Updates on CRA service improvements

The Canada Revenue Agency (CRA) works collaboratively with the Office of the Taxpayers’ Ombudsman to address service-related issues raised by the Taxpayers' Ombudsman in published reports.

On this page

  • Rights and Rulings: An examination into the sufficiency of information in ruling letters from the CPP/EI Rulings Division of the Canada Revenue Agency.
  • Without Delay: An examination into service issues arising from delays in the Canada Revenue Agency's Taxpayer Relief Program.
  • Benefits Unsheltered: An examination into the Canada Revenue Agency's communication and outreach efforts to shelters and other support organizations about benefits and credits administered by the Canada Revenue Agency.
  • Fair Warning: An examination into service issues related to legal warnings issued by the Canada Revenue Agency during debt collection procedures.
  • Sub-standard: Delays and lack of transparency in the Canada Revenue Agency's processing of individual income tax and benefit returns and adjustment requests.

2019 update NEW

Rights and Rulings: An examination into the sufficiency of information in ruling letters from the CPP/EI Rulings Division of the Canada Revenue Agency

Original report submitted to the Minister of National Revenue March 2017

Recommendation #1

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency provide information in the Canada Pension Plan (CPP and Employment Insurance (EI) rulings letters that workers and payers have the right to request a copy of the CPP/EI Rulings Report, and provide instruction on how to request it.

CRA's response

The CRA agrees in principle with the recommendation and will conduct a pilot prior to making a final decision regarding full implementation.

2018 update

The implementation of this recommendation is still in progress and will be fully implemented by the end of September 2018.

The CRA revised its ruling letter to include a verse to inform workers and payers involved in a CPP/EI ruling of their right to request a copy of the CPP/EI ruling report and to include instructions on how to request it. The revised ruling letter was initially piloted in one region from July to September 2017.

The results from this pilot were inconclusive as they did not provide sufficient information on the potential impact to the program. As a result, a decision was made to conduct a second pilot in another region from October to December 2017, which found that the inclusion of the revised verse generated an increase in the number of ruling report requests.

Based on the findings of the second pilot, the CRA decided to include the revised verse in all of its decision letters, which will be implemented by September 2018.

The CRA’s implementation plan includes updated training for all rulings officers to ensure they understand their roles and responsibilities related to the provision of ruling reports.

2019 update

The CRA has fully implemented this recommendation as of the end of  September 2018.

Since September 26, 2018, the CRA's ruling letters include a verse to inform workers and payers receiving a CPP/EI ruling decision of their right to request a copy of their ruling report and provide instructions on how to request it.

Program procedures related to post rulings activities have been updated and training was provided to CPP/EI Rulings staff to ensure they understood their roles and responsibilities related to the provision of ruling reports.

2019 update NEW

Recommendation #2

The Taxpayers' Ombudsman recommends that, where applicable, the Canada Pension Plan and Employment Insurance rulings letters inform the workers and payers that an amount or over-contribution may result from the decision.

CRA's response

The CRA accepts this recommendation.

2018 update

The CRA has fully implemented this recommendation.

The Have you received a CPP/EI ruling webpage was updated on June 23, 2017, to provide information on this topic.

The CRA amended all of its ruling letters as of June 30, 2017, to indicate that if the worker or the payer has questions on the consequences of the ruling, they can:

The ruling letters provide the CRA’s toll-free numbers for individual tax inquiries, businesses, and self-employed individuals.

Recommendation #3

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency updates the relevant sections of its publications and webpages to clearly communicate with the workers and payers involved in a Canada Pension Plan (CPP) and Employment Insurance (EI) ruling about what they need to do after a ruling is made, including the steps required by workers and payers to pay any outstanding CPP contributions and/or EI premiums.

CRA's response

The CRA accepts this recommendation.

2018 update

2018 update

The CRA has fully implemented this recommendation.

The CRA’s webpage Have you received a CPP/EI ruling was updated June 23, 2017. The content is now directed specifically to payers, employers, employees, and self-employed individuals.

The page provides information on what the taxpayer needs to know if a worker’s employment status changes, and includes:

  • links to information on how to pay outstanding CPP contributions or EI premiums;
  • a link to information on how to appeal a ruling; and
  • a new paragraph directing individuals who have received a CPP/EI ruling to the CRA’s Have you received a CPP/EI ruling webpage.

The RC4110 Employee or Self-employed? guide was updated to include a new paragraph that refers workers and payers involved in a ruling to the CRA webpage Have you received a CPP/EI ruling. This webpage provides information on what to do after a ruling is issued.

Recommendation #4

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency continue to include in their Canada Pension Plan (CPP) and Employment Insurance (EI) rulings letters:

  1. the name and telephone number of the rulings officer and an invittion to contact the rulings officer to receive an explanation of the rationale behind the decision; and

  2. reference to the "Have you received a CPP/EI ruling?" website.

CRA's response

The CRA accepts this recommendation.

2018 update

The CRA has fully implemented this recommendation.

The CRA’s ruling letters continue to include the contact information for the ruling officer assigned to the individual’s file. The ruling officer will be able to answer questions related to the file as well as to the decision rendered.

The CRA’s ruling letters were amended to indicate that if the worker or the payer has questions, they can visit the Have you received a CPP/EI ruling webpage which was updated June 23, 2017.

Recommendation #5

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency determine whether changes can be made to increase efficiencies to allow for the inclusion of an explanation of the relevant factors within each rulings letter.

CRA's response

The CRA accepts this recommendation.

2018 update

The CRA fully implemented this recommendation by the end of June 2018.

The CRA’s ruling letters were amended as of June 30, 2017, to include the following changes:

In addition, a review of all the CRA’s ruling letters was completed to include links to existing CPP/EI explained articles, when relevant.

Without Delay: An examination into service issues arising from delays in the Canada Revenue Agency’s Taxpayer Relief Program

Original report submitted to the Minister of National Revenue September 2017

Recommendation #1

The Taxpayers' Ombudsman recommends that for each taxpayer who has filed a request for relief, the Canada Revenue Agency:

  1. Advise the taxpayer whether their request is routine or comple; and,
  2. Provide the taxpayer a clear and accurate estimates processing time.

CRA's response

The CRA accepts this recommendation in principle, pending an analysis of its feasibility.

2018 update

Between October and December 2017, the CRA conducted an analysis on the feasibility of this recommendation.

As a result of that analysis, the CRA expects to be able to implement this recommendation by April 1, 2019. The Agency will need to take the following steps for this to happen:

  • gather data to determine the approximate processing time as well as the amount of time taxpayer relief officers spend on complex requests;
  • review and where necessary, revise procedures on determining the complexity of requests; and
  • review and where necessary, revise correspondence templates to:
    • advise taxpayers if their request is routine or complex;
    • provide taxpayers with an accurate estimate of the processing time for their request based on the level of its complexity; and
    • advise taxpayers when, upon further review, the level of complexity of their request has changed.

The CRA began tracking its processing times for complex requests in January 2018. An analysis of the data collected will be completed in Fall 2018, and the results will be used to provide more accurate processing times to taxpayers.

After the completion of this analysis, the CRA will also be reviewing and revising, as needed, its procedures and correspondence templates. This stage is expected to be completed by the end of March 2019.

2019 update

The CRA reviewed its procedures on determining the complexity of taxpayer relief requests and found that its agents are able to correctly identify the level of complexity using existing procedures. Therefore, it was concluded that no changes were required.

On April 1, 2019, the CRA revised its correspondence templates to:

  • advise taxpayers if their request is routine or complex;
  • provide taxpayers with an accurate estimate of the processing time for their request based on the level of its complexity; and
  • advise taxpayers when, upon further review, the level of complexity of their request has changed.

The CRA considers this recommendation to be fully implemented.

2019 update NEW

Recommendation #2  

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency maintain nation-wide consistency in the processing times of taxpayer relief requests.

CRA's response

The CRA accepts this recommendation. The CRA already commenced steps in 2014 for maintaining nation-wide consistency in processing times for relief requests related to the cancellation of penalties and interest.

2018 update

The CRA has implemented significant enhancements to its existing Appeals workload management system and is working to update its current technologies which will contribute to further improving consistency in processing times for taxpayer relief requests across Canada.

Although a national process related to the movement of files was implemented in 2014, the CRA is working to improve technologies so that it can move away from that manual process of inventory management towards a more automated process.

In addition to the enhancements to its management system, the CRA has made the following changes that have resulted in improvements to the processing of taxpayer relief requests:

  • changes to processes and procedures to address high inventory levels;
  • development of program monitoring and quality assurance processes, to identify issues and discrepancies, promote consistency, and identify gaps and improvements;
  • introduction on April 1, 2016, of an external service standard (acknowledgement of receipt of request within 30 calendar days) with a commitment to meet this standard 85% of the time;
  • introduction on April 1, 2017, of a new service standard (processing requests and issuing a decision within 180 calendar days) with a commitment to meet this standard 85% of the time;
  • sharing of a national process map for intake centre screeners across all regions that is expected to enhance consistency among all intake centres.

These improvements have allowed the CRA to reduce the processing time for taxpayer relief requests from an average of 15 months in October 2013, to 12 months in January 2015. With the change to the current manual process for inventory management, the CRA was able to further reduce the processing time to 6 months in October 2015. In the past year, the CRA processed taxpayer relief requests to cancel or waive penalties and interest within 180 days of receipt, 86.8% of the time.

The CRA has completed a comprehensive review of its business processes for the Taxpayer Relief Program intake centres and continues to work at improving efficiency and consistency across all regions.

A review of the business process for the Centres of Expertise is currently in the planning phase and is expected to further improve consistency as well as reduce processing times. The expected completion date for this review is March 2020.

An e-services project is currently underway to improve Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, which will allow taxpayers to submit structured relief requests through the CRA’s online portals. The expected completion date for this project is May 2020.

2019 update

In April 2019, the CRA implemented a standardized approach for documenting taxpayer relief decisions.  It is expected that this will result in more consistent processing of taxpayer relief requests.

In September 2019, the CRA will launch a pilot project for the creation of a national inventory, which will increase efficiencies in workload management, reduce regional inventory variations, and ensure a fair and consistent approach to the delivery of service to taxpayers.

The CRA has increased its focus on continuous improvement and service, and is taking the opportunity to review, clarify, and challenge the purpose of its processes. In January 2019, the CRA held the first national process review event on the processing of taxpayer relief requests.  Opportunities for improvement were identified and will be implemented, thereby contributing to maintaining nation-wide consistency.

The CRA intends to launch a pilot in one region to test the identified improvements before the end of December 2019. This will allow the CRA to make any necessary modifications prior to national implementation in April 2020.

The CRA will continue to foster a culture of continuous improvement and identify opportunities for enhancements. These ongoing improvements, which include a focus on the needs of taxpayers, are constantly being implemented and will not only maintain, but improve nation-wide consistency in processing times of taxpayer relief requests.  As such, the review of the business process for the Centres of Expertise is truly an evergreen process that will continue to evolve moving forward.

The electronic Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, will be completed and available to taxpayers through the CRA online portals in October 2019.

2019 update NEW

Recommendation #3

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency review and identify the factors that contribute to fluctuations in the number of taxpayer relief requests, as well as the impact they may have on the Taxpayer Relief Program.

CRA's response

The CRA accepts this recommendation. The CRA has already identified the factors that contribute to fluctuations in the number of taxpayer relief requests and is aware of the impact they have on the program.

2018 update

The CRA routinely monitors both internal and external factors that may have an impact on the volumes of taxpayer relief requests it receives.

Specifically, the CRA tracks and monitors the number of taxpayer relief requests related to natural disasters, such as the British Columbia wildfires (2017), the Ontario and Quebec floods (2017), and the Atlantic and Pacific floods (2018).

The CRA also monitors initiatives implemented by its various program areas to determine if they have the potential to impact the Taxpayer Relief Program.

By closely monitoring these activities (internal and external), the CRA is able to react and respond appropriately to changes in the number of requests for taxpayer relief.

Recommendation #4

The Taxpayers' Ombudsman recommends that the Canada Revenue Agency allocate sufficient permanent funding to the Taxpayer Relief Program to allow for adequate planning, to ensure the Program consistently meets or improves upon its processing times for taxpayer relief requests.

CRA's response

The CRA recognizes the importance of the Taxpayer Relief Program. As the CRA must respond to many pressures regarding its services and programs, there is a thorough process to allocate funding to programs across a wide range of activities, and new funding may be requested via the Federal Budget. The program is currently exceeding its publicly stated service standard.

2018 update

The CRA began tracking and monitoring time spent on complex taxpayer relief requests in April 2018. With this data, the CRA is now able to evaluate the time spent on both routine and complex requests and adjust the average time per taxpayer relief request accordingly.

In addition, the CRA conducts numerous costing exercises related to initiatives implemented by its various program areas where it has been determined that the initiative has the potential to impact the Taxpayer Relief Program.

The CRA will use this information to determine and allocate funding, as needed, to consistently meet or improve on the processing times for taxpayer relief requests.

Benefits Unsheltered: An examination into the Canada Revenue Agency's communication and outreach efforts to shelters and other support organizations about benefits and credits administered by the Canada Revenue Agency

Original report submitted to the Minister of National Revenue December 2017

Recommendation #1  

The Taxpayers' Ombudsman recommends the Canada Revenue Agency continue to find new ways to effectively inform, educate, and collaborate with organizations, to provide information on benefits and credits to persons using shelters.

CRA's response

The CRA concurs with this recommendation.

2018 update

The CRA partners with shelters through the Community Volunteer Income Tax Program (CVITP) and the Outreach Program, to ensure that homeless and housing-insecure individuals get the benefits and credits they are entitled to receive. The CRA continues to recruit shelters to participate in these programs.

The CRA shared its regional expectations for the CVITP and the Outreach Program with its regional staff, across Canada, in January 2018. The following were communicated as being Agency priorities moving forward:

  • building on existing outreach to women’s shelters; and
  • increasing the awareness of benefits and credits and of the CVITP among homeless and women’s shelters.

The CRA is able to report on the following achievements between April 1, 2017, and March 31, 2018:

  • conducted 63 outreach activities to women’s shelters, connecting with more than two thousand individuals across Canada who use shelter services;
  • created a factsheet specifically tailored for women in shelters;
    •  
    • Note: Some information highlighted in the factsheet includes:
    • how to apply for the Canada child benefit (CCB);
    • the importance of filing tax returns every year, regardless of income, so as not to interrupt CCB payments;
    • how the CRA helps those in abusive situations to access benefit and credit payments without the involvement of their abusive partner; and
    • how to update personal information with the CRA.
  • shared benefit and credit information with more than 500 individuals at Halifax Connects and at Homeless Connect in Toronto and Vancouver (September 2017 to February 2018); and
  • provided general tax-filing and benefit information to over 250 individuals through a collaborative effort by the CVITP and Outreach Program at the Under One Umbrella event in Sydney, NS (November 2017).

    Note: Several booth visitors were not only able to have their tax slips printed by outreach officers, but were also able have their tax returns prepared and filed by CVITP volunteers.

The CRA is in the process of developing a 3-year strategy to reach and help vulnerable Canadians, which it expects to finalize by the fall of 2018. This strategy was developed using Gender Based Analysis Plus (GBA+).

Note: GBA+ is the process by which a policy, program, initiative, or service can be examined for its impacts on various groups of women and men.

The 3-year strategy includes items on the following topics:

  • housing-insecure individuals (such as shelter users) as a vulnerable group; and
  • increasing targeted outreach to shelters.

As a result of funding announced in the 2018 Federal Budget to expand the scope of the CVITP and the Outreach Program, the CRA will increase its visibility by approaching more organizations to create partnerships which will contribute to reaching more homeless and housing-insecure Canadians nationally.

To that end, efforts are underway to develop a partnership with Women’s Shelters Canada, Employment and Social Development Canada and Indigenous and Northern Affairs Canada, with the aim of allowing the CRA to more directly, yet discretely, communicate and offer services to most shelters in Canada.

2019 update

The CRA is continuing to reach out to and partner with shelters through the Community Volunteer Income Tax Program (CVITP) and the Outreach Program, to ensure that homeless and housing-insecure individuals get the benefits and credits they are entitled to receive. The CRA continues to recruit shelter organizations to participate in these programs.

The CRA's Strategy for Reaching and Supporting Vulnerable Canadians 2018-19 to 2020-21 includes housing insecure individuals (such as shelter users and homeless individuals) as one of its target demographics. The strategy aims to increase the take-up of government benefits and credits by vulnerable individuals through enhancing awareness of benefits and credits and increasing access to free tax preparation services provided by the CVITP among each of its target demographics. A Gender Based Analysis Plus (GBA+) was completed during the development of the strategy.

The CRA is preparing its regional expectations for 2019-2020, which will include outreach to shelters as a key area of focus.

The CRA is able to report that between April 1, 2018, and March 31, 2019, it conducted 139 outreach activities to shelters and organizations that serve them, connecting with more than 3,100 individuals across Canada who use and support shelter services. Of these activities, 78 were with women's shelters and organizations that serve them, and these activities reached over 1,500 participants.

The CRA now offers additional products tailored to women in shelters. In addition to the factsheet developed in 2017-2018, the CRA developed an information poster designed for women's shelters.

A PowerPoint presentation covering key topics of interest for shelter users was also developed to facilitate outreach to this demographic. It includes information on the Canada child benefit and the child disability benefit, the Disability Tax Credit, the GST/HST credit, and the Working Income Tax Benefit (renamed the Canada Workers Benefit beginning with the 2019 tax year) as well as the CVITP.

The CRA established an outreach partnership with Women's Shelters Canada to promote benefit and credit awareness and the free tax filing services provided by the CVITP among its membership. Women's Shelters Canada is a network of 14 provincial and territorial shelter networks representing over 400 shelters across Canada. It works as a unified voice to collaborate, educate, and innovate for systemic change that ends violence against women. Through the partnership, the CRA was able to include an article titled "Getting Benefits when They're Needed the Most" in Women's Shelters Canada's Fall 2018 quarterly newsletter.

The CRA is also working with the developer of Women In Safe Housing (WISH) software, which is used by shelters across the country for client intake and reporting purposes. Through this partnership, the software was updated to include links on benefits and credits and free tax help. This helps shelter staff provide this information more consistently to their clients as details are readily available on their screens. The next WISH software update will include a link to the CRA's Child and Family Benefits Calculator, to expand the information readily available to shelter staff and users.

The CRA participates in numerous outreach activities across the country to provide services to  homeless and housing-insecure individuals, and the organizations that serve them such as, the Homeless Connex events. It also participated in the Shelters of the Future conference in June 2018, hosted by Women's Shelters Canada. The conference was attended by over 600 individuals, and allowed CRA officers to connect with shelter organizations from across the country and other related provincial/territorial organizations.

2019 update NEW

Recommendation #2

The Taxpayers' Ombudsman recommends the Canada Revenue Agency actively promote and increase awareness of outreach services and information available to organizations with respect to benefits and credits available to persons using shelters.

CRA's response

The CRA concurs with the recommendation.

2018 update

The actions taken for recommendation #1 also address recommendation #2.

2019 update

The actions taken for recommendation #1 also address recommendation #2.

2019 update NEW

Recommendation #3

The Taxpayers' Ombudsman recommends the CRA ensure consistency across all provinces and territories in:

  1. the promotion of outreach services available; and
  2. the delivery of information to organizations with respect to benefits and credits available to persons using shelters.

CRA's response

The CRA concurs with the recommendation.

2018 update

The actions taken for recommendation #1 also address recommendation #3.

2019 update

The actions taken for recommendation #1 also address recommendation #3.

2019 update NEW

Fair Warning: An examination into service issues related to legal warnings issued by the Canada Revenue Agency during debt collection procedures

Original report submitted to the Minister of National Revenue December 2018

Recommendation #1

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency change the validity period of the legal warning back to 180 days, from 365 days.

CRA's response

The CRA agrees to conduct a study to determine the best course of action to address this recommendation.

The CRA is not sure that a change in the validity period from 365 to 180 days would have an impact on whether a taxpayer remembers the consequences of non-payment. As a result, the CRA commits to first examining the implications of this recommendation. This will assist in the decision-making process of whether to change the validity period from the current policy of 365 days to 180 days or another reasonable timeframe.

This first step in addressing this recommendation will be completed by the end of December 2019.

Recommendation #2

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency (CRA) update its legal warning policies to ensure the following information is provided to taxpayers when a legal warning is given:

  1. An explanation of the meaning of the legal warning;
  2. The validity period of the legal warning;
  3. The consequences of non-payment; and
  4. What legal actions can be taken by the CRA.

CRA's response

The CRA agrees with the recommendation. Although the report highlights the fact that legal warning is currently embedded in the CRA’s operations, the CRA recognizes there are opportunities to refine its policies and explanatory material for even greater clarity.

A fulsome review of the collections content on Canada.ca is already underway as a result of usability testing conducted with taxpayers in the Spring of 2018. This review will result in an updated architecture for the CRA’s website as well as a comprehensive review of content, making it easier for taxpayers to find information that is clear and consistent.

In addition, the CRA commits to the following actions:

  • providing an explanation of the meaning of “legal warning” and ensure that it appears on its website;
  •  ensuring that the validity period is provided to taxpayers who are dealing with employees responsible for the collection of debts;
    Note:  Although there is no legislative requirement for the CRA to have a validity period, it put one in place to ensure that there was consistency among the employees responsible for the collection of debts when dealing with taxpayers.
  • reviewing its external publications related to Collections (web content on Canada.ca, information to taxpayers, etc.) in collaboration with communication advisors who will help to develop messaging and products that are clear, easily interpreted as well as consistent in the terminology used throughout the various channels.

Although information on the consequences of non-payment and the legal actions that can be taken by the CRA is currently available on its external website, this information will also be looked at as part of this global initiative.

Given the scope of this commitment and the consultations required, this initiative is expected to be completed by December 2019.

Recommendation #3

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency (CRA) update the information available to taxpayers, to include:

  1. An explanation of the collection process, including all levels of collection;
  2. An explanation of the legal warning policy;
  3. The validity period of the legal warning;
  4. An explanation of when the legal warning is not required;
  5. Exceptions about the renewal of the legal warning;
  6. The consequences of non-payment;
  7. When and what legal actions can be taken by the CRA; and
  8. Definitions of terminology.

CRA's response

The CRA agrees with the recommendation.  Although the report highlights the fact that legal warning is currently embedded in the CRA’s operations, the CRA recognizes there are opportunities to refine its policies and explanatory material for even greater clarity.

The CRA feels that the documentation currently available to the public in Information Circular IC98-1R7, Tax Collections Policies, sufficiently describes its collection process.

As indicated in the CRA’s response to Recommendation #2, the CRA is committed to completing a global review of its external products that relate to Collections. In addition to those areas already mentioned, the CRA will:

  • replicate sufficient information in its collections content on Canada.ca in plain language including a description of the areas of the collection program that may contact a taxpayer;
  • publish the validity period of legal warning once it is determined through the process identified in the CRA’s response to recommendation #1;
  • review the information available to the public on the topic of debts in jeopardy and make the necessary changes to ensure that it is clear and easily understood;
    Note:  When a taxpayer’s account is within the Collections program and they have been contacted by a CRA Collections employee, there is only one situation where legal warning is not required and that is when the CRA goes to the court for a jeopardy order. Information on debts in jeopardy is currently available on the CRA’s external website.
  • continue the work started on updating its internal manuals in the Collections program.

Given the scope of this commitment and the consultations required, this initiative is expected to be completed by December 2019.

Recommendation #4

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency (CRA) update its internal and external messaging to ensure all debt payment and collections related terminology is clearly and consistently defined and used; and information communicated and available to taxpayers is clear, in plain language, complete, and consistent. External messaging includes, but is not limited to, information relayed using: the CRA website, correspondence sent to taxpayers, and procedures/scripts used to inform and direct taxpayers (for example, the Debt Management Call Centre Manual, the National Collections Manual, and the Individual Services Technical Help Guide (ISTHG), etc.).

CRA's response

The CRA agrees with the recommendation and is taking action to refine these information products.

The CRA has already began the process of updating its internal manuals in the Collections program by taking the following actions:

  • updating the legal warning scripts in the Debt Management Call Centre (DMCC) manuals by removing the phrase “legal measures” for consistency;
  • changing its Tax Services Office (TSO) and National Verification and Collections Centre (NVCC) letters in January 2018 to include the following:
    If you fail to pay your account or respond to this letter within 14 days, we may take legal action against you. For example, we may garnish your income, garnish your bank account, seize and sell your assets, or use any other means under the laws that apply to collect the amount you owe.

As indicated in the CRA’s response to Recommendation #2, the CRA is also committed to completing a global review of its external products that relate to Collections. Given the scope of these combined commitments and the consultations required, this initiative is expected to be completed by December 2019.

Recommendation #5

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency (CRA) ensure sufficient training is provided and knowledge is transferred to:

  1. All CRA employees who may be involved in the collection process so they are able to accurately speak with a taxpayer about the taxpayer’s debt and their particular circumstances;
  2. All CRA employees who provide legal warnings, so they are able to provide an explanation of the legal warning, the validity period of the legal warning, the consequences of non-payment of debts with the CRA, including legal actions that can be taken by the CRA; and
  3. All CRA employees who may be contacted by taxpayers about collection matters (including agents at the individual tax enquiries line) so they are able to provide information to taxpayers about the consequences of non-payment of debts with the CRA, including legal actions that can be taken by the CRA.

CRA's response

The Agency agrees with the recommendation.

Although the CRA believes that the training currently provided to the agents involved in the collection process as well as those who provide legal warnings to taxpayers is sufficiently robust, it does commit to reviewing its training products to identify if opportunities exist to bolster these messages. The goal being to ensure that the employees who are directly involved in the collection process understand the responsibilities as well as consequences of non-compliance at each level of the DMCC, the NVCC, and the TSO.

The CRA feels that the training currently provided to non-collection agents such as agents on the individual income tax enquiries (IITE) line and auditors, is sufficient. Non-collection agents do not provide legal warning and should not provide any of this information. While non-collection agents can suggest to taxpayers that they can make arrangements to pay their debt, they should refer taxpayers to the CRA website or to the Information Circular for more information on legal warning and the consequences of non-payment.

Based on a discussion between the CRA and the Office of the Taxpayers’ Ombudsman (OTO), the CRA is of the understanding that the intention of #3 under Recommendation #5 was to ensure that CRA employees outside of the collection process, who may be contacted by taxpayers about collection matters, have sufficient training to direct taxpayers to the Collections program, its available resources, or to answer general questions. It is further the understanding of the CRA that this recommendation refers only to general information about consequences of non-payment and not to consequences related to specific individual accounts

The CRA has already taken steps to reinforce with non-collection agents such as auditors that they are to direct taxpayers to the Collections Division and/or to the Collections content on Canada.ca. Audit procedures were updated accordingly in September 2017.

The CRA will review messaging to other non-collection agents, such as IITE agents, to ensure that they provide sufficient information to taxpayers and direct those requiring more information to the Collections program.

Given the scope of this commitment and the consultations with other program areas within the CRA that will be necessary, this initiative is expected to be completed by December 2019.

Recommendation #6

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency (CRA) conduct a fulsome review of processes, policies and information regarding payment arrangements, to ensure clear, fulsome, and consistent information and wording in external messaging to taxpayers, manuals, training products, policies, and procedures for CRA employees involved in the collection process and who may be contacted by taxpayers about collection matters.

CRA's response

The CRA agrees with the recommendation.

The CRA has already initiated a review of its policies, procedures, manuals, and training products with respect to payment arrangements. As indicated in the CRA’s response to Recommendation #2, the CRA is also committed to completing a global review of its external products related to Collections.

Given the scope of these combined commitments and the consultations required, this initiative is expected to be completed by the end of March 2020.

Recommendation #7

In the course of reviewing its processes, policies and information regarding payment arrangements, the Taxpayers’ Ombudsman recommends the Canada Revenue Agency (CRA) consider:

  1. Making information available to taxpayers on the parameters and other requirements for a binding payment arrangement;
  2. The need for clarity and consistency in its terminology and definitions;
  3. The need for clarity and consistency in its processes; and
  4. Making information available to taxpayers to explain the differences in the types of arrangements for payment, which are not binding payment arrangements, the consequences for non-payment in each situation, and which CRA agents can make binding payment arrangements.

CRA's response

The CRA agrees with the recommendation.

As indicated in the CRA’s response to Recommendations #2 and #4, the CRA is committed to completing a global review of its external products related to Collections and has already begun the process of updating its internal manuals in the Collections program.

The CRA encourages the voluntary compliance of taxpayers who pay off their debts. This includes taxpayers who voluntarily set up payment arrangements without involving a CRA agent involved in the collection process. The review of information related to payment arrangements, regardless of whether it is voluntary or with a CRA agent involved in the collection process will be part of the global review as described in the CRA’s response to Recommendation #2.

The CRA requests that any outstanding debt be paid in full by taxpayers. Should the taxpayer be unable to pay the debt in full, payment arrangements may be considered. General parameters related to payment arrangements can be made available to taxpayers; however, a collector has some discretion as each collection case is judged on its own merit.

Given the scope of these combined commitments and the consultations required, this initiative is expected to be completed by December 2019.

Recommendation #8  

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency send the payment arrangement confirmation letter to all taxpayers who make a payment arrangement, unless the taxpayer requests not to receive the letter.

CRA's response

The CRA agrees that this recommendation has merit, and will conduct a review to better evaluate the most appropriate and beneficial approach.

As noted in the report, the CRA currently provides a payment arrangement confirmation letter to taxpayers upon request. It is the understanding of the CRA that not all taxpayers or their representatives want a confirmation letter. Therefore, before determining whether a letter should be sent to all taxpayers or representatives who make a payment arrangement, the CRA will undertake to further review this option to better understand taxpayers’ preference and will conduct a cost/benefit analysis of this proposal. The review will be completed by December 2019.

In the meantime, the CRA will update its current procedures to allow for an active offer of service. This means that the CRA will give taxpayers the option of whether they would like a payment arrangement confirmation letter or not at the time that the arrangement is made. This change will be implemented by the end of March 2019.

2019 update

The CRA implemented the active offer of service on February 8, 2019.

In the almost 6 months since its implementation, the Debt Management Call Centres have reported a 300% increase in the number of payment arrangement confirmation letters issued. This translates to an increase of approximately 4,050 letters per month compared to the previous 6 months.

The Taxpayers' Ombudsman has confirmed the following:

"The active offer of service to provide the confirmation letter at the time a payment arrangement is made is sufficient to satisfy recommendation 8; therefore, no further review or a cost benefit analysis would be necessary."

2019 update NEW

Recommendation #9

The Taxpayers’ Ombudsman recommends the Canada Revenue Agency regularly review its payment and collection policies and procedures to ensure they align with a service approach consistent with the Taxpayer Bill of Rights.

CRA's response

The CRA agrees with the recommendation.

The CRA, on an ongoing basis, reviews its collection policies to ensure they align with the Taxpayer Bill of Rights.

Sub-standard: Delays and lack of transparency in the Canada Revenue Agency's processing of individual income tax and benefit returns and adjustment requests.

Original report submitted to the Minister of National Revenue December 2019

Recommendation #1

The Taxpayers' Ombudsman recommends the Canada Revenue Agency publish service standards for processing late-file T1 income tax and benefit returns, and all T1 adjustment requests excluded from the current service standards, so it can accurately measure and report on whether it is meeting its requirement to process income tax and benefit returns and adjustment requests in a timely manner, per section 152(1) of the Income Tax Act and articles 5, 6 and 13 of Taxpayer Bill of Rights.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of service standards and the CRA has provided an overarching response on this theme.

The CRA is committed to processing tax returns with all due dispatch. Its service standards publicly state the level of performance that citizens can reasonably expect to encounter from the CRA under normal circumstances. These results are published annually. It should be noted that late filed returns are not considered to fall within normal circumstances and is usually representative of tax filers who have not met their obligations under the ITA. As a result, the CRA does not agree with the recommendation.

The CRA will however assess the feasibility of establishing a service standard for complex adjustment requests by December 2020.

Recommendation #2

The Taxpayers' Ombudsman recommends the Canada Revenue Agency improve its service standards by:

a. increasing the percentage of time it is expected to meet the service standard for digitally-filed T1 income tax and benefit returns.

b. decreasing the length of time it takes to process paper-filed T1 income tax and benefit returns.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of timeliness of processing and the CRA has provided an overarching response on this theme.

The CRA continually pursues technological enhancements so as to reduce processing times for both digitally-filed and paper-filed T1 income tax and benefit returns.

For example, further renewal of the processing system for individual returns will be completed in 2020.  Utilizing this new foundation, the volume of returns that necessitate human intervention will be decreased and processing times for those returns that require manual (re)assessments will be reduced.

The CRA agrees to review and update service standards accordingly as technological enhancements allow faster processing.

Recommendation #3

The Taxpayers' Ombudsman recommends the Canada Revenue Agency improve the clarity, transparency, and consistency of the language it uses to describe the types of T1 income tax and benefit returns and adjustment requests included and excluded from the application of the various service standards, and the calculation of the CRA's performance against those standards, ensuring to address issues raised in this report about confusion on certain types of workflows.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of service standards. Please see the CRA's overarching response on this theme.

The CRA conducts a review of its service standards annually, including the standards related to the processing of T1 returns. The CRA is committed to continuing to undertake these annual reviews to ensure clarity, transparency, and consistency of the language used in the description of standards.

The CRA further indicates that as part of this process, it will review the assessing and reassessment service standards to ensure the language is consistent. This review will be completed by December 2020.

Recommendation #4

The Taxpayers' Ombudsman recommends the Canada Revenue Agency clearly indicate in its published information on service standards for T1 adjustment requests, the standard timeframes for those requests made verbally.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of service standards. Please see the CRA's overarching response on this theme.

The CRA indicates that the service standard for verbal adjustment requests is included in the overall service standard for T1 adjustment requests received via paper. It is important to note that there are fewer than 40,000 verbal adjustments per year with an expectation that this number will decrease further as a result of self-service options available to Canadians. The CRA will not establish a separate service standard for verbal adjustments requests

As part of its annual review, the CRA commits to reviewing the wording of the T1 Adjustments service standard to ensure that requests received via telephone are clearly outlined. This is expected to be completed by December 2020.

Recommendation #5

The Taxpayers' Ombudsman recommends the Canada Revenue Agency publish approximate processing timeframes for T1 income tax and benefit returns and adjustment requests, by type of processing workflow.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of exception processing and the CRA has provided an overarching response on this theme.

The CRA agrees to make available more information on processing timeframes, by type of processing workflow.

A tool (Check CRA Processing Times) was made available on the CRA's Canada.ca website beginning in December 2019. The next phase will be a progress tracker for account specific enquiries that will be in the CRA secure portals starting in May 2021. This tool will inform taxpayers or their representative when a file was received and its status in the processing cycle.

Recommendation #6

The Taxpayers' Ombudsman recommends when reporting its performance against the service standards, that the Canada Revenue Agency report separately on:

a. digitally-filed T1 income tax and benefit returns,

b. paper-filed T1 income tax and benefit returns,

c. digitally-filed T1 adjustment requests,

d. paper-filed T1 adjustment requests, and

e. verbal T1 adjustment requests.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of service standards. Please see the CRA's overarching response on this theme.

The CRA currently reports on its digitally-filed and paper-filed T1 returns and digitally-file and paper-filed adjustment requests separately against each service standard. The service standard for verbal adjustment requests is already included in the overall service standard for T1 adjustment requests received via paper. As a result, the CRA does not agree with the recommendation to establish a separate service standard for verbal adjustments requests.

As part of its annual review, the CRA commits to reviewing the wording of the T1 Adjustments service standard to ensure that requests received via telephone are clearly outlined. This is expected to be completed by December 2020.

Recommendation #7

The Taxpayers' Ombudsman recommends the Canada Revenue Agency (CRA) change the wording used in publicly describing, and reporting its performance against, service standards for processing T1 income tax and benefit returns, from "fiscal year" to "filing season"; and if unable to do so, ensure information is clearly publicly provided about the specific period of time on which the CRA is reporting.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of service standards. Please see the CRA's overarching response on this theme.

The CRA has taken steps to ensure that the specific period of time associated with the reported results for the T1 assessing service standards is clearly described beginning with the 2018-19 performance results.

Recommendation #8

The Taxpayers' Ombudsman recommends the Canada Revenue Agency notify filers, by letter when their T1 income tax and benefit return (return) is referred to any specialized processing workflow where processing times may exceed the published service standard, and where the filer has not signed up for online mail. The letter should include a timeframe within which the filer can reasonably expect their return to be completed, or the revised service standard should the CRA have created one. Where a filer has signed up for online mail, pending full implementation of phase two of the progress tracker, that the CRA advise the filer through online mail when their return is referred to any specialized processing workflow where processing times may exceed the published service standard.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of exception processing. Please see the CRA's overarching response on this theme.

The CRA agrees that taxpayers should be informed with respect to the status of their files.

A tool (Check CRA Processing Times) was made available on the CRA's Canada.ca website beginning in December 2019. The next phase will be a progress tracker for account specific enquiries that will be in the CRA secure portals starting in May 2021. This phase of the solution will enable taxpayers to track the progress of their request through the CRA secure portals (My Account, My Business Account). This tool will inform taxpayers or their representative when a file was received and its status in the processing cycle.

The CRA will monitor the success of this new tool and determine if further enhancements, such as letters, should also be considered.

Recommendation #9

The Taxpayers' Ombudsman recommends the Canada Revenue Agency include in the acknowledgement letter sent for complex T1 adjustment requests a timeframe within which the filer can reasonably expect their T1 adjustment request to be completed.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of exception processing. Please see the CRA's overarching response on this theme.

As noted in the response to recommendation #1, in the event that the CRA is able to establish a service standard for complex adjustments, it will  provide taxpayers with the timeframe within which they can reasonably expect their T1 adjustment request to be completed into outgoing acknowledgment letters.

Recommendation #10

So that it may identify trends; ensure a better understanding of processing timeframes, inventories, delays and the causes thereof; and ensure a better understanding of the types of filers who may experience the highest negative impact of delays in processing, the Taxpayers' Ombudsman recommends the Canada Revenue Agency:

a. improve its analytics,

b. ensure internal consistency in terminology and definitions,

c. implement better tracking of the processing of late-filed T1 income tax and benefit returns, and

d. implement better tracking of the processing T1 income tax and benefit returns and adjustment requests by specialized processing workflow.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of timeliness of processing. Please see the CRA's overarching response on this theme.

The CRA agrees with these recommendations. The renewal of the individual returns processing system brings with it an improved capability to capture data and better track inventories and returns through each step of processing. These improvements will be fully completed in 2020. As a result, the CRA will improve its analytics and improve its tracking systems. The CRA is also committed to ensuring internal consistency in terminology and definitions.

Recommendation #11

The Taxpayers' Ombudsman recommends the Canada Revenue Agency change its first-in, first-out policy for the processing T1 income tax and benefit returns in specialized processing workflows and the processing of complex T1 adjustment requests:

a. to ensure the T1 income tax and benefit returns and adjustment requests of those who may experience the highest negative impact of delays are processed on a priority basis (for example, those whose benefits are impacted by a delay).

b. to first assess whether additional information may be needed from the filer or elsewhere, and request the information at that time.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of timeliness of processing. Please see the CRA's overarching response on this theme.

The first-in, first out method is predominantly used by the CRA in order to maintain fairness and efficiency in processing.  The CRA also takes steps to recognize the importance of the issuance of benefits.  As a result, the CRA does not agree with the recommendation to change its first-in, first-out policy.

Recommendation #12

The Taxpayers' Ombudsman recommends the Canada Revenue Agency (CRA) reduce the time taken to refer T1 income tax and benefit returns and adjustment requests to different areas within the CRA during processing, to minimize the time T1 income tax and benefit returns and adjustment requests sit in a queue or inventory before they are worked.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of timeliness of processing. Please see the CRA's overarching response on this theme.

The CRA agrees to continually monitor and analyze trends with respect to all tax returns, identifying areas in the process that require improvements to ensure returns are processed as expeditiously as possible.

Recommendation #13

The Taxpayers' Ombudsman recommends the Canada Revenue Agency examine the entirety of the journey of T1 income tax and benefit returns and adjustment requests and the full impact of processing timelines on filers, to reduce processing timeframes of T1 income tax and benefit returns and adjustment requests, where possible, and address the root cause(s) of delays. This analysis should also be applied in the allocation of Budget 2019 additional funding for processing T1 adjustment requests, to ensure funds are allocated effectively to address the root causes(s) of delays.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of timeliness of processing. Please see the CRA's overarching response on this theme.

The CRA agrees to continue to monitor and analyze trends with respect to all tax returns identifying areas in the process that require improvements to ensure returns are processed as expeditiously as possible.

It should be noted that the vast majority of returns filed are already processed in a timely and expedient manner. For example, during the 2019 filing season, the service standard for assessing T1 returns was met over 97% of the time (97.2% for digital returns and 97.4% for paper returns).

As the CRA must respond to numerous pressures regarding its services and programs, a thorough process exists so as to allocate funding to programs across a wide range of activities, and new funding may be requested via the Federal Budget. The CRA regularly reviews the program to determine the appropriate resource allocations.

Recommendation #14

The Taxpayers' Ombudsman recommends that, where possible, the Canada Revenue Agency address system limitations so more T1 income tax and benefit returns can be processed in a more timely manner with less manual intervention.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of timeliness of processing. Please see the CRA's overarching response on this theme.

The CRA agrees to continue to address system limitations in order to reduce processing times and reduce manual intervention.

It should be noted that the CRA is nearing the completion of its multi-year renewal of the processing framework for individual returns.  Once completed, CRA will be able to further pursue the modernization of its service offerings such as increasing the types of tax returns that can be electronically filed, decreasing the volume of returns that necessitate human intervention, and improving processing times for those returns that require manual (re)assessments.  This new capability will be available in February 2020.

Recommendation #15

The Taxpayers' Ombudsman recommends the Canada Revenue Agency utilize improved analytics and implement more transparent policies and procedures relating to the information call centre agents can provide to filers, including where the T1 income tax and benefit return or adjustment request is being processed, what is causing processing delays beyond the applicable service standard, as well as an anticipated timeframe for processing.

CRA's response

The CRA partially agrees with this recommendation.

This recommendation pertains to the theme of exception processing. Please see the CRA's overarching response on this theme.

The CRA agrees that taxpayers should be informed with respect to the status of their files, and when possible, call centre agent provide filers information on the status of their files.

The CRA has already taken steps to ensure agents have access to information and tools, in order to provide the status of taxpayer files. In May 2021, the second phase of progress tracker will enable taxpayers to track the progress of their request through the CRA secure portals (My Account, My Business Account). This tool will inform taxpayers or their representative when a file was received and its status in the processing cycle.

The CRA will monitor the effectiveness of this service and determine if it meets the needs of Canadians, and determine if and how this information can be used by call centre agents.

Overarching responses

Overarching responses

#1

Service standards theme

The CRA is responsible for the administration of the Income Tax Act (ITA) and related legislation, as well as benefit and tax credit programs on behalf of the federal, provincial, territorial, and First Nations governments. Over 29 million tax returns are received each year, with 25 million filed between mid-February and April 30th. The CRA strives to process all of these returns in an efficient manner and has made significant improvements over the last several years. For example, the CRA met the service standard over 97% of the time (97.2% for digital returns and 97.4% for paper returns).

Service standards publicly state the level of performance that citizens can reasonably expect to encounter from the CRA under normal circumstances. The CRA sets targets for achieving each service standard based on operational realities, infrastructure, available resources, historical performance, degree of complexity of the work, and expectations of Canadians.

While the majority of returns are processed within standard, there are exceptions that occur during the short timeframe of the filing season. For example, returns that have inaccurate or missing information can naturally result in delays. The ITA is complex and occasionally necessitates longer manual processing for some types of tax returns. Small volumes of each situation means the CRA's system cannot be cost-effectively programmed to assess these returns without creating an unacceptable risk to the system's integrity.

Furthermore, the CRA's mandate includes ensuring that Canada's self-assessment tax system is sustained. The CRA's review activities promote awareness of and compliance with the laws it administers and plays an important role in maintaining the integrity of, and the Canadian public's confidence in the tax system. To this end, the CRA continues to audit, verify and match during the filing period which results in a small percentage of returns taking longer to finalize.

Despite these realities, the CRA's efforts to improve service as mentioned above have facilitated annual changes to the returns processing standards allowing more transparency and clarity for both citizens and non-residents. This process is ongoing, the CRA regularly revises its service standards to make sure that they are up-to-date and relevant.

# 2

Timeliness of processing theme

Historical results illustrate that the vast majority of files are processed within the timeframes identified in the CRA's service standards. Given the short period of the filing season, combined with operational realities such as infrastructure, available resources, and the complexity of the ITA, the service standards represent a level of performance that the majority of citizens can rely upon.

The CRA acknowledges that it experienced some transitional difficulties with the introduction of the first major phase of its technological renewal in February 2016, resulting in higher than normal inventories. In November 2016, Service Renewal consolidated the workload from seven to three Tax Centres (TCs) which required the TCs to hire and train large numbers of new employees. The resulting learning curve and impact on productivity took some time to diminish. These changes were necessary to modernize both the CRA's systems and operations and the past filing season saw substantial improvements in processing timeframes.

The CRA is committed to being a fair, helpful, and responsive tax administration with a client-centric focus. Its commitment to service excellence in this regard has resulted in a number of filing improvements over the last few years. This includes sharing data on information slips via the AutoFill my Return service, simplifying the completion of returns on behalf of certain fixed-income Canadians, real-time tax return processing, improved ability to track files through each stage, more up-front validation of reported income, and immediate availability of notices of assessment. Many of these initiatives have stemmed from both increases in digital filing and a major technological investment that will see the complete redesign of the returns processing foundation.

Technological improvements are ongoing and the renewal of the processing framework for individual returns will be completed in 2020. Utilizing this foundation, the CRA will be continuing the modernization of its service offerings such as increasing the types of tax returns that can be electronically filed, decreasing the volume of returns that necessitate human intervention, and vastly improving processing times for those returns that require manual (re)assessments.

# 3

Exception processing theme

As indicated by the CRA's year-over-year results, the majority of tax returns and reassessments are processed expeditiously. Small volumes do need to be diverted from the normal flow due to errors, omissions, validation activities, or technical complexities. The timeframes involved in each type of situation are very difficult to accurately predict since there are many variables including the time needed for taxpayers to correct information or provide documentation, as well as the effort required by various areas within the CRA that must utilize specific expertise, to finalize complex files.

The CRA is making improvements to assist taxpayers in better understanding the time needed to complete their files. The first step is to improve the information available on the Canada.ca website by implementing a tool that will provide taxpayers with general processing times for a range of CRA services and an indication of when they might be able to expect a response. In addition, a progress tracker for account specific enquiries will be available in the secure portals beginning in May 2021, that will let taxpayers or their representative know when a file was received, as well as its status during the processing cycle. This same information is already available to call centre agents and is communicated to taxpayers when requested.

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