Red tape reduction at the CRA: reducing the compliance burden for Canadian businesses

What is red tape?
For the purposes of the Red Tape Reduction Commission, red tape is defined as the unnecessary and undue compliance burden: the time and resources spent by business to demonstrate compliance with the federal government regulations.

• The CRA's history of red tape reduction
• The Red Tape Reduction Commission
• The Government of Canada's Red Tape Reduction Action Plan
• Forward Regulatory Plans
• The CRA-specific irritants identified by small businesses and stakeholders
• Consultations

The Red Tape Reduction Commission

The Red Tape Reduction Commission (RTRC) was announced by the Government of Canada in January 2011. Its mandate was to identify irritants to small businesses that result from federal government rules and regulations. The RTRC solicited feedback through consultations and 12 roundtable sessions with Canadians and businesses between January and March 2011. During the consultation process, the RTRC compiled a list of approximately 2,300 irritants, which it included in its "What Was Heard" Report in September 2011. In January 2012, the RTRC released its final report, called Recommendations Report - Cutting Red Tape…Freeing Business to Grow, in which it provided recommendations on how government departments and agencies could address the irritants identified by small businesses on a long-term basis.

The Government of Canada's Red Tape Reduction Action Plan

The Government of Canada's Red Tape Reduction Action Plan is the government's response to the recommendations in the Red Tape Reduction Commission's final recommendations report. This Action Plan demonstrates that the Government of Canada has listened and is taking action to address all of the recommendations.

The Action Plan includes six systemic reforms, under three major themes:

• Reducing the burden on businesses;
• Making it easier to do businesses with regulators;
• Improving service and predictability.

The Government of Canada's Action Plan will introduce measures to control administrative burden on businesses and ensure that regulators are sensitive to the needs of small business when they design regulations.

Forward Regulatory Plans

Based on the RTRC’s final recommendations report, the Government has introduced forward regulatory plans to improve transparency and predictability for business and all Canadians. Forward Regulatory Plans are a publicly available list of potential regulatory actions that a government department or agency anticipates making within a two year period. These regulatory actions could serve to develop new regulations or to change existing regulations.

Forward plans will be revised and updated over time to reflect changing circumstances.

Forward Regulatory Plans include:

• the title of the regulatory proposal;
• a brief description of the regulatory proposal;
• planned public consultations; and
• instructions on how to obtain additional information.

For more information on the CRA’s Forward Regulatory Plans, go to Forward Regulatory Plan.

The CRA-specific irritants identified by small businesses and stakeholders

The RTRC provided the CRA with over 1,100 irritants identified by businesses during the consultations. The CRA analyzed and grouped the 1,100 irritants into 12 overarching issues and developed action plans to reduce or eliminate the compliance burden imposed by each irritant.

The 12 action plans are based on the following overarching issues:

1. Timely information availability and clarity
2. Effective communication to satisfy taxpayer requirements
3. Online services:
   1. information accessibility and written enquiries;
   2. improved online registration process
   3. information accessibility and clarity
   4. enhanced identity authentication
4. Accountability for written information
5. Auditors' knowledge, training and professionalism
6. "Tell us once" approach to eliminate the collection of redundant information
7. Timeliness for decisions related to appeals
8. Timeliness for decisions related to rulings
9. Numerous reporting requirements
10. Filing frequency requirements
11. Ensuring that business perspectives are fully understood and appreciated in the policy development stage
12. Coordination and collaboration among regulators.

Consultations

The CRA has developed several action plans to help reduce red tape. While some of the CRA action plans have already been implemented, other action items require consultation with the small business community to solicit their feedback on potential solutions.

In the fall of 2012, small and medium-sized businesses were invited to participate in key Red Tape Reduction consultations that will help the CRA ensure that certain action plans deliver on the priorities identified by small businesses.

The CRA looked for input on the following themes:

• Information availability and clarity
• Reporting obligations – current process and possible changes and enhancements
• Usage of existing online services
• Exploration of potential online services
• Duplication of information requirements across federal departments and across different levels of government

The results of the consultation are currently being analyzed and a “What we heard” report will be available to participants. The relevant action plans will be adjusted to focus on the highest priorities.

The CRA is committed to supporting small and medium-sized businesses by reducing red tape and making it easier for them to access services and fulfill their tax obligations. More consultations are planned for the future.