Supplementary information tables
CRA Sustainable Development Strategy
Information on the CRA Sustainable Development Strategy is available on the CRA's website.
Details on transfer payment programs of $5 million or more
| Name of transfer payment program | Children's Special Allowance Payments (Statutory) |
| Start date | August 28, 1995Footnote 1 |
| End date | Ongoing |
| Type of transfer payment | Other transfer payment |
| Type of appropriation | Children's Special Allowance Act (Statutory) |
| Fiscal year for terms and conditions | 2017‐18 |
| Link to department’s Program Inventory | Benefits |
| Description | Tax‐free monthly payments made to agencies and foster parents who are licensed by provincial or federal governments to provide for the care and education of children under the age of 18 who physically reside in Canada and who are not in the care of their parents. Children's Special Allowance payments are equivalent to Canada child benefit payments and are governed by the Children's Special Allowances Act, which provides that this allowance be paid out of the Consolidated Revenue Fund. |
| Departmental result | Canadians receive their rightful benefits in a timely manner |
| Fiscal year of last completed evaluation | Not applicable |
| Decision following the results of last evaluation | Not applicable |
| Fiscal year of planned completion of next evaluation | Not applicable |
| General targeted recipient groups | Persons |
| Initiatives to engage applicants and recipients | Not applicable |
| Type of transfer payment | 2017‐18 Forecast spending | 2018‐19 Planned spending | 2019‐20 Planned spending | 2020‐21 Planned spending |
|---|---|---|---|---|
| Total grants | – | – | – | – |
| Total contributions | – | – | – | – |
| Total other types of transfer paymentsFootnote 2 | 340,000,000 | 335,000,000 | 335,000,000 | 339,000,000 |
| Total program | 340,000,000 | 335,000,000 | 335,000,000 | 339,000,000 |
Future-Oriented Statement of Operations
Statement of Management Responsibility
We have prepared the accompanying Future-oriented Statement of Operations (FOSO) of the Canada Revenue Agency (CRA) for Agency activities, which includes only those operational revenues and expenses which are managed by the CRA and utilized in running the organization. It is prepared according to the accounting principles consistent with those applied in preparing the financial statements of the Government of Canada. No FOSO was prepared for Administered Activities because it is analogous to information presented by the Department of Finance. Significant accounting policies are set out in note 4 of the FOSO. The FOSO is submitted for Part III of the Estimates (Departmental Plan). The information will also be presented in the CRA's Departmental Results Report to compare with actual results.
Management is responsible for the integrity and objectivity of the information contained in this FOSO and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of governmental priorities and consistency in the CRA's mandate and strategic objectives. Much of the FOSO is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of this Statement of Operations, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.
The actual results achieved for the fiscal years covered in the accompanying FOSO will vary from the information presented and the variations may be material.
Approved by:
Original signed
Bob Hamilton
Commissioner of Revenue and
Chief Executive Officer of the CRA
Original signed
Kami Ramcharan
Chief Financial Officer and
Assistant Commissioner,
Finance and Administration
Ottawa, Ontario
January 22, 2018
Canada Revenue Agency
Future-Oriented Statement of Operations – Agency Activities
| Estimated results 2018 | Planned results 2019 | |
|---|---|---|
| Expenses (note 6) | ||
| Tax | 3,475,369 | 3,493,743 |
| Internal services | 1,297,953 | 1,280,590 |
| Benefits | 162,972 | 164,483 |
| Taxpayers' Ombudsman | 3,485 | 3,528 |
| Total expenses | 4,939,779 | 4,942,344 |
| Non‐Tax Revenues (note 7) | ||
| Tax | 418,322 | 408,747 |
| Internal services | 148,687 | 148,383 |
| Benefits | 22,890 | 22,242 |
| Revenues earned on behalf of Government | (72,204) | (70,991) |
| Total non‐tax revenues | 517,695 | 508,381 |
| Net cost of operations | 4,422,084 | 4,433,963 |
| The accompanying notes are an integral part of this future‐oriented statement of operations. | ||
Notes to the Future-Oriented Statement of Operations – Agency Activities
1. Authority and objectives
The Canada Revenue Agency (CRA) is an agent of Her Majesty in right of Canada under the Canada Revenue Agency Act. The CRA is a departmental corporation named in Schedule II of the Financial Administration Act and reports to Parliament through the Minister of National Revenue.
The mandate of the CRA is to support the administration and enforcement of tax legislation and other related legislation. The CRA provides support, advice, and services by:
a) supporting the administration and enforcement of program legislation;
b) implementing agreements between the Government of Canada or the CRA and the government of a province, territory or other public body performing a function of government in Canada to carry out an activity or administer a tax or program;
c) implementing agreements or arrangements between the CRA and departments or agencies of the Government of Canada to carry out an activity or administer a program; and
d) implementing agreements between the Government of Canada and First Nations governments to administer a tax.
The CRA collects revenues, including income and sales taxes and employment insurance premiums, administers tax legislation, delivers a number of social benefit programs to Canadians for the federal, provincial, territorial, and First Nations governments, and collects amounts, including Canada Pension Plan contributions, for other groups or organizations. It is responsible for administering and enforcing of the following acts or parts of acts: the Air Travellers Security Charge Act, the Canada Revenue Agency Act, the Children's Special Allowances Act, Part V.1 of the Customs Act, section 2 of the Energy Costs Assistance Measures Act, the Excise Act, the Excise Tax Act (including the goods and services tax (GST) and the harmonized sales tax (HST) except for GST/HST on imported goods), the Excise Act, 2001, the Income Tax Act, the Softwood Lumber Products Export Charge Act, 2006, the Universal Child Care Benefit Act, and others including various provincial acts.
In delivering its mandate, the CRA operates under the following core responsibilities:
(a) Tax: to ensure that Canada's voluntary self-assessment tax system is sustained by providing taxpayers with the support and information they need to understand and fulfil their tax obligations, and by taking compliance and enforcement action when necessary to uphold the integrity of the system, offering avenues for redress whenever taxpayers may disagree with an assessment/decision;
(b) Internal services: Internal services are those groups of related activities and resources that the Federal Government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal services refer to the activities and resources that support program delivery in the organization, such as human resources management, financial management and information technology;
(c) Benefits: to ensure that Canadians obtain the support and information they need to know what benefits they may be eligible to receive, that they receive their benefit payments in a timely manner, and have avenues of redress when they disagree with a decision on their benefit eligibility;
(d) Taxpayers' Ombudsman: Canadians have access to trusted and independent review of service complaints about the CRA.
2. Methodology and significant assumptions
The Future-oriented Statement of Operations has been prepared on the basis of government priorities and Agency plans as described in the Departmental Plan.
The information in the estimated results for fiscal year 2017-2018 is primarily based on actual results as at October 31, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2018-2019 fiscal year.
The main assumptions underlying the forecasts are as follows:
(a) The CRA's activities will remain substantially the same as the previous year.
(b) Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
3. Variations and changes to the forecast financial information
While every attempt has been made to forecast final results for the remainder of 2017-2018 and for 2018-2019, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing this Future-oriented Statement of Operations the CRA has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Factors that could lead to material differences between the Future-oriented Statement of Operations and the historical statement of operations include:
(a) Implementation of new collective agreements.
(b) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
(c) The timing and amount of acquisitions and disposals of tangible capital assets may affect amortization expense and gains/losses.
Once the Departmental Plan is presented, the CRA will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.
4. Summary of significant accounting policies
For financial reporting purposes, the CRA's activities have been divided into two sets of financial statements: agency activities and administered activities. The Future-oriented Statement of Operations – Agency Activities include only those operational revenues and expenses which are managed by the CRA and utilized in running the organization. The purpose of the distinction between agency and administered activities is to facilitate, among other things, the assessment of the administrative efficiency of the CRA in achieving its mandate. No future-oriented financial statement was prepared for Administered Activities because it is analogous to information presented by the Department of Finance.
The Future-oriented Statement of Operations – Agency Activities has been prepared using Government's accounting policies in effect for the year ending March 31, 2017 which are based on Canadian public sector accounting standards. A summary of significant accounting policies follows:
(a) Parliamentary appropriations
The CRA is financed by the Government of Canada through Parliamentary appropriations. Accounting for appropriations provided to the CRA does not parallel financial reporting according to Canadian public sector accounting standards, as they are based in large part on cash flow requirements. Consequently, items recognized in the Future-oriented Statement of Operations may be different from those provided through appropriations from Parliament. Note 5(b) provides a high-level reconciliation between the two bases of reporting.
(b) Expenses
Expenses for the CRA's operations are recognized, on an accrual basis, when goods are received and/or services are rendered.
(i) Services provided without charge from other government agencies and departments
Costs for services received without charge from other government agencies and departments are included in expenses and are recognized at their estimated cost (see note 8).
(ii) Vacation pay and compensatory leave
Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
(iii) Employee benefits
(iii.1) Pension benefits
All eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The CRA's contributions reflect the full cost as employer. These amounts are currently based on a multiple of an employee's required contributions and may change over time depending on the experience of the Plan. The CRA's contributions are expensed during the year in which the services are rendered.
(iii.2) Health and dental benefits
The Government of Canada sponsors employee benefit plans (health and dental) in which the CRA participates. Employees are entitled to health and dental benefits, as provided for under labour contracts and conditions of employment. The CRA's contributions to the plan, which are provided without charge by the Treasury Board Secretariat, are recorded at cost based on a percentage of the salary expenses and charged to personnel expenses in the year incurred.
(iii.3) Severance benefits
Employees no longer accrue severance benefits. The accumulation of severance benefits ceased for the last eligible employee group on October 31, 2016. The severance benefits plan still includes the accumulated severance benefits of the employees who have opted to collect the full or partial value of their benefits upon termination from the public service. Changes in actuarial assumptions and any variance between the expected and the actual experience of the severance benefits plan give rise to actuarial gains or losses. These gains or losses are not recognized immediately but amortized on a straight-line basis over the expected average remaining service life of the employees starting in the fiscal year following the one in which they arose.
(iii.4) Sick leave benefits
Employees are eligible to accumulate sick leave benefits until retirement or termination according to their terms of employment. Sick leave benefits are earned based on employee services rendered and are paid upon an illness or injury related absence. These are accumulating non-vesting benefits that can be carried forward to future years, but are not eligible for payment on retirement or termination, nor can these be used for any other purpose.
(iv) Allowance for doubtful accounts
An allowance for doubtful accounts is recorded where the recovery of account receivables and advances is considered uncertain.
(v) Amortization of tangible capital assets
All initial costs of $10,000 or more incurred by the CRA to acquire or develop tangible capital assets are capitalized and amortized over the useful lives of the assets. Similar items under $10,000 are expensed. Tangible capital assets are amortized on a straight-line basis over the estimated useful lives of assets as follows:
| Asset class | Useful life |
|---|---|
| Machinery, equipment, and furniture | 10 years |
| In-house developed software | 5-10 years |
| Vehicles and other means of transportation | 5 years |
| Information technology equipment | 5 years |
| Purchased software | 3 years |
Assets under construction/development are not amortized until completed and put into operation.
(vi) Provision for contingent liabilities
Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded.
c) Revenues
Non-tax revenues are recognized when the services are rendered by the CRA.
Non-tax revenues that are not available for spending cannot be used to discharge the CRA's liabilities. While management is expected to maintain accounting control, it has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the CRA’s gross revenues.
5. Parliamentary appropriations
The CRA receives most of its funding through annual Parliamentary appropriations. Items recognized in the Future-oriented Statement of Operations in one year may be funded through Parliamentary appropriations in prior, current, or future years. Accordingly, the CRA has different net results of operations for the year on a government funding basis than on an accrual accounting basis. These differences are reconciled below.
a) Reconciliation of Parliamentary appropriations to be provided and requested:
Estimated results 2018 |
Planned results 2019 |
|
| Parliamentary appropriations — to be provided: | (in thousands of dollars) | |
| Vote 1 – Operating expenditures, contributions and recoverable expenses on behalf of the Canada Pension Plan and the Employment Insurance Act | 3,797,165 | 3,289,230 |
| Vote 5 – Capital expenditures | 80,802 | 71,922 |
| Spending of revenues received through the conduct of its operation pursuant to section 60 of the Canada Revenue Agency Act | 169,727 | 159,856 |
| Statutory expenditures: | ||
| Contributions to employee benefit plans | 432,668 | 421,668 |
| Children’s Special Allowance PaymentsFootnote 3 | 340,000 | 335,000 |
| Minister of National Revenue – Salary and motor car allowance | 84 | 86 |
| 4,820,446 | 4,277,762 | |
| Less: | ||
| Appropriations available for future yearsFootnote 4 ‐ Vote 1 | (71,890) | ‐ |
| Appropriations available for future yearsFootnote 4 ‐ Vote 5 | (1,147) | ‐ |
| Expenditures related to Administered ActivitiesFootnote 3 | (340,000) | (335,000) |
| (413,037) | (335,000) | |
| Total Parliamentary appropriations to be requested | 4,407,409 | 3,942,762 |
| Estimated results 2018 | Planned results 2019 | |
|---|---|---|
| (in thousands of dollars) | ||
| Net cost of operations | 4,422,084 | 4,433,963 |
| Expenses not requiring the use of current year appropriations: | ||
| Amortization of tangible capital assets | (96,319) | (102,209) |
| Loss on disposal/write-off of tangible capital assets | (2,085) | (772) |
| Services to be provided without charge from other government agencies and departments | (502,512) | (449,902) |
| Severance benefits paid | (4,325) | (39,478) |
| Other | (381) | (31,035) |
| (605,622) | (623,396) | |
| Changes to assets affecting appropriations: | ||
| Tangible capital assets acquisitions | 96,138 | 88,708 |
| Salary advances and overpayments | 4,932 | 4,932 |
| 101,070 | 93,640 | |
| Changes in future funding requirements: | ||
| Salary, vacation pay and compensatory leave | 49,213 | (133,573) |
| Employee severance benefits | 279,784 | 24,158 |
| Employee sick leave benefits | (8,847) | (11,886) |
| 320,150 | (121,301) | |
| Non‐tax revenues available for spending (note 7) | 169,727 | 159,856 |
| Total Parliamentary appropriations to be requested | 4,407,409 | 3,942,762 |
6. Expenses by category
In the Future-oriented Statement of Operations, expenses are presented by core responsibility. The following presents expenses by category.
| Estimated results 2018 | Planned results 2019 | |
|---|---|---|
| (in thousands of dollars) | ||
| Personnel: | ||
| Salaries | 2,630,562 | 2,683,863 |
| Other allowances and benefits (including employee benefits) | 1,018,609 | 957,972 |
| 3,649,171 | 3,641,835 | |
| Professional and business services | 617,191 | 640,628 |
| Accommodation | 313,863 | 286,310 |
| Transportation and communications | 132,416 | 137,445 |
| Amortization of tangible capital assets | 96,319 | 102,209 |
| Other services and expenses | 40,441 | 41,976 |
| Equipment purchases | 23,593 | 24,489 |
| Repair and maintenance | 19,624 | 20,370 |
| Materials and supplies | 19,255 | 19,986 |
| Interest on average accrued benefit obligations | 18,773 | 19,008 |
| Advertising, information and printing services | 4,439 | 4,608 |
| Equipment rentals | 2,609 | 2,708 |
| Loss on disposal/write‐off of tangible capital assets | 2,085 | 772 |
| Total expenses | 4,939,779 | 4,942,344 |
7. Non-tax revenues by category
In the Future-oriented Statement of Operations, non-tax revenues are presented by core responsibility. The following presents non-tax revenues by category. The nature of each category is defined by the treatment permitted from a Parliamentary appropriations perspective.
| Estimated results 2018 | Planned results 2019 | |
|---|---|---|
| (in thousands of dollars) | ||
| Non‐tax revenues credited to Vote 1 | ||
| Fees for administering the Employment Insurance Act | 181,123 | 179,270 |
| Fees for administering the Canada Pension Plan | 166,845 | 169,255 |
| 347,968 | 348,525 | |
| Non‐tax revenues available for spending | ||
| Administration fees – provinces and territories | 116,304 | 109,540 |
| Services fees | 50,265 | 47,342 |
| Miscellaneous respendable revenues | 3,158 | 2,974 |
| 169,727 | 159,856 | |
| Non‐tax revenues not available for spending | ||
| Recovery of employee benefit costs relating to non‐tax revenue credited to Vote 1 and revenues available for spending | 71,648 | 70,435 |
| Miscellaneous non‐tax revenues | 556 | 556 |
| 72,204 | 70,991 | |
| Total non‐tax revenues before revenues earned on behalf of Government | 589,899 | 579,372 |
| Revenues earned on behalf of Government | (72,204) | (70,991) |
| Total non‐tax revenues | 517,695 | 508,381 |
8. Related party transactions
The CRA is related in terms of common ownership to all Government of Canada departments, agencies, and Crown corporations. Transactions with Crown corporations entered into by the CRA are in the normal course of business and on normal trade terms applicable to all individuals and enterprises. Transactions with other Government of Canada departments and agencies are conducted on a cost recovery basis.
The CRA is expected to receive various services without charge from other government agencies and departments in the coming years. The estimated costs for significant services to be provided without charge include:
| Estimated results 2018 | Planned results 2019 | |
|---|---|---|
| (in thousands of dollars) | ||
| Employer’s contribution to the health and dental insurance plans – Treasury Board Secretariat | 288,498 | 235,801 |
| Information technology services ‐ Shared Services Canada | 179,474 | 179,474 |
| Legal services – Justice Canada | 26,307 | 26,515 |
| Payroll services – Public Services and Procurement Canada | 4,396 | 4,331 |
| Audit services – Office of the Auditor General of Canada | 2,711 | 2,711 |
| Workers’ compensation benefits – Employment and Social Development Canada | 1,126 | 1,070 |
| Total | 502,512 | 449,902 |
| Governance structures | The Canada Revenue Agency (CRA) develops an annual GBA+ action plan to support the full implementation of GBA+ in the development of programs and services to Canadians. To ensure progress against the plan, the GBA+ Centre of Responsibility conducts a mid‐year assessment to identify challenges and barriers to implementation, and takes the necessary corrective measures to ensure progress continues. The CRA formally reports on its GBA+ annual action plan in the Departmental Results Report. The GBA+ Centre of Responsibility reports regularly to the CRA’s executive GBA+ Champion, and periodically to the Director General Planning and Reporting Committee. In addition, the CRA will consider the results of the Status of Women Canada’s annual interdepartmental GBA+ implementation survey to evaluate our progress and ensure that we have the organizational capacity to meet the evolving GBA+ requirements. The CRA has also developed a communication strategy for 2017‐2018 towards promoting and raising awareness and understanding of GBA+ requirements across the Agency. |
| Human resources | The Responsibility Centre consists of 2 full‐time and 2 part‐time resources, each of whom are partly dedicated to GBA+ (in total, accounting for approximately 1 FTE). These resources review and provide guidance and hands‐on support to the CRA offices of primary interest conducting GBA+ in support of government initiatives. They also develop communications and training products, participate at the interdepartmental level in GBA+ working groups, monitor GBA+ implementation, and report on progress in the Departmental Results Report. The GBA+ focal points in the Centre of Responsibility have been trained, and are required to follow the Introduction to GBA+ online course, as well as attend the Status of Women Canada’s annual GBA+ focal point training offered at the Centre for Intercultural Learning. |
| Planned initiatives | To ensure that GBA+ is integrated into departmental decision‐making processes, initiatives planned for 2018‐2019 include:
|
Operating context and key risks
Operating context
Canadian society–along with the business and political landscape worldwide–is evolving at an ever-faster rate as a result of technology, demographics, changing societal values, and economic realities. Today’s world is one in which businesses must compete globally for talent and markets; the public expects services to be available 24/7–from any location and any technology–and governments must actively collaborate internationally to protect their revenue streams from abusive tax avoidance. In this fast paced environment, tax administration is a key enabler of government objectives.
The borderless nature of modern commerce creates increasing complexity for tax administrations as it becomes less clear where income is earned and where tax should be paid. In addition, the emergence of blockchain technology applications have expanded from digital currencies to a diverse array of industries. Meanwhile, entities offering digital financial services, involving e-money and peer-to-peer lending, stretch the bounds of current monetary and tax policies. However, the reach of globalization goes beyond large corporations: tax agencies must also consider cross-border compliance by individuals and small businesses. Tax administrations, including the CRA, are responding to this new reality.
Internally, the Agency is working diligently to overcome additional, distinct challenges. For example, the recent implementation of Service Renewal necessitated unprecedented volumes of newly hired staff, all requiring training and a learning period which temporarily reduced productivity. Issues raised by the Auditor General regarding accessibility to our call centres, the accuracy of information provided to callers, and the reporting of results, will need to be addressed. Ongoing difficulties with the Phoenix pay system, and employee engagement issues related to a modernization exercise in the Greater Toronto Area are other examples of challenges that require a constant capacity to adapt and adjust.
Key risks
The CRA’s risk management process follows an all-hazards approach of identifying, analyzing, and prioritizing the full range of potential enterprise risks. As the Corporate Risk Profile (CRP) is a cyclical process, updates and amendments are applied to the previous year’s portfolio as a result of changes in the environment. The CRP ensures that the CRA has a risk management process that takes a proactive approach to help position the Agency to protect the integrity and fairness of the Canadian tax system, identify efficiencies in operational processes, and achieve results. The top enterprise risks outlined are monitored on an ongoing basis to ensure that senior management has the foresight to successfully prevent, respond to, or mitigate major risks and, seize new opportunities to innovate.
This year, the five key Corporate Risk Profile risks identified were cyber security, pace of delivery, offshore assets/tax planning, digital commerce, and service channels. The prioritization of these risks reflects their potential impact on the CRA’s commitment to service, compliance, integrity, security, and innovation. By making sure that its risks are properly identified and managed, the CRA continues to be well positioned to deliver on its mandate and to maintain the trust and confidence of taxpayers.
Risk |
Likelyhood |
Impact |
Risk response strategy |
Cyber security: there is risk that cyber threats will compromise CRA services and taxpayer information. Cyber security encompasses all external breaches due to actions of parties outside the CRA. There is an increase in the prevalence and sophistication of cyber threats (cybercrime, cyber terrorism) as well as the scale of recent breaches internationally. Cyber attacks can both threaten the CRA's ability to deliver services as well as its information holdings. The CRA is collecting more information and creating larger data sets which could be at target for potential extraction. Protecting services and taxpayer information from external‐attacks is both a Government of Canada and CRA priority. |
Medium | High | The CRA remains proactive and forward‐looking in its management of cyber‐threats. The Agency has a number information technology (IT) security projects, an Agency Security Plan, and closely aligns to the Communications Security Establishment Top Ten IT Security Countermeasures which all contribute to protecting the CRA's data and technology assets and decrease the exposure of this risk. |
Pace of delivery: there is a risk that the speed and expected outcomes in implementing operational change will not respond to the expectations of Canadians and of the Government. Pace of delivery is a risk given the number and complexity of Minister and Budget commitments, as well, the scope and scale of the Agency's major investment projects. If not monitored closely, the implementation of these organizational changes could impact the Agency's ability to meet expected outcomes. Challenges may arise in the Agency's ability to implement the administrative processes and systems from legislative changes in a timely manner due to volume and limited capacity (ex. cannabis and carbon tax). |
Medium | High | The CRA is addressing this risk through the new federal government reporting framework. The new structure will provide the opportunity to communicate a more comprehensive performance story. Our performance indicators have been modified and new measures added in order to better track and monitor the Agency's spending on real outcomes. The Departmental Results Framework allows the Agency to focus on and measure ministerial priorities and Budget commitments. |
Offshore assets/tax planning: there is a risk that taxpayers will house their assets outside of Canada so that the CRA cannot identify income earned and collect taxes owing. Some taxpayers may shift assets to offshore jurisdictions to avoid tax obligations. Offshore non‐compliance and aggressive tax planning by individuals and businesses are costly to government and taxpayers, and reduce the fairness and integrity of the tax system. Tax avoidance and evasion schemes are becoming increasingly more complex. The CRA is committed to enhance its efforts to crack down on tax evasion and combat tax avoidance. |
High | High | The CRA is strengthening its efforts to address aggressive tax planning and offshore non‐compliance involving unreported foreign income and assets with respect to offshore jurisdictions of concern. Initiatives include enhancing current technology to automate the matching of Electronic Funds Transfer data, implementing a new international standard for the automatic exchange of financial information between participating tax jurisdictions, and developing strategic analysis products related to offshore tax non‐ compliance. |
Digital commerce: there is a risk that digital technologies and online business practices will affect the CRA's ability to identify and quantify under‐reported or unreported income using conventional techniques. Digital technologies are continuing to advance rapidly and are becoming more main stream every day. Rapid technological advancement is influencing the growth of Distributed Ledger Technology, and the crypto‐currency market (e.g. Bitcoin). This risk is about ensuring the Agency continues to innovate and evolve its own techniques for identifying income in this rapidly evolving digital landscape. |
High | High | The Agency will expand its work on digital currencies through further research in this area, specifically with the aim to better understand the level of compliance risk posed by crypto‐currencies. It will also attempt to gain a clearer understanding of new business models and the nature of digital transactions. Various types of compliance activities will be necessary to encourage voluntary compliance in the digital payment systems sector. |
Service channels: there is a risk that the CRA's service channels will not evolve to meet the expectations of taxpayers, businesses, and benefit recipients. The CRA places a high priority on providing information and services, meeting diverse taxpayer needs, and treating all Canadians fairly, equally, and respectfully. As such, it is a priority for the CRA to ensure that it is continually improving its service channels to help taxpayers meet their tax obligations and receive the benefits to which they are entitled. This includes the traditional lines of service such as e‐services, call centres, and correspondence. The Minister's mandate letter identifies the evolution of the Agency’s service model to ensure that people who interact with the CRA feel like valued clients, not just taxpayers. |
High | High | There are a number of initiatives in place that are mitigating this risk. They include addressing the Office of the Auditor General's (OAG) concerns regarding our call centres through action plans, modernizing CRA's online presence, and simplifying the language used in the Agency's correspondence. |
| Fiscal year (of the planned date for deputy head approval of the evaluation report) | Title of the evaluationFootnote 5 |
Completion of last evaluation |
Link to CRA's Program InventoryFootnote 6 |
Planned spending associated with the program(s) evaluated (dollars) |
|---|---|---|---|---|
| 2018‐2019 | Evaluation – CRA Administration of T3 Trusts | N/A | Components of:
|
N/A |
| 2018‐2019 | Comprehensive Follow‐up Review – External Administrative Correspondence Evaluation Study | 2014 | Components of:
|
N/A |
| 2019‐2020 | Evaluation – Taxpayer Services and Publications | N/A | Components ofFootnote 7:
|
N/A |
| 2020‐2021 | Comprehensive Follow‐up Review – International Tax Evaluation Study | 2014 | Components of:
|
N/A |
| 2020‐2021 | Evaluation – CRA Reporting to Stakeholders | N/A | Components ofFootnote 7:
|
N/A |
| 2021‐2022 | Evaluation – Horizontal Compliance Management – T1 and T2 | N/A | Components ofFootnote 7:
|
N/A |
| 2021‐2022 | Evaluation – CRA’s use of Legislative Provisions to Support Tax Compliance | N/A | Components ofFootnote 7:
|
N/A |
| 2022‐2023 | Evaluation – Income Tax Rulings | N/A | Components ofFootnote 7:
|
N/A |
| 2022‐2023 | Evaluation – Large Business Audits | N/A | Components ofFootnote 7:
|
N/A |
| Total for CRA | Not applicable | Not applicable | Not applicable | N/A |
| (dollars) | 2017‐18 Forecast | 2018‐19 Planned | 2019‐20 Planned | 2020‐21 Planned |
|---|---|---|---|---|
| Total Main Estimates | 4,162,899,574 | 4,204,725,760 | 4,218,428,531 | 4,177,018,310 |
| Taxpayers' Ombudsman included in Main Estimates above | (3,183,760) | (3,132,365) | (3,141,688) | (3,146,233) |
| Supplementary Estimates | ||||
| Funding for the implementation and administration of various measures to continue efforts to crack down on tax evasion and combat tax avoidance (Budget 2017) | 50,985,647 | |||
| Funding related to Government advertising programs | 1,000,000 | |||
| Funding to implement the taxation regime for cannabis | 7,014,489 | |||
| Funding for operational pressures related to the Government of Canada's pay system – Phoenix | 1,544,316 | |||
| Reimbursement as a result of a reduction in accommodation requirements | 11,700,000 | |||
| Other Adjustments: | ||||
| Adjustment to the respendable non‐tax revenues | 4,006,864 | |||
| Adjustments associated with the implementation and administration of federal legislation to enhance the Canada Pension Plan | 911,632 | |||
| Adjustments associated with the administration costs recoverable by the CRA from the Canada Pension Plan and Employment Insurance Accounts | (652,752) | |||
| Anticipated compensation adjustments | 51,981,812 | |||
| Funding for the reimbursement of salary advances and overpayments incurred by the CRA in 2016‐17 as a result of issues with the government pay system | 8,903,205 | |||
| Planned Base Spending | 4,297,111,027 | 4,201,593,395 | 4,215,286,843 | 4,173,872,077 |
| Taxpayers' Ombudsman | 3,183,760 | 3,132,365 | 3,141,688 | 3,146,233 |
| Items not yet included in outer years' planned spending | ||||
| Carry‐forward from 2016‐2017 | 203,651,392 | ‐ | ‐ | ‐ |
| Maternity and severance payments | 316,500,000 | ‐ | ‐ | ‐ |
| Total Planned SpendingFootnote 8 | 4,820,446,179 | 4,204,725,760 | 4,218,428,531 | 4,177,018,310 |
| Respendable non‐tax revenues pursuant to the Canada Revenue Agency Act | (169,727,126) | (159,856,226) | (153,747,478) | (152,050,870) |
| Cost of services received without charge | 502,510,776 | 449,900,714 | 451,711,382 | 449,025,223 |
| Total CRA Spending | 5,153,229,829 | 4,494,770,248 | 4,516,392,435 | 4,473,992,663 |
| Human Resources (Full‐Time Equivalents) | ||||
| Canada Revenue Agency | 40,509 | 39,904 | 39,962 | 39,189 |
| Taxpayers' Ombudsman | 31 | 31 | 31 | 31 |
| Total Full‐Time Equivalents | 40,540 | 39,935 | 39,993 | 39,220 |
| (dollars) | 2017‐18 Forecast | 2018‐19 Planned | 2019‐20 Planned | 2020‐21 Planned |
|---|---|---|---|---|
| Tax | 3,151,651,179 | 2,793,270,920 | 2,819,226,312 | 2,784,245,038 |
| Benefits | 503,214,849 | 482,609,132 | 474,246,261 | 477,744,586 |
| Internal services | 1,162,061,511 | 925,713,343 | 921,814,270 | 911,882,453 |
| Taxpayers’ Ombudsman | 3,518,640 | 3,132,365 | 3,141,688 | 3,146,233 |
| Total Planned SpendingFootnote 8 | 4,820,446,179 | 4,204,725,760 | 4,218,428,531 | 4,177,018,310 |
| Respendable non‐tax revenue pursuant to the Canada Revenue Agency Act | (169,727,126) | (159,856,226) | (153,747,478) | (152,050,870) |
| Cost of services received without charge | 502,510,776 | 449,900,714 | 451,711,382 | 449,025,223 |
| Total CRA Spending | 5,153,229,829 | 4,494,770,248 | 4,516,392,435 | 4,473,992,663 |
| Human Resources (Full‐Time Equivalents) | 40,540 | 39,935 | 39,993 | 39,220 |
Raison d’être, mandate and role
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 issues billions of dollars in benefit and credit payments annually.
The CRA’s mandate is to make sure Canadians:
- pay their required share of taxes
- receive their rightful share of benefits
- get an impartial review of the decisions they contest
Mandate and role
In fulfilling its core responsibilities, the CRA administers the Income Tax Act, the Excise Tax Act, and the Excise Act; collects taxes on behalf of provinces and territories; and collects non-tax debts for the federal government and administers legislation relating to the Canada Pension Plan and the employment insurance program.
Service standards
Service standards support the CRA's commitment to Canadians for transparency, management accountability, and citizen-focused service. The full list of service standards is available on the CRA website: www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/service-standards-cra.html.
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