Report on Plans and Priorities 2014-15

Section 1: Organizational Expenditure Overview

Organizational profile

Minister:
The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P.

Deputy head:
Andrew Treusch

Ministerial portfolio:
National Revenue

Year established: 1999

Main legislative authorities: Canada Revenue Agency Act please consult end note number 3 on page 86.

Organizational context

Raison d'être

The minister of National Revenue is responsible for the Canada Revenue Agency (CRA), and the CRA is in turn responsible for administering, assessing, and collecting hundreds of billions of dollars in taxes annually. The tax revenue we collect is used by federal, provincial, territorial, and First Nations governments to fund the programs and services that contribute to the quality of life of Canadians. We also use our federal infrastructure to deliver billions of dollars in benefits, tax credits, and other services that support the economic and social well-being of Canadian families, children, and persons with disabilities. Our mandate is to ensure that Canadians:

Responsibilities

The CRA has a broad range of responsibilities. In addition to the Income Tax Act and the Excise Tax Act, we administer legislation relating to the Canada Pension Plan, employment insurance, and softwood lumber. We are responsible for enforcing legislation governing charities, collecting tobacco taxes and duties, administering registered plans, and collecting non-tax debts for the federal government.

We strive to provide exceptional service to ensure Canadians find it easy to comply with their tax obligations and recipients receive their full benefit entitlements. We are working with taxpayers and other important players in the tax system to identify service gaps, further reduce the compliance burden, and develop innovative ways to deliver services and information. As the guardians of the integrity of Canada's tax and benefits system, we are also tasked with enforcing compliance. In this role, we identify, deter, and correct non-compliant behaviour.

The CRA delivers a number of benefit and tax credit programs on behalf of the federal government. In addition, we administer a number of on-going and one-time tax credits and benefits on behalf of provincial and territorial governments. By providing services on behalf of other levels of government by eliminating, we help reduce the cost of government by preventing unnecessary administrative duplication. Having one point of service delivery also helps reduce the compliance burden on benefit recipients and taxpayers.

Finally, the CRA ensures the fairness and transparency of Canada's tax and benefits system by offering an enquiry process for taxpayers who do not agree with our decisions, a formal service complaints process for those who are not satisfied with our service, and relief to taxpayers who, through no fault of their own, find themselves unable to fully comply with their obligations.

Strategic outcomes and program alignment architecture

Strategic outcomes: Taxpayers meet their obligations and Canada's revenue base is protected

Programs: Taxpayer and business assistance

Sub-programs:

Programs: Assessment of returns and payment processing

Sub-programs:

Programs: Reporting compliance

Sub-programs:

Programs: Collections and returns compliance

Sub-programs:

Programs: Appeals

Sub-programs:

Strategic outcomes: Eligible families and individuals receive timely and accurate benefit payments

Programs: Benefit programs

Sub-programs:

Internal services

Strategic outcomes

Taxpayers meet their obligations and Canada's revenue base is protected.
Performance indicators Targets Date to be achieved
Percentage of returns filed on time, by the specified due dates, without direct intervention on the part of the CRA 90% March 2015
Percentage of known businesses registered for GST/HST 90% March 2015
Percentage of reported taxes (including instalments) and source deductions that are paid on time 90% March 2015
Eligible families and individuals receive timely and accurate benefit payments.
Performance indicators  Targets Date to be achieved
Percentage of benefits payments issued to benefit recipients on time 99% March 2015
Percentage of Canada child tax benefit recipients who provide complete and accurate information and receive the proper entitlement 95% March 2015
Percentage of potentially entitled benefit recipients that receive the Canada child tax benefit (reported after each census) 95% March 2015

Organizational priorities

Organizational priorites
Priority Type Footnote 1 Strategic outcome
Service: Improve service to make it easier to comply Ongoing Taxpayers meet their obligations and Canada's revenue base is protected
  • Taxpayer and business assistance
  • Assessment of returns and payment processing
  • Reporting compliance
  • Appeals
Eligible families and individuals receive timely and accurate benefit payments
  • Benefit enquiries

Description

What are the plans for meeting this priority?

Organizational priorites
Priority Type Footnote 1 Strategic outcome
Compliance: Make sure all taxpayers pay their required share Ongoing Taxpayers meet their obligations and Canada's revenue base is protected
  • Taxpayer and business assistance
  • Assessment of returns and payment processing
  • Collections and returns compliance
  • Reporting compliance

Description

What are the plans for meeting this priority?

Organizational priorites
Priority Type Footnote 1 Strategic outcomes
Integrity: Maintaining Canadians' trust Ongoing Taxpayers meet their obligations and Canada's revenue base is protected
  • Internal services
  • Appeals

Description

What are the plans for meeting this priority?

Risk analysis

Key risks
Risk Risk response strategy Link to program
alignment
architecture
Aggressive tax planning
  • This is one of the CRA's top risks, because of its potential to affect the achievement of the priority in the area of compliance for the three-year planning period beginning with fiscal year 2014-15.
  • This risk has an action plan in place that will address various schemes such as offshore tax evasion schemes. Additional activities will involve having communication campaigns, closing tax loopholes, and working with international partners to share best practices and other information that will serve to strengthen our compliance activities.
  • More details, including indicators to help measure the effectiveness of strategies, are included in the aggressive tax planning section of this document, located in reporting compliance.
Reporting compliance
Underground economy
  • This is one of the CRA's top risks because it has the potential to interfere with achieving our compliance priority for the three-year planning period beginning with fiscal year 2014-15.
  • Actions over the next three years will focus on a mix of activities such as using communication strategies and undertaking research on emerging trends to help inform and target compliance actions. The CRA will also continue to collaborate with its federal, provincial, and territorial partners to share best practices and develop innovative compliance approaches.
  • More details, including indicators to help measure the effectiveness of strategies, are included in the underground economy section of this document located in reporting compliance.
Reporting compliance
Protection of information
  • This is one of the CRA's top risks, because of its potential to affect the achievement of the priority in the areas of integrity and compliance for the three-year planning period beginning with fiscal year 2014-15.
  • An action plan is in place and will focus on enhancing our approach to managing breaches of integrity and using technology to tighten controls over employee access to sensitive information to ensure the CRA's reputation as a trusted tax administration is maintained.
  • More details, including indicators to help measure the effectiveness of strategies, are included throughout this document, with a concentration in internal services.
Internal services

The CRA operates in a dynamic environment that constantly changes. With these changes come unpredictability, uncertainty, and ultimately risk. The CRA defines a risk as the uncertainty that surrounds future events and outcomes. It is something that may or may not happen, which must be taken into account during decision-making throughout the organization.

Enterprise risk management plays a significant role in strengthening the organization's capacity to recognize, understand, and address risks. To support the use of enterprise risk management, a corporate risk profile is developed every year which identifies and analyzes the enterprise risks that may threaten the achievement of the CRA's mandate.

When identifying risks at the enterprise level, the CRA looks not only at areas of immediate concern, but also at broad areas of potential vulnerability. By identifying and monitoring a broad range of risks, the CRA ensures that it diligently and proactively manages the potential events that could affect its ability to achieve its mandate. These risks represent uncertain future events that may or may not occur, depending on the evolution of the environment.

The following is an analysis of the three risks that could have the highest impact on the CRA's ability to achieve its objectives. Addressing these areas will help to ensure that the risks associated with maintaining the CRA's commitment to service, compliance, integrity, and innovation are well managed.

Managing risks to compliance – underground economy and aggressive tax planning

This year the CRA will continue to address risks related to non-compliance. Efforts will target aggressive tax planning, a major threat for tax administrations globally. The aggressive tax planning risk poses a direct threat to the CRA's ability to collect taxes on behalf of the Government of Canada and as such it was assessed as the top risk. Given that it is heavily influenced by factors outside the CRA's control namely, taxpayer behaviour and the economy, the CRA targets areas where it can demonstrate progress. Recent federal budgets contained several important measures that will help to address aggressive tax shelters and other aggressive tax planning schemes and the CRA will continue to implement additional actions.

Another risk that poses a threat to the revenue base is the underground economy, which has been assessed as the CRA's second highest risk. Actions to address it will target a number of sectors, including those areas where cash transactions are common. The CRA will also focus on delivering communications and outreach activities to educate taxpayers and discourage them from participating in the underground economy.

Managing risks to integrity – protection of information

The Canadian tax system is based on a self-assessment model, where taxpayers are responsible for reporting their own income and taxes owing. As such, maintaining the public's trust is of the utmost importance to the CRA as it has the potential to directly influence compliance rates. While the overwhelming majority of employees act with integrity, the CRA remains diligent in ensuring that its controls are effective in deterring and detecting anyone who may behave otherwise. The CRA is committed to maintaining a strong set of internal controls to prevent the inappropriate access, use, and disclosure of information. It continues to make enhancements to system access controls including the Identity and Access Management Project and the National Audit Trail Monitoring program.

Planned expenditures

Budgetary financial resources (planned spending – dollars) 
2014–15
Main Estimates
2014–15
planned spending Footnote 2
2015–16
planned spending Footnote 2
2016–17
planned spending Footnote 2
3,861,256,109 3,876,796,322 3,775,339,870 3,749,052,873
Human resources (full–time equivalents)
2014–15 2015–16 2016–17
Canada Revenue Agency  38,220 38,040 37,784
Taxpayers' ombudsman 31 31 31
Total (planned) 38,251 38,071 37,815

Budgetary planning summary for strategic outcomes and programs (dollars)

Strategic outcome: Taxpayers meet their obligations and Canada's revenue base is protected
Strategic
outcomes,
programs,
and
internal
services
Expenditures
2011–12
Expenditures 
2012–13
Forecast
spending
2013–14
Main
Estimates
2014–15
Planned
spending
2014–15
Planned
spending
2015–16
Planned
spending
2016–17
Taxpayer and
business
assistance
530,542,287 453,280,238 333,291,371 350,017,682 350,905,225 267,093,889 260,696,720
Assessment of
returns and
payment
processing
642,056,593 643,799,856 625,842,648 597,018,261 598,411,852 619,375,174 613,033,592
Reporting
compliance
1,055,758,459 1,170,473,553 1,121,187,162 1,054,502,522 1,062,102,673 1,052,259,656 1,041,278,958
Collections
and
returns
compliance
521,505,104 512,217,726 502,878,989 440,164,211 440,670,268 441,295,370 445,886,632
Appeals 175,063,571 192,046,153 197,714,416 194,334,428 194,675,861 191,002,004 189,591,545
Strategic
outcome
sub–total
2,924,926,014 2,971,817,526 2,780,914,587 2,636,037,104 2,646,765,879 2,571,026,093 2,550,487,447
Strategic outcome: Eligible families and individuals receive timely and accurate benefit payments
Strategic
outcomes,
programs,
and
internal
services
Expenditures
2011–12
Expenditures
2012–13
Forecast
spending
2013–14
Main
Estimates
2014–15
Planned
spending
2014–15
Planned
spending
2015–16
Planned
spending
2016–17
Benefit
programs
369,783,357 383,719,460 389,407,671 390,354,003 390,442,143 391,983,010 394,904,973
Strategic
outcome
sub–total
369,783,357 383,719,460 389,407,671 390,354,003 390,442,143 391,983,010 394,904,973
Strategic outcome: Taxpayers and benefit recipients receive an independent and impartial review of their service–related complaints
Strategic
outcomes,
programs,
and
internal
services
Expenditures
2011–12
Expenditures
2012–13
Forecast
spending
2013–14
Main
Estimates
2014–15
Planned
spending
2014–15
Planned
spending
2015–16
Planned
spending
2016–17
Taxpayers'
Ombudsman Footnote 3
2,730,896 2,622,557 3,244,301 3,167,366 3,167,366 3,169,366 3,170,366
Strategic
outcome
sub–total
2,730,896 2,622,557 3,244,301 3,167,366 3,167,366 3,169,366 3,170,366
Internal
services
1,053,851,359  960,308,600   1,206,114,880  831,697,636   836,420,934  809,161,401  800,490,087 
Total 4,351,291,626 4,318,468,143 4,379,681,438 3,861,256,109 3,876,796,322  3,775,339,870 3,749,052,873

The reduction in forecast/planned spending over the planning period (from $4.380 billion in 2013–14 to $3.749 billion in 2016–17) is primarily attributable to:

Alignment to Government of Canada outcomes

2014–15 planned spending by Whole–of–Government framework spending area (dollars), see the end note number 7 on page 86.

Strategic outcomes: Taxpayers meet their obligations and Canada's revenue base is protected  
Program Spending area Government of
Canada outcome
2014–15
planned spending
Taxpayer and business assistance Government affairs A transparent, accountable, and responsive federal government 350,905,225
Assessment of returns and payment processing Government affairs Well–managed and efficient government operations 598,411,852
Reporting compliance Government affairs Well–managed and efficient government operations 1,062,102,673
Collections and returns compliance Government affairs Well–managed and efficient government operations 440,670,268
Appeals Government affairs A transparent, accountable, and responsive federal government 194,675,861
Strategic outcomes: Eligible families and individuals receive timely and accurate benefit payments
Program Spending area Government of
Canada outcome
2014–15
planned spending
Benefit programs Economic affairs Income security and employment for Canadians 390,442,143
Strategic outcomes: Taxpayers and benefit recipients receive an independent and impartial review of their service–related complaints
Program Spending area Government of
Canada outcome
2014–15
planned spending

Taxpayers' Ombudsman

Government affairs A transparent, accountable, and responsive federal government 3,167,366

2014–15 planned spending by Whole–of–Government framework spending area (dollars), see the end note number 7 on page 86.

2014–15 planned spending
Spending area 2014–15
planned spending
Economic affairs 390,442,143
Social affairs
International affairs
Government affairs 2,649,933,245

CRA spending trend

Planned spending refers to those amounts for which a Treasury Board submission approval has been received by no later than February 1, 2014. This cut–off date differs from the Main Estimates process. Therefore, planned spending may include amounts incremental to planned expenditure levels presented in the 2014–15 Main Estimates.

As shown in the planned spending trend figure on the right, the total spending includes all parliamentary appropriations (Main Estimates and Supplementary Estimates) and revenue sources. These include funding appropriated to the Canada Revenue Agency for: policy and operational initiatives arising from various federal budgets and economic statements; transfers from the Department of Public Works and Government Services Canada for accommodations and real property services; disbursements under the Softwood Lumber Agreement; responsibilities related to the administration of corporate tax in Ontario and the harmonization of sales tax in Ontario and British Columbia and the children's special allowance payments.

For fiscal years 2011–12 to 2013–14, total spending includes certain technical adjustments, such as the CRA's carry forward adjustments from the previous year and funding for maternity and severance benefits.

 

See table below graph
Planned spending trend (in dollars)
Actuals
2011-2012
Actuals
2012-2013
Forecast
Spending
2013-2014
Planned
Spending
2014-2015
Planned
Spending
2015-2016
Planned
Spending
2016-2017
Sunset Programs 130,396,200 55,534,010 45,000,000
Total Spending 4,610,141,309 4,318,468,143 4,379,681,438 3,746,400,122 3,719,805,860 3,704,052,873

The CRA's appropriations also show a decline in fiscal years 2011–12 to 2016–17 primarily as a result of:

The October 16, 2013 Speech from the Throne signalled that the Government will freeze the overall federal operating budget, which is not reflected in the Main Estimates or this Plan. The CRA is preparing mitigation strategies to enable it to operate within the available operating budget.

The planned spending trend figure also depicts funding in fiscal years 2014–15 to 2016–17 that will eventually "sunset", i.e., related to the Softwood Lumber Agreement (expiring after 2015–16) and the project to upgrade the CRA's personal income tax processing system.

As depicted in the CRA activities figure, over the same period, the CRA's work volumes, as measured by totalling administered revenues and value of benefit payments processed, have been trending upward.

The Federal and Provincial Benefits payments decreased in 2012–2013 due to the sunset of the Ontario Sales Tax transition benefit.

See table below graph
CRA activities (millions of dollars)
2010-11 2011-12 2012-13
Total administered revenues 310,759.9 334,731.5 346,838.3
Federal and provincial benefits payments 22,090.0 22,264.6 21,819.9

Estimates by vote

For information on the CRA's organizational appropriations, see the end note number 2 on page 86.

Contribution to the federal sustainable development strategy

The 2013–16 Federal Sustainable Development Strategy, tabled on November 4, 2013, guides the Government of Canada's 2013–16 sustainable development activities. The strategy articulates Canada's federal sustainable development priorities for a three–year period, as required by the Federal Sustainable Development Act.

The CRA contributes to theme IV – Shrinking the Environmental Footprint – Beginning with Government, as denoted by the visual identifier below.

Theme IV Shrinking the environmental footprint beginning with government Internal services

For more details on the CRA's activities to support sustainable development, see Section II of this document and see end note number 4 on page 86. For complete details on the Federal Sustainable Development Strategy, see the end note number 1 on page 86.

Page details

Date modified: