Report on Plans and Priorities 2016-2017

Section 1: Organizational Expenditure Overview

Organizational Profile

Appropriate Minister: The Honourable Diane Lebouthillier, P.C., M.P.

Institutional Head: Andrew Treusch

Ministerial Portfolio: National Revenue

Enabling Instruments: Canada Revenue Agency Act www.laws-lois.justice.gc.ca/eng/acts/C-10.11/ii

Year of commencement: 1999

Organizational Context

Raison d'être

The Minister of National Revenue is responsible for the Canada Revenue Agency (CRA). The CRA administers tax, benefits and related programs, and ensures compliance on behalf of governments across Canada. The CRA collects the revenues governments need to deliver essential services to Canadians. The CRA processes hundreds of billions of dollars in taxes and issue billions of dollars in benefit and credit payments annually.

The CRA's mandate is to make sure Canadians:

Responsibilities

The Agency has a broad range of responsibilities. In addition to administering the Income Tax Act and the Excise Tax Act, the CRA administers legislation relating to the Canada Pension Plan and the employment insurance program. It also enforces legislation governing charities, collects tobacco taxes and duties, administers registered plans, and collects debts for the federal government.

Serving taxpayers: The CRA gives taxpayers the accurate and timely information they need to comply with Canada's tax laws through its website, call centres, publications, and technical interpretations and rulings. The Agency regulates charities and monitors and administers deferred income and savings plans to make sure they meet legal requirements. It assesses and processes tax returns and payments for individuals and businesses as quickly and accurately as possible.

Promoting and enforcing tax compliance: The CRA identifies, addresses, and deters non-compliance with Canada's tax laws by promoting and enforcing compliance. It conducts outreach activities, provides targeted taxpayer assistance, and educates taxpayers of their tax responsibilities. It undertakes domestic and international examinations, audits, and criminal investigations. It helps to resolve tax debt quickly and it enforces compliance with tax laws for registering, filing, withholding, and paying debt obligations.

Facilitating redress: The CRA provides a fair and impartial redress process to resolve disputes and requests for relief arising from decisions the CRA made. If taxpayers are not satisfied with the outcome of this process, they can appeal to the courts.

Administering benefits: The CRA administers a range of ongoing benefits and one-time payment programs for the provinces and territories and the federal government, such as the Canada child tax benefit, the goods and services tax/harmonized sales tax credit and the universal child care benefit. The Agency makes sure the right benefit payment goes to the right individual at the right time and gives recipients accessible information and timely responses to their enquiries.

Strategic Outcomes and Program Alignment Architecture

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

Program: Taxpayer and Business Assistance
Subprogram
Tax Information Services and Assistance
Charities
Registered Plans
Policy, Rulings, and Interpretations
Charities – Public Safety and Anti-terrorism
Program: Assessment of Returns and Payment Processing Individual Returns
Subprogram
Individual Returns
Business Returns
Payments
Voluntary Disclosures Program
GST/HST Administration in Quebec
Program: Reporting Compliance
Subprogram
International and Large Business
Small and Medium Enterprises
Scientific Research and Experimental Development
Criminal Investigations Program
GST/HST
Program: Collections, Compliance, and Verification
Subprogram
Compliance and Verification
Collections – Tax and Government Programs
Program: Appeals
Subprogram
Income Tax Objections and Appeals to the Courts
Commodity Taxes Objections and Appeals to the Courts
Canada Pension Plan/Employment Insurance Appeals to the Minister and Appeals to the Courts
Service Complaints
Taxpayer Relief

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

Program: Benefit Programs
Subprogram
Statutory Children's Special Allowance Payments
Benefit Enquiries
Benefit Programs Administration

Strategic Outcome: Taxpayers and benefit recipients receive an independent and impartial review of their service-related complaints

Program: Taxpayers' Ombudsman
Subprogam
N/A

Internal Services

Organizational Priorities

Service to Canadians 1
Our vision—We provide service which is fast, easy, convenient, and secure
Planned Initiative Start Date End Date Link to Program Alignment Architecture
Expand digital service options Ongoing March 2019 Assessment of Returns and Payment Processing
Improve external correspondence Ongoing March 2019 Taxpayer and Business Assistance
Improve telephone service Ongoing March 2019  Taxpayer and Business Assistance
Service to small and medium enterprises 1
Our vision—Reducing the compliance burden on small and medium enterprises
Planned Initiative Start Date End Date Link to Program Alignment Architecture
Reduce the compliance burden Ongoing March 2019  Reporting compliance
Expand online services for small and medium businesses Ongoing March 2019  Assessment of Returns and Payment Processing
Compliance 1
Our vision—Making it easy for taxpayers who want to comply and difficult for those who do not 
Planned Initiative Start Date End Date Link to Program Alignment Architecture
Fight the underground economy Ongoing March 2019 Reporting Compliance
Combat international tax evasion Ongoing March 2019 Reporting Compliance
Fight tax evasion Ongoing March 2019 Reporting Compliance
Integrity and Security 1
Our vision—We set the highest standards and make sure we meet those standards 
Planned Initiative Start Date End Date Link to Program Alignment Architecture
Safeguard personal client information Ongoing March 2019 Internal services
Innovation 1
Our vision—We encourage new ideas and move quickly with those that work
Planned Initiative Start Date End Date Link to Program Alignment Architecture
Implement innovative approaches to service and compliance Ongoing March 2019 Assessment of Returns and Payment
Our People 1
Our vision—We are a high-performing, diverse workforce embracing new ways of working 
Planned Initiative Start Date End Date Link to Program Alignment Architecture
Maintain and build a knowledgeable workforce Ongoing March 2019 Internal Services

For more information on organizational priorities, see the Minister's mandate letter on the Prime Minister of Canada's websiteiii.

Risk Analysis

Key Risks
Risk Risk Response Strategy  Link to Program Alignment Architecture
Cyber security  Cyber security is a key risk under the CRA's priority of security and integrity. This is because if it is not well managed, it could threaten the CRA's information holdings and ability to deliver services. The CRA defines cyber security as all breaches from parties outside of the CRA. These could include viruses, malwares that take advantage of weaknesses in operating systems and application software, distributed denial of service attacks, phishing campaigns, and password theft. The CRA maintains robust security controls. As the sophistication and volume of cyber threats continues to increase, the CRA will remain proactive and forward-looking in its security.
Several initiatives are under way, such as the Data Security Initiative, the Identity and Access Management project, and the National Audit Trail System Modernization project. These initiatives will further enhance the Agency's protection of its data and technology assets and mitigate this risk. 
Internal Services
Compliance  Promoting, supporting, and enforcing all aspects of compliance is a cornerstone of the CRA's mission. The top compliance risks are offshore assets, transfer pricing, digital commerce, and the sharing economy. They are the top risks because of the impact they could have on the CRA's ability to protect Canada's revenue base and on public confidence in the fairness and integrity of the tax system. The CRA is working on several fronts to address these risks. For offshore assets and structures, the CRA has started implementing new measures to combat international tax evasion and aggressive tax avoidance. Additional resources are being allocated to crack down on tax evaders and work with international partners to adopt strategies to combat tax avoidance. To address instances of transfer pricing exploitation, the CRA is coordinating and collaborating closely with its international partners on several initiatives. The primary body of work in this area is being done as part of the OECD Base Erosion and Profit Shifting projectiv.
Digital commerce and the sharing economy are means that individuals and businesses may deliberately exploit to underreport their income and avoid paying taxes. The Agency will continue to expand its range of strategies to detect and deter deliberate non-compliance. These strategies include specialized audit techniques to identify sectors with a high degree of risk of unreported income. 
Reporting Compliance
Business intelligence Business intelligence is a key risk area under the CRA's priority of innovation. This is because of the far-reaching opportunities it presents to enhance strategies for compliance, services, and debt collection. Business intelligence encompasses big data to improve non-compliance detection (predictive analytics) and behavioural economics (such as "nudging") to improve compliance. Key aspects of this risk are mining accessible data, developing tools and methodologies, and acquiring and developing subject matter expertise. Two major initiatives, the Business Intelligence Renewal initiative and the Managed Metadata Environment project, are under way. Supported by the CRA's Business Intelligence Strategy, headway in these areas will result in new innovative practices that will allow the CRA to enhance its business intelligence capabilities.  Internal Services

The CRA proactively scans, identifies, assesses, and addresses key risks both external and internal to the organization in a constantly changing environment. It does this through the its Corporate Risk Profile. Focusing on the top risks and putting plans into motion to help reduce risk exposure where needed will position the Agency to deliver on its strategic priorities in support of its mandate to Canadians.

Integrity and Security – Cyber Security

The Agency continues to apply the highest level of integrity and security to protect taxpayer information and maintain public trust. With the increasing demand for digital services and the ever growing accumulation of digital records, the CRA continues to evolve its practices to keep pace with the sophistication and volume of cyber threats. To that end, the CRA will continue to work closely with its partners to make sure all appropriate systems, controls, and safeguards are in place.

Compliance

International tax evasion is a global problem. And many countries recognize that combatting it is important for protecting their national revenue base and the integrity and fairness of their tax systems. In response, the CRA is increasing its collaboration with other countries, through the OECD/G20 Base Erosion and Profit Shifting Project and, the new Joint International Tax Shelter Information and Collaboration Network. This will better allow the CRA to counter cross-border tax evasion and close the gaps in existing international rules.

New technologies have impacted on compliance. As a result the CRA is evolving its non-compliance detection techniques for activities related to digital payment systems, digital currencies, and online sharing platforms.

Innovation – Business intelligence

Innovation for the CRA is about finding new solutions, and doing things better, more efficiently, and in new ways. Business intelligence is one of the enablers for innovative solutions. The CRA considers business intelligence an opportunity risk. This is because the range of benefits could include enhancing the detection of non-compliance, influencing taxpayer behaviour, better informing revenue administration policy research, and improving services to Canadians. This risk is driven by the accessibility to big volume, complex data, as well as by the strength of the Agency's human resources capacity through its recruitment and development of a specialized workforce.

Planned Expenditures

The financial and human resource information presented in this plan includes all of those items for which the Canada Revenue Agency has received approval as of February 1, 2016. Any approvals for funding adjustments received after that date will be reflected in future documents.

Budgetary Financial Resources
(dollars) 2016-17
Main Estimates
2016-17
Planned
2017-18
Planned
2018-19
Planned
Canada Revenue Agency 4,082,482,329 4,082,482,329 3,928,125,099 3,918,631,281
Taxpayers' Ombudsman 3,235,854 3,235,854 3,227,940 3,234,541
Total 4,085,718,183 4,085,718,183 3,931,353,039 3,921,865,822
Human Resources
(full-time equivalents) 2016-17
Planned
2017-18
Planned
2018-19
Planned
Canada Revenue Agency 37,847 37,444   36,971
Taxpayers' Ombudsman 31 31 31
Total 37,878  37,475 37,002

Budgetary Planning Summary for Strategic Outcomes and Programs (dollars)

Strategic Outcome: Taxpayers meet their obligations and Canada's revenue base is protected
Program 2013-14 Expenditures  2014-15 Expenditures 2015-16 Forecast Spending 2016-17
Main Estimates
2016-17
Planned Spending
2017-18
Planned Spending
2018-19
Planned Spending
Taxpayer and Business Assistance 350,801,699 292,809,925 290,364,894 412,286,804 412,286,804 280,544,765 281,256,789
Assessment of Returns and Payment Processing 649,108,155 640,377,518 687,698,295 503,182,149  503,182,149 496,115,166 493,780,046
Reporting Compliance 1,084,562,230 1,108,667,741 1,092,386,302 1,067,140,214 1,067,140,214 1,062,160,684  1,054,616,518
Collections, Compliance, and Verification 496,787,602 519,837,234 491,303,158 632,051,666  632,051,666 618,542,264 616,220,531
Appeals 190,219,456 204,406,362 182,669,682  185,568,739 185,568,739 185,234,324 185,573,890
Subtotal 2,771,479,142 2,766,098,780 2,744,422,331 2,800,229,572  2,800,229,572 2,642,597,203  2,631,447,774
Strategic Outcome: Eligible families and individuals receive timely and accurate benefit payments
Program 2013-14 Expenditures  2014-15 Expenditures 2015-16 Forecast Spending 2016-17
Main Estimates
2016-17
Planned Spending
2017-18
Planned Spending
2018-19
Planned Spending
Benefit Programs 374,414,324 351,409,527 389,834,229 434,832,503   434,832,503 441,578,904 447,739,404
Subtotal 374,414,324 351,409,527 389,834,229 434,832,503  434,832,503  441,578,904 447,739,404
Strategic Outcome: Taxpayers and benefit recipients receive an independent and impartial review of their service-related complaints
Program 2013-14 Expenditures  2014-15 Expenditures 2015-16 Forecast Spending 2016-17
Main Estimates
2016-17
Planned Spending
2017-18
Planned Spending
2018-19
Planned Spending
Taxpayers' Ombudsman2 2,524,101 2,614,097 3,261,289  3,235,854 3,235,854 3,227,940 3,234,541
Subtotal  2,524,101  2,614,097 3,261,289 3,235,854  3,235,854 3,227,940  3,234,541
Internal Services
Subtotal 2013-14 Expenditures  2014-15 Expenditures 2015-16 Forecast Spending 2016-17
Main Estimates
2016-17
Planned Spending
2017-18
Planned Spending
2018-19
Planned Spending
Internal Services Subtotal 914,441,789 940,711,586 1,084,008,294 847,420,254 847,420,254 843,948,992 839,444,103
Total
  2013-14 Expenditures  2014-15 Expenditures 2015-16 Forecast Spending 2016-17
Main Estimates
2016-17
Planned Spending
2017-18
Planned Spending
2018-19
Planned Spending
Total 4,062,859,356 4,060,833,990 4,221,526,143 4,085,718,183 4,085,718,183 3,931,353,039 3,921,865,822

The reduction in Forecast and Planned Spending over the planning period (from $4.222 billion in 2015-16 to $3.922 billion in 2018-19) is primarily attributable to:

Alignment of Spending With the Whole-of-Government Framework

Alignment of 2016-17 Planned Spending With the Whole-of-Government Frameworkv (dollars)

Strategic Outcome: Taxpayers meet their obligations and Canada's revenue base is protected
Program    Spending Area Government of Canada Outcome 2016-17 Planned Spending
Taxpayer and Business Assistance Government Affairs A transparent, accountable and responsive federal government 412,286,804
Assessment of Returns and Payment Processing Government Affairs Well-managed and efficient government operations 503,182,149
Reporting Compliance   Government Affairs Well-managed and efficient government operations 1,067,140,214
Collections, Compliance, and Verification   Government Affairs Well-managed and efficient government operations 632,051,666
Appeals Government Affairs   Government Affairs A transparent, accountable and responsive federal government 185,568,739
Strategic Outcome: Eligible families and individuals receive timely and accurate benefit payments
Program    Spending Area Government of Canada Outcome 2016-17 Planned Spending
Benefit Programs Economic Affairs Income security and employment for Canadians  434,832,503
Strategic Outcome: Taxpayers and benefit recipients receive an independent and impartial review of their service-related complaints
Program    Spending Area Government of Canada Outcome 2016-17 Planned Spending
Taxpayers' Ombudsman Government Affairs A transparent, accountable and responsive federal government 3,235,854
Total Spending by Spending Area (dollars)
Spending Area Total Planned Spending
Economic affairs  434,832,503
Social affairs
International affairs
Government affairs  2,803,465,426

CRA Spending Trend

Chart described in the table below

 

CRA spending trend
(dollars) 2013-14 Actuals 2014-15 Actuals 2015-16 Forecast Spending 2016-17 Planned Spending 2017-18 Planned Spending 2018-19 Planned Spending
Statutory authorities 902,057,364 817,112,935 833,651,118 1,016,533,269 887,439,425 889,761,756
Voted 3,160,801,992 3,243,721,055 3,387,875,025 3,069,184,914 3,043,913,614 3,032,104,066
Total 4,062,859,356 4,060,833,990 4,221,526,143 4,085,718,183 3,931,353,039 3,921,865,822

Planned Spending refers to amounts in Main Estimates, as well as any other additional funding for inclusion in the Agency's reference levels, approved by Treasury Board no later than February 1, 2016. In fiscal year 2016-17 Planned Spending is identical to expenditure levels presented in the Main Estimates.

The Planned Spending trend shows all parliamentary appropriations (Main Estimates and Supplementary Estimates) and revenue sources provided to the Canada Revenue Agency for: policy and operational initiatives arising from various federal budgets and economic statements; transfers from the Department of Public Services and Procurement Canada for accommodations and real property services; disbursements under the Softwood Lumber Agreement; responsibilities related to the harmonization of sales tax; the children's special allowance payments, as well as the implementation of initiatives to improve efficiency.

Total spending for fiscal years 2013-14 to 2015-16, also includes certain technical adjustments such as the CRA's carry forward adjustments from the previous year and funding for maternity and severance benefits.

Over the period 2013-14 to 2018-19, the CRA's appropriations show a decline, primarily as a result of the funding received for the upgrade of the individual income tax processing system and various wage settlements being more than offset by decreases due to the following:

Estimates by Vote

For more information on the CRA's organizational appropriations, consult the 2016-17 Main Estimatesvi.


Table Notes

1 This priority is ongoing–committed to at least three fiscal years prior to the subject year of the report.

2 Since the Taxpayers' Ombudsman operates at arm's-length from the CRA, this report does not reflect the activities of that office.

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