Closing Report on Action Items - October 2011
Helping Small Businesses by Reducing the Compliance Burden
Canada Revenue Agency
Table of contents
- Message from the Commissioner
- Executive Summary
- Closing Report on Action Items
Working to meet the needs of small businesses has always been an Agency priority, and prompted the establishment of the CRA's Action Task Force on Small Business Issues in 2006. In light of the more recent government initiatives on compliance burden reduction, I am pleased that the Canada Revenue Agency (CRA) was ahead of the curve in initiating changes to help reduce the compliance burden for small businesses.
In its first report entitled Helping Small Businesses by Reducing the Compliance Burden, the Action Task Force committed to implementing 61 recommended initiatives. It also committed to maintaining the CRA's focus on burden reduction in the years to come in a way that is consistent with its overall accountability for tax compliance, revenue collection, and taxation data collection.
The task force recommendations struck an important balance between reducing red tape and maintaining the integrity and fairness of Canada's tax system.
Since the release of the first report, Helping Small Businesses by Reducing the Compliance Burden, the CRA has devoted considerable effort toward addressing the recommendations. Early in his tenure as the Chair of the Action Task Force, Bill Baker, then Commissioner and Chief Executive Officer of the CRA, stated that the process to be followed by the Task Force would ensure that "when all is said and done, more is done than said."
The CRA demonstrated steady progress in three progress reports issued in 2007, 2008, and 2009 respectively. I am pleased to report that all 61 recommended action items have now been addressed. This report, the Closing Report on Action Items, shows that more has been done than said.
Introducing a systemic approach to burden reduction across the CRA was one of the mandates of the task force. This report shows not only our progress, but also how the changes we have made to address the action items have, in many cases, become systemic. Ongoing awareness of the need to minimize the administrative burden placed on small business is reflected in our strategic plans, principles of service delivery, and business transformation, and this consideration is increasingly systemic in our daily operations.
I am proud of the achievements of the CRA that are documented in this report.
Commissioner and Chief Executive Officer
Canada Revenue Agency
The Canada Revenue Agency's Action Task Force on Small Business Issues was created in the summer of 2006 to identify which of the administrative practices of the Canada Revenue Agency (CRA) imposed the greatest burden on small businesses, develop solutions to reduce the burden, and introduce a systemic approach to burden reduction across the CRA. Membership included private-sector representatives familiar with small business issues and senior CRA officials.
In March 2007, the Task Force published a report called Helping Small Businesses by Reducing the Compliance Burden. In it, the Task Force identified 61 concrete actions to be taken by the CRA to reduce the compliance burden on small businesses and support the achievement of the federal government's burden reduction targets. The CRA committed to establish ongoing accountability for burden reduction, champion burden reduction across the Agency, and regularly report on progress.
The CRA has monitored its progress in three keys areas identified by the Task Force:
- Simplifying, improving, and where appropriate, reducing the frequency of small business interactions with the CRA;
- Improving how and when the CRA communicates with small businesses; and
- Making burden reduction systemic within the CRA.
Continuing progress was described in three status reports:
- Interim Report on Action Items November 2007
- Final Report on Action Items November 2008
- Update on the Final Report on Action Items November 2009
At the time of the November 2009 report, four action items—1.1.6, 1.3.3, 1.3.4, and 3.1.4—were not complete. We are pleased to report that the CRA has now implemented all 61 action items identified by the Task Force. This report details all of the efforts to address the action items and shows that many of the actions have become an ongoing part of day‑to‑day business as we continue to make meaningful reductions to the compliance burden on small business.
In the following pages the action items that were identified in the March 2007 report are listed in italics followed by the actions taken by the CRA to meet the objective.
Focus 1: We will simplify, improve, and, where appropriate, reduce the frequency of small business interactions with the CRA.
1.1 Actions taken or underway
1.1.1 - Completed
The CRA is currently developing a simplified claim form for the Scientific Research and Experimental Development Program, as well as a self-assessment tool to help claimants determine potential eligibility for this program.
Revised Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and the self-assessment tool are available at www.cra.gc.ca/sred.
1.1.2 - Completed
In September 2006, the CRA introduced a new online service called My Business Account to provide business owners with faster, more accessible, and more transparent government service. Through My Business Account, business owners can request a Canada Pension Plan/Employment Insurance ruling, register a formal dispute (objection), file a corporation income tax return, make certain online requests, and view account balances for corporation tax, excise duties and taxes, among other features. The CRA will continue refining and expanding the functionality of this service.
The My Business Account portal offers secure electronic management of business tax-related information. Its services are available to registered business owners seven days a week at www.cra.gc.ca/mybusinessaccount. Authorized representatives can access information via the complementing portal at www.cra.gc.ca/representatives.
There is a dedicated and funded program supporting My Business Account. The CRA continues to regularly expand the service's functionality as new or enhanced features become available semi-annually. The services a business needs are available whenever they are needed, and from anywhere there is access to a computer—all without having to contact the CRA.
Over 1,000,000 of the total 2.2 million businesses in Canada are now registered either as owners or authorized representatives to access information from My Business Account
See item 1.3.3 for a summary of My Business Account services.
The Government of Canada and the Government of Ontario recently signed an agreement to have the CRA administer corporation taxes on behalf of that province. The Corporate Tax Administration for Ontario (CTAO) initiative is expected to benefit hundreds of thousands of businesses throughout the province of Ontario. This initiative will be developed and implemented over several years.
In June 2007, the Province of Ontario implemented the Taxation Act 2007, allowing the CRA to administer most taxes for Ontario corporation tax years ending after 2008. The CRA began receiving combined federal and provincial tax instalment payments in 2008 for the tax years ending in 2009, and in 2009 began processing single, harmonized returns for Ontario corporations.
The CRA is now the single point of contact for all matters relating to Ontario provincial and federal corporation income tax, corporation minimum tax, capital tax, and the special additional tax on life insurers.
The change is expected to save the 40–50% of Canada's businesses located in Ontario an estimated $100 million a year in administrative costs and an additional $90 million by reducing Ontario corporation income taxes through the move to a harmonized tax base.
1.1.4 - Completed
The CRA will continue to coordinate its compliance activities and expand its risk management practices to minimize the disruption on small business taxpayers. For example, plans to introduce integrated enforcement teams and increase the coordination of federal and provincial audits under the Corporate Tax Administration for Ontario (CTAO) are well underway. Also, the CRA recently expanded its combined audit program, which reduces the inconvenience, and costs to small businesses by having a single auditor review the same records for both income tax and goods and services tax/harmonized sales tax (GST/HST) purposes. We will build on these initiatives and others as part of our program process, giving due consideration to the needs of small businesses.
As stated under action item 1.1.3, the CRA is now the single point of contact for all matters relating to Ontario provincial and federal corporation income tax, corporation minimum tax, capital tax, and the special additional tax on life insurers. Therefore, Ontario corporations are now subject to only one income tax audit instead of separate audits of provincial and federal income taxes.
With the implementation of the harmonized sales tax (HST) in Ontario, the CRA administrates HST for four provinces, eliminating the need for both goods and services tax (GST) and provincial sales tax audits for businesses in those provinces.
A pilot of integrated audits for GST/HST and income tax was completed on March 31, 2008. However, with the increased compliance risk related to HST administration, it was decided that a more focused approach on GST/HST audits is necessary due to the different nature of income tax and GST/HST. As a result, integrated audits were discontinued as of July 1, 2010. Auditors are now becoming GST/HST or income tax specialists rather than generalists, enabling more focus on high-risk files and dispute resolution at an earlier stage. Workload referral procedures have been put in place to increase audit efficiencies, while providing the different audit specialists with business intelligence that will enhance risk assessment for both GST/HST and income tax lines.
1.1.5 - Completed
The CRA will continue to work with the Department of Finance and our provincial and territorial partners to expand the adoption of the Business Number (BN) as a national business identifier. To date, the provinces of Nova Scotia, New Brunswick, British Columbia, and Manitoba have adopted the BN for their provincial programs.
The provinces of Nova Scotia, New Brunswick, Manitoba, Ontario, and British Columbia use the Business Number (BN) as an identifier in provincial programs. This use of the BN is growing.
Ontario has adopted the BN for its Ministry of Revenue programs and three Ministry of Labour programs. The Ministry of the Environment is scheduled to start using the BN as of September 2011 and the Companies Programs Branch of the Ministry of Government Services in October 2012. Many more Ontario government programs are looking at adopting the BN.
Manitoba is adopting the BN for its Workers Compensation Board program and its Financial Institutions Regulation Branch programs.
The CRA and the Province of Saskatchewan are developing a partnership that will see the province adopting the BN in April 2012 for its Workers' Compensation Board, Ministry of Finance, and the Corporations Branch of the Information Services Corporation.
Legislative changes were enacted in 2009 to let the CRA share information with municipal and Aboriginal governments. Ontario and the CRA have started discussing the adoption of the BN by Ontario municipalities. The provinces of British Columbia and Manitoba are seeking partnerships with their municipalities to adopt the BN.
1.1.6 - Completed
The CRA works closely with our provincial and territorial counterparts to identify ways to reduce the burden on small businesses. For example, the Ontario Ministry of Finance has adopted the practice of accepting the CRA's Canada Pension Plan/Employment Insurance (CPP/EI) rulings on the employee/employer relationship for purposes of administering their Health Tax. As a result, businesses avoid unnecessary work and the conflict of differing opinions at two levels of government.
In administering their Employer Health Tax, the Government of Ontario accepts CRA ruling decisions on CPP/EI when provided by individuals.
The CRA is working with Human Resources and Skills Development to secure authorization to share contents of CPP rulings relative to Ontario taxpayers directly with the Government of Ontario.
CRA regions meet regularly with their provincial counterparts and business associations. For example, a joint task force was created with Revenu Québec to define the various stages in the collection process and to identify the common steps that would help to harmonize and coordinate those activities. The CRA also actively participates on Ontario's Small Business Advisory Committee, the Canada Ontario Business Service Centre Managing Partners Board, and the Ontario Tax Liaison Group.
1.1.7 - Completed
The CRA actively participates in initiatives to reduce the paperwork burden at both the federal government and CRA levels. For example, the CRA is an active member of Industry Canada's joint public/private sector Advisory Committee on Paperwork Burden Reduction.
The CRA contributed to the second Advisory Committee on Paperwork Burden Reduction (ACPBR) Progress Report published in May 2008.
The CRA was one of 13 federal agencies and departments participating in the Government of Canada 20% Burden Reduction Initiative led by the ACPBR. The CRA identified over 36,000 reporting obligations, and eliminated over 9,000 of these obligations through reducing information requests on income tax forms and reducing the required filing frequencies for excise-related returns.
The CRA achieved a burden reduction rate of 24.2%.
1.1.8 - Completed
The CRA will continue to work with Service Canada to identify ways of reducing the number of Pensionable and Insurable Earnings Review (PIER) reports generated to employers.
Changes have been made to the system that identifies PIER discrepancies. These changes have significantly reduced the number of potential discrepancies being referred to employers through PIER reports.
The T4 Desktop and Web form applications used by T4 filers now perform automatic rudimentary checks for Canada Pension Plan and Employment Insurance contribution deficiencies before filers transmit a T4 return to the CRA. These checks allow filers to correct possible deficiencies, further reducing potential PIER reports.
1.1.9 - Completed
In August 2006, the CRA created the Action Task Force on Small Business Issues. Its members examined a variety of sources such as survey results, and presentations from both private and public sector officials to identify which of the CRA's administrative practices impose the greatest burden on small businesses. The results of the Statistics Canada Survey of Regulatory Compliance Costs were of particular significance. The members identified specific initiatives to be undertaken by the CRA to reduce this burden, which are contained in this report.
Helping Small Businesses by Reducing the Compliance Burden, the report of the Action Task Force on Small Business Issues was released on May 27, 2007.
The CRA reconvened the Task Force in November 2007 to deliver the Interim Report on Action Items, has provided status reports as of November 2008 and November 2009, and is now providing the Closing Report on Action Items.
1.2 Actions planned for 2007–2008
1.2.1 - Completed
In 2007, new federal legislation was introduced to increase the lifetime capital gains exemption for farmers, fishermen and-women, and small business from $500,000 to $750,000.
Legislation received Royal Assent on December 14, 2007.
Changes to the individual processing system were successfully implemented for the 2007 individual tax-filing season.
At least 4,800 people took advantage of the increased lifetime limit in the first year. This is based on the numbers who have claimed more than $250,000 in the capital gains deduction field on their return.
1.2.2 - Completed
New legislation will allow qualifying small businesses to remit their income tax instalment payments quarterly instead of monthly. This measure will apply in respect of corporate taxation years starting after 2007.
Legislation received Royal Assent on December 14, 2007.
Required systems changes were implemented in October 2008 and in October 2009, decreasing the number of income tax instalments in a year for qualifying small businesses.
1.2.3 - Completed
The corporate income tax payable threshold, at or below which corporations are eligible to remit annually, will be increased to $3,000 from $1,000. This measure will apply in respect of corporate taxation years starting after 2007.
Legislation received Royal Assent on December 14, 2007.
Required system changes to prepare for recognizing annual remitters were implemented in October 2007, enabling more corporations to remit income taxes once a year rather than monthly.
1.2.4 - Completed
The net personal income tax threshold, at or below which individuals do not have to pay instalments, will be increased to $3,000 from $2,000. This change will apply to the 2008 and subsequent taxation years.
Legislation received Royal Assent on December 14, 2007.
Required accounting systems changes were successfully implemented in time for the February 2008 instalment notice.
Based on the difference in the number of NIL instalment reminders issued in 2007 and 2008, approximately 244,600 fewer individuals were required to pay instalments of tax as a result of the increased threshold.
1.2.5 - Completed
Eligible businesses whose average monthly withholdings are less than $3,000 may remit source deductions quarterly instead of monthly. Currently, only eligible businesses whose average monthly withholdings are less than $1,000 may remit source deductions quarterly. These changes will apply to calendar years beginning with 2008.
Legislation received Royal Assent on December 14, 2007.
Required systems changes were implemented in January 2008.
This change allowed over 135,000 additional source deduction remitters to make quarterly verses monthly remittances in 2008.
1.2.6 - Completed
Qualifying businesses whose net tax is less than $3,000 will be able to remit the the goods and services tax/harmonized sales tax (GST/HST) annually, instead of quarterly. Currently, only qualifying businesses whose annual net tax is less than $1,500 can remit the goods and services tax/harmonized sales tax (GST/HST) annually. This measure will apply in respect of GST/HST registrant's fiscal years beginning after 2007.
Legislation received Royal Assent on December 14, 2007.
Required system changes to recognize businesses now eligible to remit annually were implemented in October 2007.
1.2.7 - Completed
Businesses with taxable supplies not exceeding $1.5 million may elect to have goods and services tax/harmonized sales tax (GST/HST) reporting periods that are fiscal years instead of fiscal quarters. Currently, only businesses with annual taxable supplies not exceeding $500,000 are eligible to have reporting periods that are fiscal years and thereby to file an annual GST/HST return. This measure will apply in respect of GST/HST registrant's fiscal years beginning after 2007.
Legislation received Royal Assent on December 14, 2007.
Required system changes were implemented in October 2007.
1.2.8 - Completed
The CRA will continue to work with the Department of Finance and small business stakeholders to identify simplification options that could reduce the compliance burden on small business taxpayers. This could include initiatives to simplify the tax provisions relating to automobile expenses and taxable benefits.
The Department of Finance and the CRA partnered in commissioning a consulting firm to gather and report on suggestions from small business taxpayers for reducing the compliance burden. In April 2008, the Department of Finance solicited comments from business associations representing Canadian small businesses.
The ensuing suggestions were analyzed and implemented where feasible.
After a series of consultations with business owners and their representatives, a new, simplified logbook option to support motor vehicle expense claims was announced in June 2010. The option involves maintaining a full logbook for one complete year to establish the business use of a vehicle for income tax and goods and services tax/harmonized sales tax (GST/HST) expense purposes, and thereafter a three-month sample logbook will be enough to determine annual business use of a vehicle. The option took affect immediately.
1.2.9 - Completed
Based on feedback from small businesses and their representatives, the CRA will conduct periodic reviews of our administrative thresholds to ensure that these thresholds remain effective and appropriate.
All restrictions for electronically filing goods and services tax/harmonized sales tax (GST/HST) returns have been lifted. Filers can now use all of GST/HST NETFILE, GST/HST TELEFILE, GST/HST TELEFILE, GST/HST EDI, and Internet File Transfer.
Over time, the thresholds relating to electronic filing of information returns and slips were also reviewed and changed to allow more filers to use electronic filing. Returns encompassing over 50 information slips now have to be filed over the Internet.
The capacity of the CRA T4 Web forms online interactive service for smaller employers is continually increasing. The service enables employers to prepare original and amended T4 slips, validate data, calculate totals for the summary, use the electronic data to print a summary and employee T4 slips, and file the returns electronically directly from the CRA Web site. The service does not require special software to prepare or submit T4 slips and summaries.
Over the course of the next two years, Web forms will be expanded to encompass filing most other types of information slips and summaries and to increase the capacity to file more slips in one session. This will provide small businesses filing less than 50 slips at a time with a secure, easy, and cost-free option to file information returns with the CRA.
The CRA proposed legislative changes to decrease the required filing frequency of certain excise tax returns based on a threshold and risk analysis review. These changes were passed late in 2010 and are now in effect.
To further enhance self-service through secure electronic services, the CRA is considering a comprehensive review and benchmarking of the current Business Registration Online system. The aim is to create an online business registration application that meets the needs of both the business community and the CRA, is easy to use, connects to other CRA electronic services, and is adaptable to future technological advancements.
Reviewing administrative thresholds, particularly those dealing with electronic services, is now part of regular program administration.
1.2.10 - Completed
The use of the Business Number will be expanded in 2007, when the Province of Ontario adopts the Business Number for its Retail Sales Tax Program.
The Ontario Retail Sales Tax Program began using the BN as an identifier for new Ontario retail sales tax (ORST) accounts as of July 14, 2008. All existing ORST accounts were assigned BNs in September 2008.
1.2.11 - Completed
In February 2008, harmonized corporate instalment payments will begin under the Corporate Tax Administration for Ontario (CTAO) initiative.
The CRA started receiving combined provincial and federal corporation income tax instalment payments from Ontario corporations, as scheduled, for tax years ending after December 31, 2008.
Enquiries agents were trained and started responding to enquiries on blended payments and the harmonized return in February 2008.
1.2.12 - Completed
In 2007-2008, the CRA will enhance My Business Account to enable representatives to view and/or transact on behalf of a business, with owner consent. Additional services will also be available such as filing goods and services tax/harmonized sales tax (GST/HST) return, downloading previously issued statements and notices, and viewing account balance transactions.
As of October 2007, business owners could authorize a representative to view information about the businesses and complete certain self‑service functions online on behalf of a business owner. Representatives use the Represent a Client service at www.cra.gc.ca/representatives.
For a full list of My Business Account services see item 1.3.3.
1.2.13 - Completed
In October 2007, the electronic filing of goods and services tax/harmonized sales tax (GST/HST) returns will be enhanced to allow debit GST/HST returns to be filed electronically.
Enhancements to the GST/HST electronic filing systems permitted filing of GST/HST debit returns in October 2007.
1.2.14 - Completed
The CRA will continue to work with the Department of Finance to assess the results under graduated penalties with respect to late payroll remittances and determine if changes are warranted.
Changes to graduated penalties for late payroll remittances were proposed to the Department of Finance and resulting legislation received Royal Assent in June 2008.
The legislation focuses on good performance and deters employers who chronically remit late. The graduated penalties are:
- 3% for remittances that are late three days or less;
- 5% for remittances that are four or five days late;
- 7% for remittances that are six or seven days late; and
- 10% for remittances that are eight or more days late.
1.2.15 - Completed
The CRA will review the guidelines for providing relief from penalty or interest charged on late payroll remittances under the Fairness provisions of the Income Tax Act, and will update these guidelines, if warranted. In spring 2007, the term “Fairness Provisions” will be replaced by “Taxpayer Relief Provisions”.
Review of the guidelines and the graduated penalty regime administered by the CRA led to proposed legislation for graduated penalties on payroll remittances.
The term “Taxpayer Relief Provisions” was introduced in May 2007 with the release of the new Information Circular IC-07-1, Taxpayer Relief Provisions, and the revised Form RC4288 to request relief.
1.3 Actions planned for April 2008 and beyond
1.3.1 - Completed
In fall 2008, the CRA will introduce a simplified claim form for the Scientific Research and Experimental Development program, as well as a self-assessment tool to assist claimants in determining potential eligibility for this program.
Revised Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and the self-assessment tool are available at www.cra.gc.ca/sred. The CRA also produced a CD-ROM, as well as a new brochure and leaflet, with valuable information for new and existing claimants.
1.3.2 - Completed
In January 2009, a harmonized corporation return will be introduced as part of the Corporate Tax Administration for Ontario (CTAO) initiative. When fully implemented, CTAO will result in a number of benefits for small businesses, such as one annual return based on the same filing and payment requirements, a common definition of taxable income, blended payments, one point of contact for both provincial and federal tax information, one audit covering both federal and provincial tax with one set of audit findings, and a single objections and appeals process.
The harmonized 2009 T2 Corporation Income Tax Return and new Ontario schedules were available on the CRA Web site and in print in time to file 2009 corporation returns.
System processing of the harmonized returns began in April 2009.
Longer-term enhancements to My Business Account include allowing users to update the operating name of their business and business address, transfer payments from one period to another, as well as from one business program account to another, and view their employer remitter type, which affects the frequency of their payroll remittances.
Enhancement of My Business Account services is continuing. Since its inception in the fall of 2006, My Business Account at www.cra.gc.ca/mybusinessaccount has grown to include:
- filing and viewing the status of corporation, goods and services tax/harmonized sales tax (GST/HST), and payroll returns;
- viewing account balances, activities, interest calculations, and banking information for most account types;
- calculating instalment payments for corporation income tax and GST/HST;
- viewing certain correspondence sent by the CRA and making online requests (close a Business Number account, interest reviews, credit transfers, payment searches, additional remittance vouchers, copies of notices and statements, customized statements, and discontinuing mailed paper statements) for most accounts;
- transferring accounting data to the CRA for audit purposes,
- registering a formal dispute (notice of objection or appeal);
- requesting a Canada Pension Plan or Employment Insurance ruling;
- viewing and managing business operating names;
- authorizing and managing representatives' access to account information;
- adding or deleting a Business Number for online access;
- viewing payroll remittance requirements, providing a nil remittance, or asking that a payroll account be closed;
- filing TFSA annual information returns, viewing their status, and downloading rejected records;
- viewing the status of endorsements and assessment type (return assessment/reassessment, endorsement fee, refund, penalty, audit, or appeal), and the amount of each return for the previous 12 months for excise, Air Travellers Security Charge, and Softwood Lumber Product Export Charge accounts; and
- linking to the CRA's My Payment service, Nova Scotia Business Registry Services, and CRA enquiries agents.
1.3.4 - Completed
The CRA will work with our provincial partners to increase the coordination and harmonization of federal and provincial business programs.
The CRA worked intensively with the Ontario Ministry of Revenue on the transfer of corporation tax administration to the Agency, an extensive initiative demonstrating the CRA's partnerships with provincial authorities. Ontario corporations now benefit from one point of contact for corporation income tax, corporation minimum tax, capital tax, and the special additional tax on life insurers. Ontario businesses are estimated to save $100 million a year in administrative costs and an additional $90 million from reducing Ontario corporation income taxes through the move to a harmonized tax base.
The CRA also partnered in a coordinated approach with the Province of Ontario in some collection activities. This means businesses deal with only one entity on overdue accounts common to the federal and Ontario governments.
The implementation of harmonized sales tax in Ontario represents another significant advancement in this area. Ontario businesses collecting goods and services tax (GST) and provincial sales tax (PST) in these provinces will save millions of dollars in compliance and administration costs through combined returns, remittances, audits, appeals, and taxpayer services.
2.1 Actions taken or underway
2.1.1 - Completed
It is already a standard procedure to use plain language in CRA forms and publications, and so is soliciting feedback from users through sources such as Your Opinion Counts, focus testing, and our Web comments mailbox. We continually work to achieve the correct balance between the use of plain language and the timely delivery of accurate legislative information. We will continue to monitor all feedback and strengthen existing processes. The CRA has employer representatives such as the Canadian Payroll Association enhance its communications by reviewing its brochures, publications, and Web site on a regular basis to enhance their readability.
A select number of publications are scheduled for extensive plain language review each year. The CRA continues to involve groups representing businesses in reviewing business‑related forms, publications, and Web site coverage.
Business users have been consulted on the structure, usability, and labelling of the CRA Web site and appropriate revisions have been made.
All feedback received through “Your Opinion Counts” and the Web comments mailbox is reviewed by the area responsible for the product in question.
2.1.2 - Completed
The CRA will continue to review the most common errors made by small business taxpayers on their forms and returns to identify opportunities for improving content and layout.
Common errors are routinely reviewed to understand where taxpayers have difficulty in complying with legislation or completing forms. The CRA then revises the information products and forms to improve the clarity of the information presented and the manner in which the forms capture required information.
“How to avoid common T4 reporting errors” is provided on the CRA Web site to help taxpayers complete T4 forms and summaries correctly.
2.1.3 - Completed
The CRA reviews our Web links and printed publications to improve the bundling of information and to provide online links between relevant Web content for users.
Web analysis is routinely done to improve Web users' experience. The CRA has adopted a Publishing Content Management Solution to ensure consistency and appropriate bundling of information across product lines.
The review and update of our Web links and publications is a systemic and ongoing process within the areas of the CRA producing public documents.
2.1.4 - Completed
The CRA recently revised the information we provide about the capital gains deduction to make it clearer, and we restructured this information to make it more accessible.
Capital gains information was revised early in 2008.
Subsequently revised information was distributed to external stakeholders, such as the Canadian Federation of Independent Business, for comment.
2.1.5 - Completed
The CRA has improved the timeliness and accessibility of our information through the introduction of “Smartlinks”. This technology allows Web users to access a CRA agent directly from our Web site. The agent can then help them navigate through the site or provide them with additional information.
To improve the timeliness and accessibility of our information, “Smartlinks” technology was introduced to allow Web users to access a CRA enquiries agent directly from the Web site using a “Contact Us” button. The agent can then help users navigate through the site or provide them with additional information.
There are 26 “Smartlinks” available in the My Business Account online service to help businesses with their account-specific enquiries.
2.1.6 - Completed
The CRA has recently standardized and enhanced its training program for our telephone agents. This new program is supported by enhanced online training and improved reference tools. The content of the program has been tailored to address the most frequently asked questions, as well as complex topics, and is designed to ensure that responses to telephone enquiries are accurate and consistent.
The training is now the standard used for all new telephone agents and is delivered during their orientation. Experienced agents receive supplementary training as, and when, required.
2.1.7 - Completed
The CRA recently developed the CRA Electronic Services for Businesses and Individuals CD-ROM. This tool is designed to increase awareness of the CRA's electronic services for small business and to familiarize new small business taxpayers with the CRA's Web site. It has been distributed to participants at CRA small business outreach events. It will ultimately be expanded to include content from provincial and territorial governments.
The initial version was expanded to include links to information from all provinces and territories.
2.1.8 - Completed
CRA employees with the highest levels of interaction with small business taxpayers participated in information sessions designed to increase their awareness of the electronic products and services the CRA offers small businesses. A more formalized program is being developed.
The Electronic Services for Businesses and Individuals CD-ROM was provided at the information sessions.
A more formalized multimedia online program on electronic services became available to all employees on November 27, 2007. Employees were encouraged to use the training in an all-staff communiqué.
Regular reminders of the multimedia program will be communicated to all employees. The program is also being used for the newly hired.
2.1.9 - Completed
The CRA recognizes the benefits of presenting information in a variety of formats and continues to explore new ways of doing so. We recently developed a series of questions and answers to communicate legislative changes related to the apprenticeship job creation tax credit and the deductibility of tradespersons' tools. These were provided to CRA agents and posted to the CRA Web site.
The CRA continues to use innovative ways and formats to disseminate information.
These have included:
- notices directly mailed to approximately 4.6 million business addresses in December 2007 to advise businesses of the changes affecting them as a result of the federal Budget 2007 and the 2007 Economic Statement;
- information segments featured on Dotto Tech, a national television show featuring electronic services for small businesses;
- time-sensitive “Tax Tips” on the CRA Web site and by electronic subscription communicate key information to businesses including enhancements to our electronic services;
- working with Industry Canada and other partners to provide links from their Web sites to information on the CRA Web site;
- using regular outgoing statements from the CRA to announce new services such as enhancements to My Business Account, upcoming legislative changes, or pending issues and methods to resolve them;
- Business-related webinars with the ability to give, receive, and discuss information without having to physically attend a seminar; and
- webcasts featured on the CRA Web site converted from the live webinars in which the data transmission is one way and does not allow interaction between the presenter and the audience.
These practices continue to be used whenever appropriate.
2.1.10 - Completed
Public information seminars are one of the CRA's most effective tools for communicating with small businesses, and many of our outreach activities are conducted in collaboration with our provincial partners. In 2005-2006, the CRA delivered over 1,400 business-related seminars nationwide to 26,500 participants. In Ontario, over 200 joint provincial sales tax (PST) and goods and services tax/harmonized sales tax (GST/HST) seminars were delivered to 4,300 participants. We will continue to update our seminars to ensure that the information we provide remains relevant and timely. For example, we will be piloting an updated Small Business Information Seminar presentation in spring 2007.
Since 2006–2007, the CRA has held an average of 2,250 business outreach events annually involving over 384,000 participants.
The business-related webinars and webcasts, described in Action Item 2.1.9 are popular alternatives to attending live seminars, enabling businesses to participate regardless of their location.
As well, the CRA routinely sends subject matter experts to trade shows and business association events.
Strengthening outreach and communications is one of three broad activities under the current CRA Service Strategy.
2.1.11 - Completed
In 2006 and 2007, the CRA launched an advertising campaign designed to increase awareness among business taxpayers of the CRA's suite of electronic products and services for business.
Post-advertising campaign evaluations were through online surveys and telephone interviews. The research showed that there may be an increased use of electronic products and services by small businesses to get information from, and transact with, the CRA.
2.1.12 - Completed
The CRA recently conducted an initial survey of business users of the CRA Web site to gauge their awareness and use of the CRA's electronic services for business. This information will guide the development of the CRA's electronic services and influence our promotional activities.
Survey findings prompted improvements to the way information for businesses is organized on the CRA Web site. The home page was redesigned to better separate business and individual-related information and to group main business topics.
2.2 Actions planned for 2007–2008
2.2.1 - Completed
In 2007-2008, the CRA will review our business communication products to ensure that their content is relevant, appropriate, and presented in plain language. We will strengthen the existing processes to solicit feedback from small business stakeholders on our business publications. We will evaluate the forms most commonly used by small business taxpayers with a view to streamlining them, where possible, and making them more user friendly.
A quality assurance process has been implemented to ensure content is relevant, appropriate, and written in plain language. This is supplemented by scheduled extensive plain language and readability reviews on selected business-related information products each year.
Publications on similar subjects have been reviewed and, where feasible, bundled. For example, eight separate publications containing information on capital cost allowance for various sectors including farming, fishing, and professionals, were consolidated into one streamlined, easily accessible, user‑friendly product.
External stakeholders are increasingly invited to comment on draft publications.
The External Administrative Correspondence Steering Committee was formed to implement an Agency-wide approach to improving the quality of the CRA's outgoing correspondence. Branches have integrated sample reviews of letters or notices into their ongoing monitoring activities. Managers at all levels from headquarters and the regions are increasingly working together to improve and maintain the quality of written communications. Each branch with a responsibility for external administrative correspondence has established action plans based on three supporting pillars:
- accountability, including the commitment to excellence in communications as a performance expectation, process mapping, and performance indicators;
- tools and training, including widespread plain language training, and using best practices and common tools; and
- systems and resources.
The Steering Committee reports annually to senior management.
2.2.2 - Completed
The CRA will continue to focus on providing accurate and consistent responses to telephone enquires. For example, the CRA is developing a proposal to implement centres of expertise to respond to enquiries received on complex issues. We are also developing a strategy to strengthen our existing quality assurance program for telephone service.
The centre of expertise methodology routs specific enquiries to officers explicitly trained to respond on the following topics: eligible dividends, farming and fishing, taxable benefits (including automobile benefits), board and lodging, stock options, and clergy allowance.
The CRA telephone enquiries program now captures data on agent accuracy online that provides more timely and accurate information used to identify accuracy trends and gaps, and any need for more training and procedures. This is a cornerstone in the strategy towards strengthening quality call assurance.
2.2.3 - Completed
We will expand the number of “Smartlinks” pages on our Web site.
“Smartlinks” technology was initiated at the CRA in 2004 with 76 business-related links. As the CRA Web site is frequently updated, the number of “Smartlinks” varies.
As of November 2010, there were 160 business-related “Smartlinks”.
“Smartlinks” have enabled an annual average of 14,850 Web users to connect directly to an enquiries agent from the Web site.
2.2.4 - Completed
The CRA will pilot a joint CD-ROM with the province of British Columbia addressed to small business, in which the contents of the CRA Electronic Services for Business and Individuals CD‑ROM will be expanded to include information from the British Columbia Ministry of Small Business and Revenue.
The CRA Electronic Services for Business and Individuals CD-ROM, including content and links from all provinces and territories, was released in March 2008. 155,000 copies were available for distribution by the CRA, as well as by provincial and territorial governments.
2.2.5 - Completed
We will introduce a training program to ensure that CRA employees who interact with small business taxpayers are knowledgeable about the CRA's electronic products and services for small business.
A multimedia online training course was released to all employees on November 27, 2007.
2.2.6 - Completed
The CRA will continue our efforts to reach out to new small businesses. We will modify our existing outreach activities and local business seminars to ensure that they remain current and relevant. We will continue to increase our visibility in the small business community through outreach activities, community visits, and involvement in trade shows. We will conduct five new pilot projects in Ontario that focus on identifying and contacting new small businesses to help them understand their tax responsibilities and inform them about how to access and use CRA services. The CRA will explore the feasibility of partnering with certain provinces to include trade schools in its outreach activities. Our goal is to have a framework in place by March 2008.
In 2007–2008, the Underground Economy Outreach Program held 149 community visits and expanded the following year to wharf visits, home and trade shows, public speaking engagements, and individual visits.
The five Ontario pilot projects were completed in March 2008. These led to a rigorous program of outreach throughout the Ontario Region including partnering with other levels of government to ensure that small businesses have access to a wide range of information to meet their needs. Best practices and key findings have been incorporated into the Ontario Regional Small Business Plan.
The CRA Atlantic Region initiated a three-year New Registrant Outreach initiative where officers made visits to approximately 50% of new goods and services tax/harmonized sales tax (GST/HST) registrants to provide information about tax filing, payments, reporting, and related matters. A post-initiative study, Measuring the Impact of Outreach Visits on New Business Registrants in the Atlantic Region, showed some minor attitudinal and knowledge differences that could be attributed to the initiative. Two key differences were in the business registrants' perceptions of the CRA's face‑to-face service, and visibility in the community. Registrants who received an in-person visit assessed the CRA more favorably than with those who were not offered or declined a visit.
To ensure better coordination and harmonization of outreach, the Quebec Region developed local action plans for each Tax Services Office (TSO). Seminars were developed for select business sectors, such as the taxi, daycare, and beauty salon sectors.
Many TSOs have also created partnerships with federal and provincial agencies such as the Economic Development Agency of Canada, local development centres, and associations such as the Association de planification fiscale et financière and the Ordre des médecins to inform them of CRA services and electronic products.
The CRA completed the framework for outreach in trade schools in March 2008 in conjunction with the Federal/Provincial/Territorial Underground Economy Working Group. A program is now in place in British Columbia, Ontario, and New Brunswick trade schools to disseminate information to selected construction trades on the tax system and the pitfalls of the underground economy. A Trade Links Web site has also been developed that consolidates tools and resources for people entering trades in the construction sector.
2.2.7 - Completed
The CRA will continue its advertising campaign targeting business taxpayers in 2007-2008.
From January to March 2008, the CRA ran a print and internet advertising campaign aimed at tax professionals and small businesses representatives, many of whom are small businesses as well.
Post-campaign evaluations suggest that those who saw the ads are significantly more likely to think that the CRA is responsive to, and effective in addressing, the needs of business than those who did not see the ads.
The CRA continues to look at low-cost ways to increase business taxpayers' awareness of the electronic services available.
2.2.8 - Completed
The CRA will partner with key small business and professional advisor associations to identify sources of burden and will work with them to leverage our communication and outreach activities.
Sources of burden are regularly discussed, both formally and informally, with small business and professional organizations, including the Canadian Federation of Independent Business, the Canadian Payroll Association, the Canadian Bookkeepers Association, the Certified General Accountants Association, the Canadian Bar Association, and members of the Advisory Committee on Paperwork Burden Reduction.
The CRA continues to rely on these partnerships to better address compliance burden issues by consulting on initiatives, providing input on organizations' surveys, and providing information to distribute to their members.
The CRA has reviewed submissions on burden reduction made to the Department of Finance by small business and professional associations.
CRA representatives attend annual conferences held by the various professional organizations and have been invited to speak to their members.
2.3 Actions planned for April 2008 and beyond
2.3.1 - Completed
We will review the results of our “Smartlinks” program to gain a better understanding of the business user's experience and needs, and improve the content and organization of our Web site accordingly.
When a “Smartlinks” user has spoken with a CRA agent, the user may be surveyed on the clarity of Web site information or navigational difficulties in finding the information needed.
Analysis of each “Smartlink” is scheduled once a year and used not only to adjust the “Smartlinks” placement, but also to improve the content, presentation, and architecture of information on the CRA Web site. Several factors, such as topic complexity, new programs, compliance, relative importance of topics to taxpayers, and recommendations from call centre agents, are considered when determining where to place or remove “Smartlinks”. Web sites are revised or enhanced accordingly based on the analysis and recommendations.
2.3.2 - Completed
We will work with internal and external stakeholders to determine the desirability of implementing “Smartlinks” within the secure Web pages of My Account and My Business Account. This would give taxpayers direct access to a CRA agent from within these secure channels, and allow the agent to respond to questions related to their specific account.
The CRA has implemented “Smartlinks” on the My Business Account service to help taxpayers with their account-specific enquiries.
The feasibility of “Smartlinks” on the My Account service for individuals was analyzed. The analysis, including input from stakeholders, determined that efforts should be concentrated on designing very user-friendly services so that further enquiries would not be necessary. The My Account site continues to offer Helpdesk and general enquiries numbers.
2.3.3 - Completed
In 2008, the CRA will repeat our biennial survey of business users of the CRA Web site. The results will allow the CRA to identify changes in levels of awareness of the CRA's electronic services for business and trends in the use of these services.
The CRA conducted the second Survey of Business Users of the CRA Web site in December 2008.Overall satisfaction with the business pages of the site was widespread and had increased slightly since 2006. A large majority found or completed most or all of what they tried to find or do on the site. This represented a slight increase since 2006.
Consistent with the 2006 Web Site Business User Survey findings, awareness of the site's offerings exceeded its use.
3.1 Actions taken or underway
3.1.1 - Completed
The CRA, in collaboration with internal stakeholders and members of the Action Task Force on Small Business Issues, has developed a Performance Measurement Framework for Compliance Burden. This framework is intended to allow the CRA to measure its progress in burden reduction by analyzing our performance against a range of indicators.
The Performance Measurement Framework, completed in December 2007, provides measures of businesses' cost of compliance in time and money. The framework is built on a combination of measures unique to the burden reduction effort and measures in use at the CRA.
The framework measures were validated and the availability of data confirmed in conjunction with all CRA branches and Industry Canada.
3.1.2 - Completed
The CRA participated in the development of the Statistics Canada Survey of Regulatory Compliance Costs. The initial survey was conducted in late 2006 as part of the federal government's Paperwork Burden Reduction Initiative. The CRA will continue to be involved in this triennial survey.
The CRA provided input to the Statistics Canada 2009 survey and will continue to participate in the triennial surveys.
Data from the Statistics Canada Survey of Regulatory Compliance Costs was used to populate the performance indicators in the CRA's Performance Measurement Framework for Compliance Burden.
3.1.3 - Completed
The CRA will review the reduction initiatives of other countries or other levels of government in order to identify potential CRA strategies.
The CRA continues to monitor the burden reduction activities of other countries. CRA officials have met with tax officials from the United States, Australia, the United Kingdom, and New Zealand to examine best practices in electronic services and burden reduction. The CRA contributed to a report by the Taxpayer Services Sub-Group, Organization for Economic Co-operation and Development (OECD), called Programs to Reduce the Administrative Burden of Tax Regulation in Selected Countries, published in January 2008.
The CRA has joined the Community of Federal Regulators to learn and benefit from the regulatory community.
3.1.4 - Completed
The CRA will continue to conduct research and review the findings of various small business studies to better understand the characteristics, behaviour, and needs of small business taxpayers. The CRA will validate our research results by comparing them against external sources such as studies conducted by other federal departments and external groups such as, the Canadian Federation of Independent Business, the Conference Board of Canada, and the Canadian Payroll Association.
The CRA's knowledge of issues affecting small business has been built and will continue to be expanded through its own research as well as studying findings from external sources.
Studies and surveys conducted by external organizations continue to be reviewed as a means to understanding the needs of small business. As well, the CRA meets regularly with external groups representing small businesses to discuss potential means of addressing the irritants of business taxpayers.
The CRA has conducted the following research particular to small business:
- Web Site Business User Survey to track business users' awareness of, use of, and satisfaction with, offerings for business on the CRA Web site (2008);
- gathering input on existing designs and potential service enhancements to the My Business Account portal and future service options for CRA electronic payroll services in conjunction with the CPA (2008);
- testing of the new login process for certain CRA applications (2009);
- Measuring the Impact of Outreach Visits on New Business Registrants in the Atlantic Region to understand if there are quantifiable attitudinal and knowledge differences between visited and non-visited new business registrants vis-à-vis tax filing, payments, reporting, and related compliance matters;
- validating the online tools and information offered by the Represent a Client service for third-party representatives (2009);
- a Case Study on Small Business to simulate typical interactions and activities with the CRA by sole proprietorships, partnerships, and corporations in order to model regular business dealings with the CRA (2009 and 2010);
- My Business Account Online Survey to determine user satisfaction with the portal's existing services, possible improvements and services, and what attracted users to register for, and use, the portal (2010); and
- My Business Account Outreach Initiative conducted in the Atlantic Region to determine the impact of both direct communication methods and the time since using those methods on the number of registrations to My Business Account (2009 and 2010).
3.2 Actions planned for 2007–2008
3.2.1 - Completed
In light of the federal government's commitment to reduce the paperwork burden by 20 per cent, the CRA will establish an inventory of its administrative requirements and information obligations with which small businesses must comply.
An inventory of administrative requirements and information obligations was provided to Industry Canada in September 2007.
The CRA identified over 36,000 reporting obligations.
3.2.2 - Completed
The CRA will finalize its Performance Measurement Framework for Compliance Burden Reduction and confirm the performance measures that will be used to establish benchmarks.
The Performance Measurement Framework for Compliance Burden Reduction was finalized in December 2007.
Benchmarks have been determined and Measuring the Small Businesses Compliance Burden – Benchmark Report was released in June 2009 and is available on the CRA Web site.
3.2.3 - Completed
The CRA will ensure that compliance burden reduction becomes a fundamental element of its forms review process and in the development of its administrative procedures. This could include creating a Burden Assessment Checklist that would be used when CRA business forms are introduced or revised.
Burden reduction considerations have been incorporated into forms' reviews.
A quality assurance process, focusing on compliance burden reduction, among other things, was developed. The process includes spot checks on certain features and content, a database of common and consistent text, consistent location and presentation of common elements on forms, and checklists for form revision and development. The CRA's focus on these areas will result in easier-to-complete forms.
The CRA has made burden reduction systemic. In place are practices such as a mandatory front-end burden impact analysis in the Resource and Investment Management Committee submission process for all major investment projects; assessing burden impact during the internal audit and program evaluation functions; incorporating a burden reduction commitment into appropriate executive performance agreements; educating and increasing awareness of burden reduction among all employees; and engaging the public with mechanisms to make suggestions related to burden reduction.
3.3 Actions planned for April 2008 and beyond
3.3.1 - Completed
We will measure and report on our progress in reducing the compliance and paperwork burden in our annual report to Parliament.
The CRA included the first elements of progress in reducing the compliance and paperwork burden reduction in its Annual Report to Parliament for 2007–2008. In the following year, the CRA reported that 31 of the action items identified by the Action Task Force on Small Business Issues were completed, as we continued to improve our programs and services to provide more options for businesses and ease the compliance burden.
At that time, the CRA committed to Parliament that the Performance Measurement Framework for Compliance Burden Reduction, measuring compliance costs in terms of time and money, would be used to report future progress on burden reduction.
Under this framework, a baseline was created for measuring the compliance costs and published in the Measuring the Small Business Compliance Burden – Benchmark Report in June 2009, which is available on the CRA Web site.
The Statistics Canada Survey of Regulatory Compliance Costs, 2008, released in July 2010, shows that overall, the average annual cost per establishment to comply with legislated requirements decreased by 5.5%, from $1825.39 in 2005 to $1724.10 in 2008. Contributing to the overall reduction were cost decreases in complying with requirements related to payroll remittances, T4 summaries and slips, federal and provincial sales taxes, and corporation tax instalments.
The CRA will measure and report its progress against the baseline on a triennial basis, following the Statistics Canada triennial surveys.
3.3.2 - Completed
We will contribute to the federal government's target of reducing the paperwork burden by 20 per cent by November 2008.
The CRA identified over 36,000 reporting obligations and subsequently eliminated over 9,000 of them through reducing information requests on income tax forms and reducing the required filing frequencies for excise-related returns.
These efforts achieved a 24.2% reduction in paperwork burden in forms and administrative policies.
3.3.3 - Completed
We will validate our performance indicators and refine these, as necessary.
As a result of the validation exercise undertaken in conjunction with the preparation of the Benchmark Report, the CRA has, and will continue to, update, the measurement framework as required. This allows refining of the Performance Measurement Framework for Compliance Burden and aligning with the CRA's Strategic Planning and Reporting Framework.
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