Canada Revenue Agency Annual Report to Parliament 2013-2014

Minister's message

The Canada Revenue Agency serves as the world-class tax administration that supports Canada's economic growth and prosperity. A well-functioning tax and benefit system is the backbone of a dynamic, prosperous, and democratic society.

As Canada emerges from the global economic crisis, our government remains focussed on jobs and growth. The Canada Revenue Agency (CRA) plays an important role in supporting small businesses, the engines of job creation. We extended and expanded the temporary hiring credit for small business, which will help an estimated 560,000 small businesses reinvest in their operations. We also increased the lifetime capital gains exemption which encourages investment in small business and makes it easier to transfer family businesses to the next generation. These tax relief measures will help small businesses plan for the future and build the skilled workforce Canada needs to compete successfully.

The CRA is doing its part to make sure small business investments contribute to growth and are not tied up in red tape. The CRA's significant contribution to our government's Red Tape Reduction Action Plan includes an expansion of CRA online services, making tax compliance simpler for small businesses and their tax representatives. For example, Canadian businesses can now choose to receive electronically their notices of assessment and reassessment and letters for their corporate and GST/HST accounts. Online filing rates for individual taxpayers also reached all-time highs in 2013-2014, as more Canadians opted for the convenience of secure online filing.

Public confidence in the fairness of Canada's tax system is assured when everyone pays the taxes they owe. That's why our government is combatting tax evasion and the use of tax havens, which undermine the tax system and place an unfair burden on law-abiding Canadians. The CRA's Aggressive Tax Planning program challenges abusive schemes designed to avoid reporting or paying tax on income. In January 2014, I announced the new Offshore Tax Informant Program under which the CRA may make financial awards to informants providing evidence of major international tax non-compliance leading to the collection of taxes owing. As of March 31, 2014, the CRA had received 63 written submissions, an indication that this and other measures we have recently taken to combat international tax evasion are helping to ensure a level playing field for all Canadians when it comes to Canada's tax laws.

The tax system can be complex, especially for small and medium-sized businesses that may need help understanding their obligations and paying the taxes they owe. The CRA's records show that, each year, about a third of the income tax returns from these smaller enterprises contain errors. Our government is responding by introducing several measures to help businesses and make it easier for them to comply. For example, the CRA began pilot-testing the Liaison Officer Initiative. Through this initiative, CRA employees help taxpayers at key points in the business life cycle, such as when they start up a new business, hire staff, or make important investment decisions. The Liaison Officer Initiative can help businesses avoid errors that could end up being costly and time-consuming down the road.

"Supporting small business is a key motivation behind our government's Red Tape Reduction Action Plan, to which the CRA is making a very significant contribution." —Kerry-Lynne D. Findlay

More Canadians are working now than ever before and the economy is once again growing. Our government is committed to making sure Canadian families and communities remain secure and strong. In 2013-2014, our government added several new tax credits and exemptions to assist families and communities. For example, there are now credits and exemptions for Canadians needing a variety of therapeutic services and devices, and an adoption expense tax credit to make adoption more affordable. And, for the 2014 and later tax years, the CRA will administer a new search and rescue volunteers tax credit to recognize the important role played by ground, air, and marine search and rescue volunteers.

I am proud of all that the CRA accomplished in 2013-2014, and I continue to be impressed by CRA employees' dedication to integrity and service and by their contributions to Canada's growth and prosperity.

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The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P.
Minister of National Revenue