely decisions related to disputes over CPP/EI payments and the Minister of National Revenue is responsible to hear appeals regarding earnings insurability.

The CRA consolidated all CPP/EI appeals from six sites to three sites in 2015. This consolidation helped ensure consistency in the application of legislation, policies, and procedures, and thus the quality of our decisions. To further improve efficiencies and timeliness in the handling of CPP/EI appeals to the Minister, the CRA implemented a new centralized approach to workload management, which was completed in June 2016.

In 2015-2016:

  • The Agency received 2,683 CPP/EI appeals to the Minister, which were added to an opening inventory of 879. During the year, 2,695 appeals were resolved.
  • 205 appeals were filed before the Tax Court of Canada.

Service Complaints

The service complaints resolution process enables taxpayers to express their dissatisfaction with the service they received from the CRA, as described in the Taxpayer Bill of Rights on page 172. In 2015-2016, 3,336 service complaints were resolved, of which 91.8% were resolved within 30 business days.

The CRA recognizes valuable insight and feedback can be gained when taxpayers raise service issues. The insight and feedback helps to identify and implement service improvements for Canadians. The following are two examples of feedback collected through service complaints in 2015-2016, which resulted in service enhancements for Canadians:

  • A taxpayer with a hearing impairment was notified by correspondence of an amount owing and was provided with a 1-800 telephone line to contact the Agency to make a payment arrangement. The taxpayer could not complete the call, because they were using an Internet-protocol relay chat service. The CRA updated its website to include information regarding services for persons with disabilities, released a tax tip to the media providing clear and complete information on authorising a relay operator, and revised its collection letters to include a link to the webpage where information on active offers for alternative services is provided.
  • A taxpayer was concerned when their notice of assessment (NOA) indicated their refund would be mailed, even though they had enrolled in direct deposit. The CRA updated its generic NOA response to indicate a refund "would be issued shortly" without specifying the delivery method, to reflect the fact the majority of Canadians prefer direct deposit.

In addition to service complaints, the CRA receives feedback from people who interact with the Agency through various programs, call centres, and other formal and informal channels. However, the key challenge lies in consistently and effectively capturing this feedback, so the Agency can quickly identify service issues, or gain a better understanding of taxpayers' needs, and make continuous improvements. In 2015-2016, the CRA completed an inventory of the programs receiving feedback and developed a model for common tracking and reporting, which —once operational— will better assist in Agency-wide collection of feedback about service.

Key results

  • We resolved 3,336 service complaints.
  • We resolved 91.8% of service complaints within 30 business days.

Taxpayer Relief

The CRA administers the process under which the Minister of National Revenue may cancel or waive penalties and interest under taxpayer relief provisions. Each year, the Agency resolves many requests for relief from taxpayers who cannot meet their tax obligations due to personal misfortune or circumstances beyond their control. In 2015-2016, the Agency resolved 51,505 requests for taxpayer relief. In addition, the Agency implemented a number of enhancements to improve service to Canadians:

  • To allow for better management of the Taxpayer Relief Program, we implemented new procedures, trained employees across all business lines, and improved reporting processes.

Key results

  • We waived $754 million in penalties and interest for 51,505 requests (taxpayer-requested and automated).

CRA response to Alberta wildfires

When wildfires broke out in Alberta, our commitment to service meant looking for practical ways to provide taxpayer relief; proactively resolving potential disputes; and helping to ease the tax burden for those mainly concerned with the safety and well-being of their families, homes, businesses, and communities.

CRA's disaster relief response included:

  • working with Canada Post to provide secure access to mail for people who were expecting a benefit payment or tax refund, but had to evacuate their community.
  • encouraging individuals, business, and first responders who found themselves unable to file or pay taxes on time to make a request for taxpayer relief.
  • making designated telephone agents available to answer questions, send taxpayer relief requests, arrange direct-deposit payments, and provide advice relating to lost, destroyed, or damaged records.
  • cancelling all penalties/interest for affected individuals who could not file their tax return or pay amounts owing.
  • temporarily ceasing all collections, audit-related activities, and administrative correspondence in the affected area.
  • helping registered charities affected by, or providing relief from, this disaster and providing information to donors who wanted to help the charities.

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This image depicts two columns providing financial and human resources numbers associated with the CRA's appeals programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
179,658,662

Total authorities
187,677,521

Planned (Footnote 1)
179,658,662

Actual (Footnote 2)
181,214,477

Difference (Footnote 3)
(planned minus actual)
(1,555,815)

The column on the right, under the heading Human Resources (FTEs) (Footnote 4), provides the following information from top to bottom:

Planned
1,696

Actual
1,671

Difference
(planned minus actual)
25

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Increase primarily due to higher than planned Department of Justice Canada and expert-witness costs.

Footnote 4
Includes FTEs associated with fulfilling the CRA’s administrative responsibilities in support of Canada Pension Plan and Employment Insurance legislation.

Internal Services

Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities are management and oversight services, communications services, legal services, human resources management services, financial management services, information management services, information technology services, real property services, materiel services, and acquisition services.

Human Resources

The success of the CRA as a trusted, world-class tax and benefit administration, and as an employer, relies to a significant degree on the effective management of its people. During 2015-2016, the CRA implemented several initiatives to sustain a healthy, productive, diverse, and bilingual workforce and help the Agency fulfill its mandate now and in the future.

Succession planning remains a key priority for the Agency and the CRA's workforce strategies continue to address the reality of an ever-increasing number of CRA employees becoming eligible to retire over the next decade. In 2015-2016, the Agency implemented a number of such strategies, which allowed it to focus on the hiring of specialized professions that will be especially needed by the CRA. These professions were identified in the Agency Workforce Plan and include auditors, data analysts, and business intelligence analysts. Examples of the CRA's specific recruitment strategies included the 2015-2016 Auditor Development Program recruitment campaign and the Information Technology Apprenticeship Program.

In 2015-2016 the CRA used social media to rejuvenate the Agency's workforce through undergraduate and graduate student hiring. Hiring post-secondary students has allowed the CRA to recruit specialized professionals to address existing and emerging workforce gaps. Throughout the year, the CRA continued to enhance its visibility on post-secondary campuses. CRA student ambassadors and CRA brand ambassadors attended various career fairs and campus events at 38 recognized post-secondary institutions.

A significant human resource initiative undertaken by the Agency in 2015-2016 was the establishment of an agreement with the Chartered Professional Accountants (CPA) of Canada to provide CRA employees with the opportunity to have specific CRA work experience pre-qualify them for the CPA professional accountant designation. This agreement will help the Agency attract and retain top talent within the Agency's team of auditors and accounting professionals, while ensuring we meet future recruitment needs.

In another strategic initiative to improve succession planning, the Agency integrated succession planning into its Executive Performance Management Program to create a new comprehensive Talent Management approach. This approach now enables the CRA to identify, develop and retain talent by looking at gaps, risks, and successor readiness.

Workplace well-being is a key government priority emphasized by the Clerk of the Privy Council. In support of this important government-wide priority, the CRA established its Workplace Well-being Strategy. One key element of this strategy was the development of the Discrimination and Harassment Centre of Expertise, which was successfully launched in the spring of 2016. In addition, the Agency did research throughout 2015-2016 on the use of the Canadian Mental Health Commission's mental health indicators, to assess not only the state of mental health within the Agency but also the efficacy of the programs the Agency has in place to support employee wellness.

During 2015-2016, the CRA continued to surpass the representation levels of all four employment equity (EE) designated groups. The chart below shows the success the Agency achieved during the year in exceeding EE representation levels beyond those based on general labour market availability:

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Image description

This is an image of a chart that provides details on the representation of employment equity groups in the CRA. The employment equity groups are identified from top to bottom as Women, Visible minorities, Persons with Disabilities, and Aboriginal peoples. Under each employment equity category heading, figures of people are used to depict the number and percentage of persons represented in the CRA. The percentage for labour market availability for each employment equity group is also provided for purposes of comparison. The internal representation numbers and percentages are provided next to the appropriate row of figures of people, as are the numbers for general labour market availability.

For women, the numbers are:
Internal Representation (Employees): 24,254
Internal Representation (%): 61%
Labour Market Availability (%): 59%

For Visible minorities, the numbers are:
Internal Representation (Employees): 10,174
Internal Representation (%): 25%
Labour Market Availability (%): 20%

For Persons with Disabilities, the numbers are:
Internal Representation (Employees): 2,836
Internal Representation (%): 7%
Labour Market Availability (%): 5%

For Aboriginal Peoples, the numbers are:
Internal Representation (Employees): 1,306
Internal Representation (%): 3%
Labour Market Availability (%): 3%

Source: Data from Corporate Administrative System, as of March 31, 2016.

Throughout the year, the CRA conducted various outreach activities and initiatives to attract and recruit members from each EE group. For example, the Agency participated in Aboriginal career fairs and continued to promote its Aboriginal Student Employment Program. In addition, EE was used as a staffing requirement to make placements for successful candidates in the Auditor Development Recruitment processes.

In 2015-2016, the Agency surpassed its target of meeting its two official languages communications requirements 95% of the time. The three requirements were service to the public, supervisory functions, and internal services. The Agency continues to engage official language minority communities as part of its regular consultation and outreach plans.
One measure of the success of the CRA's management of its human resources was shown in 2015-2016 through the accolades conferred on both the Assistant Commissioner and Deputy Assistant Commissioner of the Agency's Human Resources Branch. Ms. Diane Lorenzato, the Assistant Commissioner, was awarded the prestigious Michelle C. Comeau Human Resources Leadership Award in the category of Head of Human Resources, while the Deputy Assistant Commissioner, Mr. Dan Couture, received an Association of Professional Executives of the Public Service of Canada (APEX) Award in the Leadership category. The recognition accorded these two senior executives acknowledges how strong leadership within the Agency has led to significant results and, in the case of human resources, a culture of integrity and respect and a talented workforce that has helped, and will continue to help, the CRA fulfil its mandate and achieve its goals.

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This is a photo depicting, from left to right, Deputy Commissioner of the CRA, John Ossowski, Assistant Commissioner of the CRA's Human Resources Branch, Diane Lorenzato, and Deputy Assistant Commissioner of the CRA's Human Resources Branch, Dan Couture. Ms. Lorenzato is holding the Michelle C. Comeau Human Resources Leadership Award, which she won in the category of Head of Human Resources.

The caption beneath the photo reads: "Deputy Commissioner John Ossowski with Diane Lorenzato, recipient of Michelle C. Comeau Human Resources Leadership Award, and Dan Couture, recipient of APEX Award in the Leadership category.

Information Technology

Service to Canadians and innovation were two of the Agency's key strategic priorities throughout 2015-2016, and the CRA's information technology (IT) expertise has been crucial to the Agency being able to deliver on those priorities. Whether through the development of systems and applications leading to new or enhanced e-services, or helping to support the Agency's compliance strategies, the CRA's IT services have provided the necessary support for innovative Agency initiatives, making it easier for Canadians to comply with their tax obligations and to receive their benefit payments on time. IT continues to provide the Agency with the capacity it needs to sustain both current and emerging business needs, and to help the Government of Canada meet its commitment to provide fair, helpful, and easy-to-use service.

Awards

The Government Technology Exhibition and Conference Distinction Awards are the most notable peer recognition of public sector IT accomplishments in Canada. In October 2015, two of the CRA's IT projects were honoured with Distinction Awards at the annual Government Technology Exhibition and Conference ceremony. The two awards were for:

  • "Submit Documents," a project offering taxpayers a faster, more convenient way to interact with the CRA by providing them with the means to send documents to the CRA electronically. The project also supports the CRA's commitment to sustainable development by reducing manual paper-based processing and storage costs.
  • The "Application Sustainability Program," which provides a portfolio approach to managing the maintenance and sustainability of aging applications. It has reduced applications being identified as "at risk" by more than 50%.

Some of the CRA's significant e-service developments for 2015-2016 included:

  • Implementation of "Auto-fill My Return" for individuals, providing taxpayers who file electronically with the ability to connect to CRA systems to prepopulate their tax data using third-party tax software.
  • Development of sustainable new technologies in support of the CRA's External Administrative Correspondence project, increasing the flexibility in formatting the look and feel of the CRA's paper and electronic communication. (More information on the External Administrative Correspondence project can be found in the Taxpayer and Business Assistance chapter and details on the CRA's development of sustainable new technologies is provided in the Assessment of Returns and Payment Processing chapter.)
  • Enhancement of the Tax Filing Infrastructure Readiness program by expanding the number of IT activities done before the taxfiling deadline, in support of a successful taxfiling season. In this regard, the CRA and Shared Services Canada (SSC) collaborated to implement a new model that doubled the capacity of CRA's tax systems infrastructure in anticipation of the increased take-up in electronic services such as Autofill My Return, My Account, and MyCRA mobile app.
  • Implementation in April 2015 of the system to process the British Columbia early childhood tax benefit for the Province of British Columbia.
  • Implementation of the goods and services tax credit auto-enrolment, ending the need for individuals to apply for the GST/HST credit on their income tax and benefit return. The CRA will now automatically determine the eligibility for the credit with every filed return.
T1 Systems Redesign and Benefits System Renewal

Work continued throughout the year on the preparation and testing of the systems and infrastructure the CRA uses to administer tax and benefit programs. In this regard, the Agency is proceeding with its T1 Systems Redesign and Benefits System Renewal projects. The T1 Systems Redesign is being delivered in stages through six successive annual T1 suite releases. Three releases remain and will be delivered in February of 2017, 2018, and 2019. Meanwhile, the Benefits System Renewal initiative will be delivered in six releases to be completed by 2018-2019, followed by one additional year to stabilize the system and end the project.

IT Security

In 2015-2016, the CRA continued to advance its IT Security Strategy by implementing Phase 3 of the Identity and Access Management (IAM) project, which has improved compliance to password standards throughout the CRA and has contributed to a centralized approach for managing passwords. A self-service functionality was also implemented, which allows employees to reset or change their password. (More details are in the Integrity and Security section.) The CRA also began the work required to implement an effective method to control, track, and monitor transfers of taxpayer information. Also, the CRA took steps to strengthen the security of taxpayers' connections to the CRA's online services. This was accomplished by adopting specific requirements contained in the Communication Security Establishment's IT Security directives.

Compliance Support

The CRA successfully automated a two-way data exchange mechanism with the U.S. Internal Revenue Service to comply with the U.S. Foreign Account Tax Compliance Act. The Agency sent 155,000 slips to the Internal Revenue Service and received 360,000 slips in return. Meanwhile, in support of the CRA's international tax evasion and money laundering agenda, the Agency received 14.1 million Electronic Funds Transfer reports in 2015-2016.

Shared Services Canada (SSC)

Collaboration with SSC has continued on a wide range of important initiatives, such as email transformation, data centre consolidation, telecommunication services, cyber and IT security, workplace technology devices, and hosted contact centre services. The CRA also was involved in working with SSC officials on the renewal of our business intelligence infrastructure, tools, and processes, and the expansion of CRA's e-services. Regarding e-services, SSC provided significant support to ensure a successful taxfiling season. Working together, the CRA and SSC prepared for an expected increase in take-up of services by implementing a new infrastructure model, effectively doubling the infrastructure footprint of our public-facing systems. This enabled the CRA to successfully process the anticipated volume of work at our busiest time of the year.

Integrity and Security

Integrity and security remained one of the Agency's most important priorities in 2015-2016. Canadians rely on the CRA to protect their personal information and have every right to expect CRA employees will perform their duties with fairness and honesty. Trust is the foundation of Canada's voluntary and self-reporting tax and benefit system and, to this end, the Agency strives to earn the trust of Canadians by incorporating integrity and security considerations into every aspect of our strategic decision-making and daily operations.

In the face of ever-evolving security threats, the CRA continued throughout 2015-2016 with projects to protect Canadians' tax information and enhance the security of the Agency's electronic services. One such project has been the IAM Project. Phase 3 of this project was successfully launched in January 2016 and has enabled the CRA to adopt a centralized approach to managing passwords. Compliance with basic password standards by employees throughout the Agency has improved as a result. Meanwhile, Phase 4 of the IAM Project is scheduled for completion in June 2017. Initiatives under this phase will further protect taxpayer information by reducing the risks related to identity and access management.

Another significant project has been the Enterprise Fraud Management (EFM) solution for the National Audit Trail System. The planning phase of the EFM solution was completed in November 2015 and this part of the National Audit Trail System is now in the execution phase. Once it is fully operational, the EFM solution will improve the CRA's ability to detect and proactively address suspicious transactions on CRA systems.

To further support integrity and security at the CRA, an internal fraud and misuse reporting line was launched in May 2015. Agency employees can now report suspected internal fraud and misuse (theft, bribery, or unauthorized access or disclosure of CRA information) through an anonymous web-based service and toll-free telephone service.

In December 2015, the CRA approved a new Code of Integrity and Professional Conduct, as well as a revised Directive on Conflict of Interest, Gifts and Hospitality, and Post-Employment, to help promote and sustain a culture of integrity in the workplace.

Implementation of the 2014-2017 Agency Security Plan continues. This three-year plan has guided the CRA through a strategic and integrated approach to managing its current security risks and planning for future security priorities, which has helped to enhance the Agency's capacity to protect its employees, information, and assets. The plan was recognized as a notable, or best, practice in the 2015-2016 Treasury Board of Canada Secretariat (TBS) Management Accountability Framework.

During 2015-2016, the Reliability Status + security screening of Agency executives was completed. This new level of security screening introduced additional verifications for people holding or applying for positions requiring a high degree of public trust.

It's all about trust

Public trust strongly influences the voluntary compliance on which our tax administration is built. Public perceptions of and confidence in our organization has the potential to affect the CRA's reputation and ability to fulfil our mandate.

The CRA is deeply committed to maintaining the trust Canadians place in our organization. Canadians expect and deserve impartial, objective, and equal service from the CRA. As outlined in the Taxpayer Bill of Rights, Canadians have the right to be treated fairly, to have the law applied consistently, and to expect the CRA to be accountable for what we do. We know we must conduct ourselves ethically and honestly to be trusted.

We treat as a matter of grave concern any situation that could create a perception of preferential treatment or privileged access. All CRA employees have to avoid real, apparent, or potential situations that could be perceived as impairing the ability to perform their duties in an objective, loyal, and impartial way. Thus, we must avoid not only granting preferential treatment or privileged access, but also avoid creating the perception that we may have done so.

We try to be visible, accessible, and accountable to the public we serve to show our commitment to fostering a culture of integrity. In 2015-2016, the CRA Board of Management updated our Code of Integrity and Professional Conduct, which is published on the CRA website. By articulating publicly how we work, we invite Canadians to hold us accountable for carrying out our duties with integrity and professionalism.

Finance and Administration

The Treasury Board Secretariat and the CRA's Board of Management oversee the Agency's activities, while the Office of the Auditor General reviews the financial statements.

The Agency continued to advance the Chief Financial Officer (CFO) model, a best practice throughout government that further strengthens financial management and accountability. Of particular note during 2015-2016: the responsibility and resources for financial management advisory services at Headquarters were realigned under the CFO. The CRA also formalized a governance framework which brings together key partners across the broader CRA financial management community. This framework facilitates the sharing of best practices, increases communication and engagement on horizontal issues, and supports the provision of high-quality and consistent financial management advisory services across the CRA.

The Agency's efforts to modernize its office space and realize accommodations savings through the application of Workplace 2.0 standards continued throughout 2015-2016 and contributed to the successful achievement of CRA planned space savings. During the year, the CRA reduced its footprint by approximately 31,000 rentable square metres for an approximate cumulative reduction, since April 1, 2012, of 110,000 rentable square metres.

Information Management

Applying sound information management (IM) principles ensures the CRA can meet its legislative and regulatory obligations, support decision-making, and fulfil the operational needs of the programs the Agency administers. It also helps the CRA derive value from its information and deliver its programs and services efficiently and effectively.

As the CRA increasingly relies on technology to support the delivery of programs and services, the integration of information management requirements into planning becomes even more important to ensure the long-term integrity of the CRA's information, regardless of changes in the organization, movement of employees, changing technology, or changes in the law.

In recent years, the CRA has successfully applied IM principles to reduce its electronic footprint. More than 30,400 internal and external web pages, which were either duplicate pages or which contained outdated information, have been cut. In addition, as part of a government-wide, email modernization project, the Agency reduced its e-mail storage by an impressive 13 terabytes.

The Agency maintains a large volume of paper records. Legally, the CRA cannot dispose of its records (either paper or electronic) until pre-established retention conditions have been met. Both our paper and electronic records support our audit activities and are also required for tax reassessments, which can often be requested by taxpayers several years after the end of a tax year. Notwithstanding such considerations, we expect the CRA's paper holdings will diminish over time as take-up of our e-services increases and the use of paper documents diminishes.

In 2015-2016, a new Information Management Strategy was approved for the Agency. This strategy provides strong direction and specifies concrete actions, allowing the Agency to continue to improve the management of its information.

Innovation

The Agency's willingness to try new ideas, adapt to new technology, and seek continuous improvement are fundamental to its ability and commitment to continuously improve its service to Canadians. The Agency is especially dedicated to learning from others and working in partnership with other organizations and sectors to use innovative approaches in achieving solutions. Partnerships with software developers, community associations, and international tax administrations have provided a successful model and foundation for this type of engagement.

A new working group, the Advisory Committee on Enhancements to Tax Software (ACETS), was established in 2015-2016. Led by the CRA, and with representation from private industry software companies who design tax software, ACETS is involved in engaging third-party software developers to provide input and industry best-practices in developing new and innovative electronic services for the Agency.

The Agency remains focused on creating an environment where new ideas are welcomed, tested, and implemented and, throughout 2015-2016, continues to foster a culture of innovation to improve the service and delivery of CRA programs.

In 2015-2016, the CRA completed the following projects related to innovation:

  • created the Accelerated Business Solutions Lab (ABSL);
  • built and renewed the CRA's business intelligence infrastructure, tools, and processes;
  • used new and innovative analytic approaches to detect and correct simple errors; and
  • launched the e-Interactions strategy.

The ABSL started operating in April 2015 and has made significant progress in advancing innovation across the CRA, through both its direct work in a range of important projects and in giving Agency representatives opportunities to hear from and engage with experts internal and external to the Government of Canada. In particular, the ABSL worked closely with the Central Innovation Hub at the Privy Council Office, and other innovation teams across the public service, to exchange ideas and share information.

In 2015-2016, the ABSL did several projects involving the application of innovative techniques such as behavioural economics, advanced data analytics, and qualitative research. The ABSL used advanced analytics to analyze Canadians' taxfiling and payment habits, seeking to understand the factors leading some taxpayers to continue to file paper returns and pay by cheque. This study also led to outreach and communication activities aimed at further encouraging the acceptance and use of electronic services.

Regarding electronic services, the Agency's e-Interactions strategy continues to promote innovative approaches to service delivery and is helping the CRA to achieve the vision of creating a world-class digital service experience for Canadians that is user-centric, secure, and digital from end to end.

Engagement has been key to developing and maintaining a culture of innovation at the Agency. Throughout 2015-2016 there were a number of activities and initiatives where engagement supported innovation. One example was the "Leading an innovation" speaker series, where experts gave presentations to CRA employees on innovative tools and methods in such fields as text mining and design thinking. Another was the initiative to organize CRA analytics community events in order to foster engagement and awareness of new analytic approaches across Agency program lines.

The CRA continues to use innovative methods to engage its employees, capitalizing on everyone's individual and collective contributions. This type of engagement has helped to collapse traditional hierarchies, allowing employees to bring their ideas directly to decision-makers in a truly bottom-up approach. Examples include:

  • The Compliance Programs Branch's GST/HST innovates! site, where employees can easily share their ideas on improving the workplace through innovative solutions that streamline a process or improve efficiency in the delivery of a program.
  • The Pacific Region's Innovation Direct site, where employees can send their innovative ideas and solutions on any topic, including some that have been implemented through Blueprint 2020 initiatives.

One of the more noteworthy engagement activities in support of innovation occurred in Ottawa on March 8 and 9, 2016. The CRA, in partnership with the Privy Council Office and Employment and Social Development Canada, hosted the Behavioural Economics for the Public Sector Conference. Over the two days, nearly 300 federal, provincial, and territorial public servants and academics gathered to learn about the growing field of behavioural economics. With North American experts from the field sitting alongside federal and provincial public servants on panels, conference attendees were able to learn about the field and see practical examples of how behavioural insight techniques can be, and have been, applied to public sector programs, services, policies, and regulations.

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Image description

This image depicts two columns providing financial and human resources numbers associated with the CRA's internal services programs.

The column on the left, under the heading Budgetary Financial Resources (dollars) provides the following information from top to bottom:

Main Estimates
837,350,994

Total authorities
1,045,471,609

Planned (Footnote 1)
837,350,994

Actual (Footnote 2)
917,510,101

Differencec (Footnote 3)
(planned minus actual) (80,159,107)

The column on the right, under the heading Human Resources (FTEs) (Footnote 4), provides the following information from top to bottom:

Planned
7,541

Actual
7,688

Difference
(planned minus actual)
(147)

Footnote 1
Planned spending excludes severance payments, parental benefits, vacation credits and the carry-forward of unused funds from 2014-2015 where, pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has up to two fiscal years to utilize parliamentary appropriations once approved. This funding is received during the fiscal year and is included only in actual spending.

Footnote 2
Modified cash basis, based on Parliamentary appropriations used. See pages 111 and 112 of the Departmental Performance Report for an explanation of how actual spending relates to results in the CRA Financial Statements – Agency Activities.

Footnote 3
Increase primarily due to spending on major investment projects, workload transfers from other programs for information technology work and the consolidation of the financial management advisory team, as well as initiatives announced as part of the Budget 2015.

Footnote 4
Includes FTEs associated with fulfilling the CRA’s administrative responsibilities in support of Canada Pension Plan and Employment Insurance legislation.

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