2013-14 Report on Plans and Priorities

Mission

To administer tax, benefits, and related programs, and ensure compliance on behalf of governments across Canada, thereby contributing to the ongoing economic and social well-being of Canadians.

Vision

The CRA is the model for trusted tax and benefit administration, providing unparalleled service and value to its clients, and offering its employees outstanding career opportunities.

Values

Integrity
Professionalism
Respect
Co-operation

Promise

Contributing to the well-being of Canadians and the efficiency of government by delivering world-class tax and benefit administration that is responsive, effective, and trusted.

Message from the Minister

The Honourable Gail Shea, P.C., M.P.

The Government of Canada's priority is jobs, growth, and economic prosperity. I am pleased that the Canada Revenue Agency (CRA) is helping Canadians and especially small businesses to create jobs in the communities in which we live in, small and large.

As part of our Government's Red Tape Reduction Action Plan, the CRA is moving to reduce red tape, improve our services, and talk to small businesses. Small businesses are the foundation of the Canadian economy. The CRA is listening to Canadian small businesses and moving forward on the changes they have told us are important to them, including improvements to many e-services. In the past year, we have launched a secure enquiries service where businesses can ask confidential tax-related questions. We have also created a one-stop online business portal where businesses can easily access tax information and our online services.

The CRA has a responsibility to ensure that all taxpayers comply with their obligations and to address willful non-compliance. In particular, we will address high-risk areas like aggressive tax planning, the underground economy, and international tax avoidance schemes, so that Canadians can continue to have confidence in the integrity of the tax system.

As Minister of National Revenue, I am proud to present the CRA's 2013-14 Report on Plans and Priorities which will guide us as we continue to make a difference in the lives of Canadians.

The Honourable Gail Shea, P.C., M.P.
Minister of National Revenue and
Minister of the Atlantic Canada Opportunities Agency

Message from the Commissioner

Andrew Treusch, Commissioner of the Canada Revenue Agency

As the new Commissioner of the Canada Revenue Agency (CRA) I am excited to be assuming the leadership of a world-class tax administration. The CRA has an exemplary reputation. We are a capable and focused organization with a management and staff who are committed to excellence. As we move forward to meet the challenges of the future and implement our strategic vision, I feel fortunate to be assuming the leadership of this dynamic agency.

The work that we do is essential to the social and economic well-being of Canadians. We support social programs and economic growth by delivering credits and benefits to individuals and businesses and by collecting the revenue needed for governments to provide vital programs and services. Our goal is to provide exceptional service, protect Canada's revenue base, and deliver timely and correct credit and benefit payments. We are an organization that has always valued and demonstrated integrity in all of our actions and we will continue to promote this core corporate value.

We are committed to continually improving service while also contributing to the federal government's deficit reduction goals by transforming the way that we do business. We have developed a road map to help us build on our strengths and meet the challenges of the future. This agenda is ambitious, but I feel confident that we have the right plan, the right tools, and the right people to do the job.

I am excited to have joined the CRA at this pivotal time in its evolution. I am a strong advocate of organizational development and improvement, and place a high value on integrity and professionalism, and I am delighted to be assuming the leadership of an organization that shares these values. I look forward to leading the CRA in this period of change, as we continue to provide the high-quality services that Canadians expect and deserve.

Andrew Treusch
Commissioner of Revenue and
Chief Executive Officer of the CRA

Section I: Organizational overview

Raison d'être

The Canada Revenue Agency (CRA) is Canada's tax and benefit administrator. Last year we processed almost $419 billion in taxes and duties, and issued 111 million benefit and credit payments totalling approximately $21 billion for federal, provincial and territorial, and Aboriginal governments. We provide services to over 28 million individual and corporate taxpayers. The work that we do:

  • supports job creation and economic growth, by simplifying the tax system and easing the compliance burden on taxpayers, while making sure that everyone contributes their share to fund government services;
  • helps hard-working Canadian families, by making sure they get the benefits and credits they are entitled to, on time;
  • strengthens government integrity and accountability, by providing services in line with the fairness and rigour that Canadians expect and deserve; and
  • contributes to reducing spending, by modernizing our internal operations and providing modern and efficient services.

Responsibilities

The CRA administers the Income Tax Act and the Excise Tax Act. We are also responsible for legislation related to the Canada Pension Plan, Employment Insurance, and softwood lumber. The CRA acts on behalf of the federal government and a number of provincial, territorial and First Nations governments to administer a range of ongoing and one-time benefit and tax credit programs. Our non-tax activities include the administration of charities, tobacco, registered plans, and non-tax collections activities such as Canada Student Loans.

The CRA is responsible for the processing of payments, returns and registrations, and for the verification of information submitted to ensure that it is accurate and complete. We provide the tools, information, and services to make it as easy as possible for taxpayers to meet their obligations and for benefit recipients to get their full entitlements. We are engaging with taxpayers to reduce the compliance burden and to identify priorities for service improvement. However, as responsible administrators we also actively enforce compliance where taxpayers, through errors or avoidance, do not meet their obligations.

The CRA delivers a number of federal government benefit programs and administers a range of ongoing and one-time benefit and tax credit programs on behalf of provincial, territorial and First Nations government clients. Our services to these government clients helps to avoid duplication and to reduce the cost of government. We work hard to ensure the accuracy and timeliness of the benefits and credits we deliver.

The CRA is responsible for providing a tax and benefits administration that is fair and transparent. We provide recourse for those who do not agree with our decisions, a formal service complaints process for those who are not satisfied with our service, and we provide relief to individual taxpayers in situations where the strict application of the law would be unreasonable or unfair.

The CRA contributes to three of the Government of Canada's outcome areas:

  • a transparent, accountable, and responsive federal government;
  • well-managed and efficient government operations; and
  • income security and employment for Canadians.

Strategic outcomes and program alignment architecture

Strategic outcomes and program alignment architecture

Organizational priorities

The CRA has a fundamental commitment to the principles of service and integrity. Service and integrity underpin our strategies and drive our day-to-day behaviour. The CRA's Strategic Directions, published in 2012, set out how the CRA needs to evolve over the next five to ten years to keep abreast of our changing environment and remain a modern, service-oriented, trusted and effective tax administration. In 2013-2014, our priority will be to set out specific actions we will take to reinforce service and integrity while advancing our strategic directions.

Service excellence means making it as easy as possible for taxpayers to meet their obligations, and for benefit recipients to receive the right payment, on time. The CRA is renewing its Service Strategy to ensure that Canadians continue to receive the high-quality services that they expect and deserve. Our renewed Service Strategy will ensure that we tailor service design and delivery to the needs of taxpayers, reduce red tape and the work required to interact with us, expand our range of easy-to-use, convenient electronic services, and support our employees to be service oriented in all our dealings with taxpayers, benefit recipients and their representatives.

The CRA recognizes that integrity must be the foundation of all of our activities. As custodians of personal and sensitive information we must always conduct our affairs with absolute integrity. We must also ensure that taxpayers and benefit recipients receive fair treatment that accurately reflects tax laws. In 2013-2014, the CRA will take steps to further strengthen its integrity framework, so that the personal information of taxpayers continues to be fully protected and that we live up to our reputation as a trusted tax administration.

Canadians rely on the CRA to ensure that businesses and individuals pay their fair share of tax and receive the benefits to which they are entitled. Canada has a high rate of voluntary compliance, but we must be vigilant to ensure that those who try to avoid their obligations do not succeed. The CRA will continue to further strengthen our ability to quickly identify and correct non-compliance. Aggressive tax planning, which often exploits opportunities posed by cross-border transactions, will be a particular focus, but we will also address other types of non-compliance, like participation in the underground economy, that represent a risk to Canada's revenue base and make it difficult for small businesses to compete on a level playing field.

In addition to strengthening service and integrity, and advancing our strategic directions, the CRA has placed a priority on implementation of our immediate transformation agenda. In 2012-2013, the CRA introduced a range of short and medium term initiatives that will allow us to reduce operating costs and better position the CRA for the future. Over the course of the planning period, we are taking steps to:

  • enhance our e-services and encourage taxpayers, benefit recipients and their representatives to use them;
  • ensure that compliance activities are focused on areas of highest revenue risk; and
  • improve the efficiency and effectiveness of our internal operations.

These transformation initiatives are reflected in the commitments for 2013-2014 described in this Report on Plans and Priorities.

Risk analysis

Our environment

As an organization we face an environment that presents challenges, opportunities, and risks. We must continue to deliver our mandate while strengthening our organizational capacity to mitigate risk, and take advantage of opportunities to improve our programs and services. The environmental factors we face include:

  • a highly competitive and dynamic global economy that requires the CRA to work more closely with businesses to streamline services and reduce the compliance burden;
  • the globalization of commerce and greater labour mobility that make offshore financial transfers and investments accessible to a wider range of taxpayers, increasing the risk represented by aggressive tax planning schemes;
  • the evolving expectations of citizens and businesses that are driving changes in the way we deliver services and interact;
  • new technological developments that offer opportunities to expand the use of business intelligence in our service delivery and non-compliance workload;
  • an aging workforce that represent a human resource challenge in terms of sustaining capacity and filling emerging capability gaps; and
  • the need to continue looking for efficiencies in delivering on our mandate.

Our challenge as an organization is to manage these risks and seize opportunities while continuing to deliver a world-class tax and benefits administration that is efficient, effective, and trusted.

Risk

Risk management is an essential process that strengthens our capacity to recognize, understand, and address risks. It provides a structured approach that supports a proactive response to uncertainty. In recent years the CRA has invested resources to ensure that risk assessment and management is considered in all decisions made by executives and managers. To help build and maintain risk management capacity throughout the organization, the vproduces an annual Corporate Risk Profile. This profile:

  • reports on the status of enterprise risks;
  • monitors the implementation and performance of enterprise risk action plans; and
  • ensures that enterprise risks are understood and taken into account in planning and decision making as well as facilitating the integration of enterprise risk information into planning exercises and corporate documents.

The CRA will continue to strengthen controls aimed at addressing non-compliance, particularly in regards to the underground economy and aggressive tax planning. We will maintain a strong dispute mechanism by enhancing the management of our objections inventory. We will mitigate the risks related to the delivery of timely and accurate benefit payments to Canadians through improvements to our benefit systems. From an operational perspective, our risk management priorities include the identification of workforce capacity risks and addressing existing capability gaps, with an emphasis on developping the skill sets required to deliver our programs in the future. We will also work to ensure that we have the tools and processes to promote and support knowledge transfer within our organization. As we pursue our drive to electronic, we will maintain the quality of our IT systems and our strong partnership with Shared Services Canada. Finally, we will provide support to taxpayers as we modernize our services. To do so, we will focus on maintaining effective and ongoing public communication as a means to assist Canadians during this time of change.

Our risk mitigation efforts in these priority areas will support the effective delivery of our core business, while we continue to evolve our programs and services.

Planning summary

Financial resources (thousands of dollars)

(thousands of dollars)
Total budgetary expenditures (Main Estimates)
2013-14
Forecast spending
2012-13 (Footnote 1)
Planned spending
2013-14 (Footnote 1)
Planned spending
2014-15 (Footnote 1)
Planned spending
2015-16 (Footnote 1)
Canada Revenue Agency base spending N/A 4,040,107 3,984,465 3,862,040 3,853,451
Items known for 2012-2013 and 2013-2014 but not yet included in outer years' planned spending N/A 703,318 283,000
Plus: Taxpayers' Ombudsman N/A 3,124 3,098 2,967 2,970
Total planned spending 4,276,823 4,746,549 4,270,563 3,865,007 3,856,421

(Footnote 1): The fluctuations in the Total Planned Spending budgets are largely due to the fact that certain types of expenditures are included in the current year (2012-2013) and the upcoming Estimates year (2013-2014) but are not yet included in the two outer years. More specifically:
(a) There is a carry forward of $248M from last year included in the 2012-2013 forecast;
(b) There is $175M included in the 2012-2013 forecast for maternity and severance payments; and
(c) While there is a statutory provision of $280M in 2012-2013, and $283M in 2013-2014 for disbursements to the provinces under the Softwood Lumber Products Export Charge Act, 2006, we do not have a forecast for future years.
Once these items are accounted for, as shown in Base spending budgets, the remaining variance will be primarily attributable to the gradual implementation of savings measures arising from the Budget 2012 spending review, reaching $196M by 2015-2016

Human resources (full-time equivalent)

Total budgetary expenditures
(Main Estimates)

2013-14
Forecast
2012-13
Planned
2013-14
Planned
2014-15
Planned
2015-16
39,371 41,144 39,371 38,354 38,209

Planning summary table

(thousands of dollars)
Strategic outcomes Program (P) Actual spending
2010-11 
2011-12 Forecast spending
2012-13 (Footnote 1)  
Planned Spending
2013-14 (Footnote 1)  
2014-15 (Footnote 1) 2015-16 (Footnote 1) Alignment to Government of Canada outcomes
Taxpayers meet their obligations and Canada's revenue base is protected Taxpayer and business assistance (P1) 551,883 530,542 561,868 538,855 245,811 243,702 A transparent, accountable, and responsive federal government
Assessment of returns and payment processing (P2) 683,036 642,057 641,475 595,735 559,701 575,033 Well-managed and efficient government operations
Accounts receivable and returns compliance (P3) 511,567 521,505 478,265 428,029 413,039 410,235 Well-managed and efficient government operations
Reporting compliance (P4) 1,071,359 1,055,758 1,099,842 1,015,345 988,246 980,097 Well-managed and efficient government operations
Appeals (P5) 164,065 175,064 179,149 178,625 173,148 169,228 A transparent, accountable, and responsive federal government
Eligible families and individuals receive timely and correct benefit payments Benefit programs (P6) 369,838 369,783 383,130 382,510 382,314 385,942 Income security and employment for Canadians
Supports all strategic outcomes within the CRA Internal services (P7) 1,064,087 1,053,851 1,399,696 1,128,367 1,099,782 1,089,215
Total CRA (excluding taxpayers' ombudsman) (Footnote 3) 4,415,836 4,348,561 4,743,425 4,267,465 3,862,040 3,853,452
Taxpayers and benefit recipients receive an independent and impartial review of their service-related complaints Taxpayers' ombudsman (P9) 2,730 2,731 3,124 3,098 2,967 2,970 A transparent, accountable, and responsive federal government
Total CRA (Footnote 4) 4,418,566 4,351,292 4,746,549 4,270,563 3,865,007

3,856,421

Footnote 1: The reduction in Forecast/Planned Spending over the planning period (from $4.747B in 2012-2013 to $3.856B in 2015-2016) is primarily attributable to:
(a) certain technical adjustments that are reflected only in 2012-2013 – a carry forward from 2011-2012 ($248M) and funding for maternity and severance benefits ($175M);
(b) the fact that Planned Spending in 2014-2015 and 2015-2016 does not yet include a forecast of disbursements to the provinces under the Softwood Lumber Products Export Charge Act, 2006 (which amounted to $280M in 2012-2013 and $283M in 2013-2014); and
(c) the gradual implementation of savings measures arising from the Budget 2012 spending review, reaching $196M by 2015-2016.

Footnote 2: For planning purposes, the 2013-2014 to 2015-2016 budget for real property accommodations is shown in Internal Services; at year-end, the actuals are attributed to all other programs in relevant proportions.

Footnote 3: Since the Taxpayers' Ombudsman operates at arm's-length from the CRA, this Report on Plans and Priorities does not reflect the activities of that office.

Footnote 4: Details may not add to totals due to rounding.

Expenditure profile

CRA spending trend

As illustrated in Figure 1, the total spending amounts include all Parliamentary appropriations (Main Estimates and Supplementary Estimates) and revenue sources. It also includes: policy and operational initiatives arising from various Federal Budgets and Economic Statements; transfers from the Department of Public Works and Government Services Canada, for accommodations and real property services; the Softwood Lumber Agreement; the commencement of responsibilities related to the administration of corporate tax in Ontario, and the harmonization of sales tax in Ontario and British Columbia. It also includes the Children's Special Allowance payments.

Figure 1 Planned spending trend (millions of dollars)

For the period 2009-2010 to 2012-2013, total spending also includes certain technical adjustments such as the CRA's carryforward adjustments from the previous year, and funding for maternity and severance benefits.

For the period 2014-2015 and 2015-2016, planned spending does not yet include a forecast of disbursements to the provinces under the Softwood Lumber Products Export Charge Act, 2006, (which amounted to $280M in 2012-2013 and $283M in 2013-2014).

The period 2012-2013 to 2015-2016 reflects the gradual implementation of savings measures arising from the Budget 2012 spending review, reaching $196M by 2015-2016.

Furthermore, the CRA's Statutory Authorities have also fluctuated over the course of the 2009-2010 to 2015-2016 period, as a result of adjustments to the Children's Special Allowance payments for eligible children in the care of agencies and institutions, adjustments to the rates for the contributions to employee benefit plans, and increases to the spending of revenues received through the conduct of operations pursuant to Section 60 of the Canada Revenue Agency Act.

Based on the information available at the time of publication, the CRA senior management is confident that the CRA can successfully fulfill its mandate and meet its commitments over the planning period, respecting the financial authorities granted by Parliament.

As depicted in Figure 2, over the same period, the CRA's work volumes, as measured by administrated revenues, number of transactions and benefit payments have been trending upwards.

Figure 2 Administered revenues and benefit payments (millions of dollars)

For more information on our organizational appropriates, please see the 2013-2014 Main Estimates publication.

Our contribution to the Federal Sustainable Development Strategy

The Federal Sustainable Development Strategy (FSDS) outlines the Government of Canada's commitment to improving the transparency of environmental decision making, by articulating its key strategic environmental goals and targets. The government will be consulting the public in 2013-14 regarding the second three-year cycle of the FSDS (2013-2016). The 2013-16 FSDS will be finalized in 2013-14. It will be presented as part of year-end performance reporting for 2013-14.

The CRA ensures that consideration of these outcomes is an integral part of its decision-making processes. In particular, through the federal Strategic Environmental Assessment (SEA) process, any new policy, plan, or program initiative includes an analysis of its impact on attaining the FSDS goals and targets. The results of SEAs are made public when an initiative is announced, demonstrating the CRA's commitment to achieving the FSDS goals and targets.

The CRA contributes to Theme IV – Shrinking the Environmental Footprint – Beginning with Government as denoted by this visual identifier. These contributions are components of the following program and are further explained in Section II: program 7 – internal services.

For additional details on the CRA's activities to support sustainable development please see Section II of this RPP and www.cra-arc.gc.ca/sds/. Complete details on the Federal Sustainable Development Strategy can be found at www.ec.gc.ca/dd-sd/