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Section I: Agency Overview

1.1 Message from the Minister


Photo of the honourable Jean-Pierre Blackburn, Minister of National Revenue

The Canada Revenue Agency (CRA) touches the lives of every Canadian, not only by collecting taxes, but by administering benefit programs on behalf of federal, provincial, and territorial governments. We are the single largest funding source for government programs and services. Our performance as an organization is key to maintaining the high levels of confidence in the government, its programs and services, and ensures that individuals and businesses are able to meet their obligations.

As a demonstration of our commitment to service and accountability, in 2007-2008 the CRA introduced the Taxpayer Bill of Rights, a service complaints process, and Canada's first Taxpayers' Ombudsman has been appointed to respond to service concerns from the public. These steps will help maintain the high level of confidence that Canadians have in the CRA.

We made rogress in actioning commitments to reduce the compliance burden for small and medium sized business, as identified in the Report of the Canada Revenue Agency's Task Force on Small Business Issues, published in April 2007. The CRA is committed to implementing all of the initiatives identified in this report and sustaining the focus on burden reduction in the years to come.

As Minister of National Revenue, I am proud of what we have accomplished over the past year to improve the social and economic well-being of Canadians, and I am confident that we will continue with our high level of service, accountability, and compliance in order to protect Canada's revenue base.

It is my privilege and honour to table the Departmental Performance Report 2007-2008 for the Canada Revenue Agency.

The Honourable Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue

1.2 Message from the Commissioner


Photo of William V. Baker, the Commissioner and Chief Executive Officer of Canada Revenue Agency.

The Canada Revenue Agency (CRA) is a national organization that has extensive contact with Canadian citizens and businesses. In 2007-2008, we continued to take full advantage of our legislative flexibility in order to deliver efficient programs and services and pursue partnership opportunities that result in overall savings to the public purse.

As Commissioner and Chief Executive Officer, I am accountable to the Minister of National Revenue for all program matters, and to our Board of Management for administrative matters. I am proud to report that we have once again demonstrated our capacity to achieve meaningful and measurable results for Canadians.

We finalized implementation of the Corporate Tax Administration for Ontario initiative, which will lead to a simpler and more efficient corporate tax system for businesses. We also continued to make progress in actioning commitments to reduce the compliance burden for small and medium sized business, as identified in the Report of the Canada Revenue Agency's Task Force on Small Business Issues, published in April 2007.

We maintained our focus on areas that have high rates of non-compliance, such as the underground economy, aggressive tax planning, and Goods and Services Tax/Harmonized Sales Tax (GST/HST). We have increased our audit work to counter aggressive tax planning and we conducted several specific pilot projects aimed at uncovering GST/HST fraud. In addition to the steps we are taking in the area of compliance, we are also improving service to make it simpler and easier for individuals and businesses to meet their tax obligations. In 2007-2008, we improved our electronic service offerings that allow us to more effectively deliver services, increase overall accessibility of tax information and provide more options for Canadians to interact with us.

In May of 2007, we introduced our new formalized service complaints resolution process that will provide individuals, businesses and benefit recipients an additional level of confidence in the way we handle service-related complaints. Concurrently, our Minister announced the new Taxpayer Bill of Rights and the creation of the Taxpayers' Ombudsman. We remain committed to providing taxpayers the means by which they can be heard and have their issues resolved. Our new service complaints resolution process will strengthen our ability to respond to service-related issues.

Our reputation as a world class tax administration is well earned and we are proud of our accomplishments over the past year. As we move forward, I remain confident in the dedication, knowledge and professionalism of our employees to deliver quality results that matter to Canadians.

 

William V. Baker
Commissioner and Chief Executive Officer
Canada Revenue Agency

1.3 Management's Representation Statement

I submit for tabling in Parliament, the 2007–2008 Departmental Performance Report for Canada Revenue Agency.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007–2008 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

  • It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;
  • It is based on the department's approved Strategic Outcome(s) and Program Activity Architecture that were approved by the Treasury Board;
  • It presents consistent, comprehensive, balanced and reliable information;
  • It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
  • It reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.

 

William V. Baker
Commissioner and Chief Executive Officer
Canada Revenue Agency

xx November 2008

1.4 Rating our Results

The CRA's mission is mirrored in its two tax strategic outcomes:

  • Taxpayers meet their obligations and Canada's revenue base is protected; and
  • Eligible families and individuals receive timely and correct benefit payments.

This Performance Report assesses the extent to which we achieved these outcomes during the 2007-2008 fiscal year. On balance, our results show that we met both our strategic outcomes.

As the principal tax administrator for the Government of Canada, our primary responsibility is to protect Canada's revenue base. In 2007-2008, we collected almost $372 billion on behalf of the Government of Canada, the provinces (except Quebec), the territories, and certain First Nations governments.

Our Tax Services strategic outcome measures gauge taxpayers' behaviour in meeting their tax obligations. In 2007-2008, the majority of Canadian individuals, businesses, and employers continued to meet their filing obligations. The percentage of taxable incorporated businesses that filed on time, however, continued its slight downward decline from 86.4% to 85.8%. We cannot provide filing compliance information on GST/HST returns at this time as comprehensive data from our GST/HST systems is not available.

Our remittance compliance measures reflect the degree to which taxpayers paid all taxes owed on or prior to their payment deadline. Remittance compliance by individuals continued to be high, while the number of employers who forwarded at-source deductions improved by over a percentage point from last year to 89.2%, reversing the slight downward trend of the past few years in this segment. Timely remittance compliance by corporations, however, continues to need improvement.

Macro-indicators related to reporting compliance indicate that, on the whole, income reported to the CRA tracks favourably against external and internal benchmarks, contributing to our assessment that the majority of taxpayers report complete and accurate information on their tax returns.

Our Tax Services strategic outcome measures, along with our overall positive performance against our expected results, lend support to our assessment that we promoted compliance with taxpayer obligations and that Canada's revenue base was protected.

In addition to our role as tax administrator, we are the delivery agent for various income-based benefits, credits, and other services that contribute directly to the economic and social well-being of Canadians. In 2007-2008, we issued 99.99% of these payments on time. We also leveraged our infrastructure to administer additional benefits, one-time payment programs, and other services on behalf of provinces, territories, and other federal departments. The results we achieved in 2007-2008 allow us to conclude that we met our benefit strategic outcome – namely, that eligible families and individuals receive timely and correct benefit payments.

The CRA is empowered with a unique governance regime that designates distinct responsibilities and accountabilities to our Minister, Board of Management, and Commissioner. In 2007-2008, the Treasury Board of Canada Secretariat's (TBS) assessment of the CRA's management performance (by means of their Management Accountability Framework) produced positive results. To complement the TBS framework and to support the Board in its oversight responsibilities, the Board of Management Oversight Framework was developed in 2007-2008 and the results were positive. The results of these two assessments provide Canadians with the assurance that management excellence is being achieved in the CRA.

Our rating approach

We use qualitative and quantitative indicators to determine the results we achieved in terms of our strategic outcomes and expected results. Survey results, statistical sampling, and operational data support our assessments.

We also rate our strategic results and those of our program activities in terms of whether the targets identified in our Corporate Business Plan 2007-2008 to 2009-2010 were met, mostly met, or not met. The “Results Rating” table below defines these terms.

Results Ratings


Rating
Results
Met
Our results met or exceeded our expectations.
Mostly met
While the results met most of our expectations, some gaps exist.
Not met
Significant gaps exist in results and most or key expectations were not met.

In conjunction with the performance results ratings, we also assign each indicator a data quality rating. For additional information on our Data Quality Ratings, see Section IV: Other Items of Interest.

1.4.1 Our Program Activity Architecture

The Program Activity Architecture depicted below, identifies our program activities (PAs) and demonstrates how they link to our strategic outcomes. This framework is based on the Management, Resources and Results Structure established by the Treasury Board of Canada Secretariat on April 1, 2005.

Program activities are groups of related activities that are designed and managed to meet a specific public need, and that are often treated as a budgetary unit. Each program activity is articulated to reflect how we allocate and manage our resources in order to achieve intended results.


Program Activity Architecture for the Canada Revenue Agency

1.5 Summary Information

1.5.1 Agency Mandate

The Canada Revenue Agency (CRA) has the mandate to administer tax, benefit and other programs on behalf of the Government of Canada and provincial, territorial and First Nations governments.

Parliament created the CRA so we could meet the mandate by:

  • providing better service to Canadians;
  • offering more efficient and more effective delivery of government programs; and
  • fostering closer relationships with provinces and other levels of government for which the CRA delivers programs, and providing better accountability.

The CRA's mandate reflects the broad role that the Agency plays in the lives of Canadians. The CRA contributes to two of the Government of Canada's Strategic Outcomes: Federal organizations that support all Government of Canada outcomes and Income Security and Employment for Canadians.

1.5.2 Financial Resources


 
2007-2008
 
(thousands of dollars)
 
Planned Spending
Total Authorities
Actual Spending
Strategic Outcome: Taxpayers meet their obligations and Canada's revenue base is protected
Client Assistance (PA1)
296,711
1,007,143
985,885
Assessment of Returns and Payment Processing (PA2)
839,892
911,122
871,315
Filing and Remittance Compliance (PA3)
662,292
713,143
695,321
Reporting Compliance (PA4)
1,195,958
1,380,228
1,333,748
Appeals (PA5)
149,545
163,387
156,127
Strategic Outcome: Eligible families and individuals receive timely and correct benefit payments
Benefit Programs (PA6)
335,779
385,140
380,563
Total Spending[Footnote 1] 
3,480,177
4,560,163
4,422,959

[Footnote 1] Corporate Services planned spending, total authorities, and actual spending have been attributed to the six program activities under the two strategic outcomes.

1.5.3 Human Resources


 
2007-2008
Full Time Equivalents (FTE)
Planned
Actual[Footnote 1] 
Difference
 
38,756
38,356
400

[Footnote 1] Full-time equivalent (FTE) totals by program activity can be found at the end of the performance discussion for each PA section.

The “Agency Priorities” table identifies the strategic objectives of the CRA. These objectives are discussed in the section 1.5.6 on Page entitled “Summary of Agency Performance”. Additional details concerning sub-activity achievements related to these strategic objectives are provided in Section II: Analysis of Program Activities by Strategic Outcome, beginning on Page.

1.5.4 Agency Priorities


Name
Type
Performance Status
1. Enhance service delivery for Canadians
Ongoing
Successfully Met
2. Address specific compliance challenges
Ongoing
Successfully Met
3. Enhance trust in Canada's tax administration by formalizing the process for resolving service-related complaints
Previously committed to
Successfully Met
4. Ensure timely benefit payments
Ongoing
Successfully Met
5. Ensure accurate benefit payments and strengthening compliance
Ongoing
Successfully Met
6. Ensure that the CRA is a key service provider
Ongoing
Successfully Met

1.5.5 Program Activities by Strategic Outcome


 
 
 
2007-2008
 
Program Activities
Expected Results
Performance Status
Planned Spending
Actual Spending
Contributes to the following priority
Strategic Outcome: Taxpayers meet their obligations and Canada's revenue base is protected
PA1 (Taxpayer and business assistance)
Taxpayers, businesses, and registrants receive timely, accurate, and accessible information
Successfully Met
296,711
989,885
Enhance service delivery for Canadians
PA2 (Assessment of Returns and Payment Processing)
Assessment and payment processing are timely and accurate
Successfully Met
839,892
871,315
Enhance service delivery for Canadians
Reporting non-compliance is detected and addressed
Successfully Met
 
 
Enhance service delivery for Canadians
PA3 (Accounts Receivables and Returns Compliance)
Tax and non-tax debt are resolved on a timely basis and are within targeted levels
Successfully Met
662,292
695,321
Address specific compliance challenges
PA4 (Reporting Compliance)
Reporting non-compliance is detected and addressed
Successfully Met
1,195,958
1,333,748
Address specific compliance challenges
PA 5 (Appeals)
Taxpayers receive an impartial and timely review of contested decisions
Successfully Met
149,545
156,127
Enhance trust in Canada's tax administration by formalizing the process for resolving service–related complaints
Strategic Outcome: Eligible Families and Individuals receive timely and correct benefit payments
PA6 (Benefit Programs)
Benefit recipients receive timely, accurate, and accessible information
Successfully Met
335,779
380,563
Ensure timely benefit payments
PA6 (Benefit Programs)
Eligibility determination and payment processing are timely and accurate
Successfully Met
Ensure accurate benefit payments and strengthening compliance
PA6 (Benefit Programs)
Provinces, territories, and other government departments rely on the CRA as a key service provider
Successfully Met
Ensure that the CRA is a key service provider

1.5.6 Summary of Agency Performance

Overall Performance: Tax Services Strategic Outcome

Taxpayers meet their obligations and Canada's revenue base is protected

Virtually all public goods and services that enhance the quality of life of Canadians are funded by taxes. As Canada's principal tax administrator, the CRA plays a pivotal role in ensuring that Canada's revenue base is protected.

Canada's tax system is based on voluntary compliance and self-assessment, which, we believe, is the most cost-effective way to administer taxes. Taxpayers are expected to determine their own liability under the law and then pay the correct amount of tax, without our intervention. This means that taxpayers are required to do the following:

  • register as required under the law (for example, for the GST);
  • file returns on time;
  • report complete and accurate information to determine tax liability; and
  • pay all amounts when due.

Non-compliance is the failure, for whatever reason, to meet any of these requirements.

People find it easier to participate in Canada's tax regime when the system is accessible, service is timely, and tax information is accurate. In turn, this promotes voluntary compliance and helps prevent compliant taxpayers from slipping into unintentional non-compliance. Our service improvement initiatives are intended to enable Canadians to self-assess and file their tax returns easily.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Enhance service delivery for Canadians.

Achievement: In 2007-2008, we delivered the following:

  • additional electronic self-service options, plus new services on our Web channel; and
  • a measurement framework to assess our progress toward the reduction in the compliance burden for small businesses.

Over the past fiscal year, the CRA continued its focus on non-compliance that threatens to erode Canada's revenue base. This included areas in which our 2004 Compliance Review identified as key priority risk areas. As indicated in our Corporate Business Plan 2007-2008 to 2009-2010, these areas are aggressive tax planning, the underground economy (UE), GST/HST high-risk compliance, non-filers/non-registrants, and remittance non-compliance (collections).

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Address specific compliance challenges.

Achievement: In 2007-2008, we:

  • identified a nearly 30% decline in participation in gifting tax shelters, the focus of aggressive tax planning work this past year;
  • shared best practices on the UE with our international partners;
  • undertook several pilot projects related to GST/HST high risk compliance;
  • initiated a study to better understand the non-filer population; and
  • undertook key debt management studies related to the individual taxpayer population.

The CRA is committed to administering a tax system that is fair and just. Consequently, when taxpayers disagree with us, we provide them with the opportunity for redress. The availability of such a dispute resolution process is central in safeguarding taxpayers' trust and confidence in the integrity of Canada's tax regime. We provide taxpayers with avenues for resolution when differences arise regarding tax liability or if there are complaints regarding our services.

In addition, legislated taxpayer relief provisions have permitted the CRA, in certain situations, to be more flexible and responsive to taxpayers' circumstances when it would be unreasonable or unfair to penalize them. Our aim is to ensure that all taxpayers have access to timely and impartial redress, as discussed in our section on Appeals (see PA5 on Page).

On May 28, 2007, the Minister of National Revenue announced two new redress initiatives, a Taxpayer Bill of Rights and a Taxpayers' Ombudsman. We take every opportunity possible to inform taxpayers of their rights and we are committed to responding promptly to enquiries from the office of the Taxpayers' Ombudsman.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Enhance trust in Canada's tax administration by formalizing the process for resolving service-related complaints.

Achievement: In 2007-2008, we implemented the CRA Service Complaints program, employing a new horizontal process for tracking and managing service-related complaints.

Our Service Complaints program has begun to help us identify problems and propose solutions, while upholding the eight service rights outlined in the Taxpayer Bill of Rights.

We believe that such improvements to Canada's tax redress regime increases taxpayers' confidence in the CRA's tax administration and enhances our capacity to protect Canada's revenue base, which is a benefit to all Canadians.

Our strategic outcome measures

We use our strategic outcome measures to gauge the compliance behaviour of Canadian taxpayers. Using data from internal and external sources as a baseline of compliance information, we group these indicators into the following four broad categories of taxpayer obligations to help us measure and assess our results against our Tax Services strategic outcome.

  • Registration Compliance estimates the proportion of Canadian businesses that have registered as required by law to collect the GST/HST.
  • Filing Compliance indicators estimate the proportion of the Canadian population who file their returns on time.
  • Reporting Compliance indicators contribute to our assessment of the degree to which taxpayers report complete and accurate information.
  • Remittance Compliance indicators estimate the proportion of taxpayers who owed taxes and paid the full amount on time.

To facilitate further analysis of compliance behaviour, we partition the Canadian taxpayer population into the following types: individuals, self-employed individuals, corporations, GST/HST registrants, and employers. Also included are macro-indicators, which we use to evaluate reporting compliance trends.

Our strategic outcome measures are currently undergoing a review in order to enhance our ability to report against our strategic outcome.

Our Tax Services Strategic Outcome Measures

Our Measure: Registration compliance – Rates of registration for the GST/HST

 
Performance Rating
Data
Quality
2007-2008
Not Applicable
Not Applicable
2006-2007
Met
Good

 


Our Indicator
Current Target
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Canadian businesses that were registered for the GST/HST
90%
86.6%
88.8%
89.5%
93.0%
Not Available
Not Applicable

Our Measure: Filing compliance – Rates of filing on time without direct intervention by the CRA

 
Performance Rating
Data
Quality
2007-2008
Met
Good
2006-2007
Met
Good

 


Our Indicators
Current Target
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Individuals who filed a timely return
90%
92.6%
92.6%
92.8%
93.0%
92.5%
Met
Corporations – taxable incorporated businesses that filed their returns on time
90%
87.1%
86.0%
86.4%[Footnote 1] 
86.4%
85.8%
Mostly Met
Businesses that filed their GST/HST returns on time
90%
92.0%
92.6%
91.8%
91.4%
Not Available
Not Applicable
Employers who filed their T4 returns on time
90%
96.5%
94.5%
94.5%
96.0%
95.5%
Met

[Footnote 1] This filing rate has been restated.
Our Measure: Reporting compliance

 
Performance Rating
Data
Quality
2007-2008
Met
Good
2006-2007
Met
Good

 


Our Indicators[Footnote 1] 
Current Target
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Trend in growth in personal income reported to the CRA compared with personal income estimated by Statistics Canada
Tracks favourably
Yes
Yes
Yes
Yes
Met
Trend in growth in net GST collected compared with retail sales and personal expenditures
Tracks favourably
Yes
Yes
Yes
Yes
Met
Trend in corporate income tax assessed by the CRA relative to corporate profits before tax estimated by Statistics Canada
Tracks favourably
Yes
Yes
Yes
Yes
Met
Trend in net income of unincorporated businesses reported to the CRA relative to net income of unincorporated businesses per Statistics Canada National Accounts estimates
Tracks favourably
Yes
Yes
Yes
Yes
Met
Non-Compliance Rate Estimates
 
 
 
 
 
 
Key tax credits and deductions not subject to third-party reporting – individuals
Downward trend
13.9%
15.5%
14.7%
14.8%
Not Met
Random Audits – Small and Medium Unincorporated Business Filers[Footnote 2] 
Downward trend
Not Applicable
Not Applicable
Not Applicable
14.6%
Not Applicable

[Footnote 1] Our assessments against some indicators are based on the latest available data.
[Footnote 2] Our Core Audit Program selects, in multi-year intervals, random samples of tax files from different segments of the SME population. The years in which these results are reported are presented. The rates in the present table are for non-compliance greater than $5,000 in net federal tax. Unincorporated business filers include the following: farming, professional, business, fishing, and large rentals (> $125,000).
Our Measure: Remittance compliance – Rate of timely payments without direct intervention by the CRA

 
Performance Rating
Data
Quality
2007-2008
Not Met
Good
2006-2007
Not Met
Good

 


Our Indicators
Current Target
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Individuals who paid their reported taxes on time
90%
94.3%
93.2%
93.1%
94.3%
93.2%
Met
Taxable corporations that paid their reported taxes on time
90%
91.0%
90.7%
88.7%
85.4%
84.9%
Not Met
Businesses that collected GST/HST[Footnote 1] 
Not Applicable
2.6 million collected $44 billion
2.7 million collected $47 billion
2.8 million collected $52 billion
3 million collected $50 billion
Not Available
Not Applicable
Employers who forwarded at-source deductions on behalf of their employees on time
90%
90.5%
89.2%
88.7%
87.7%
89.2%
Mostly Met
Trend in ratio of outstanding tax debt to gross cash receipts
Not Applicable
5.54%
5.43%
5.62%
5.79%
6.23%
Not Applicable

[Footnote 1] Businesses based in Quebec register with the Ministre du Revenu du Qubec, which administers GST on behalf of the CRA and remits the net amount due to the CRA.
Conclusion

Our measure of taxpayers' filing compliance indicates that filing compliance with Canada's tax laws continued to be high in 2007-2008. While we do not have a registration compliance rate for 2007-2008, trend data for registration compliance over the past number of years, coupled with the results from our Non-Registrant area, provides us with a sufficient level of confidence that there remains a high level of registration compliance by Canadian businesses. Our estimates of non-compliance in reporting for 2007-2008, which provide the foundation for our overall assessment, indicate that, for the majority of Canadians, the incidence and magnitude of this non-compliance is relatively low, though financially significant. Although we recognize that improvements continue to be needed in the area of remittance compliance, we believe that our debt management research will help to inform our future strategies implemented through our IRC project, to manage our tax debt inventory, and to promote remittance compliance.

Given these results, it is our assessment that, overall, taxpayers meet their obligations and Canada's revenue base is protected.

Overall Performance: Benefit Programs Strategic Outcome

Eligible families and individuals receive timely and correct benefit payments

Each year we provide benefits, credits, and other related services that assist families and children, low-and moderate-income households, and persons with disabilities. The flexibility of our core systems allows us to administer and deliver programs on behalf of federal, provincial, and territorial governments.

We ensure that benefit recipients have access to timely and accurate information products and responses to their telephone enquiries.

We also provide data exchange and data transfer services to an increasing number of government clients. These services support other federal government departments as well as Canada's provinces and territories to simplify the administration of their income-tested benefit and payment programs.

We believe, when individuals fully understand what they need to do to meet eligibility requirements, that they will comply with benefit obligations. Consequently, we provide benefit recipients with information, tools, and services that are accessible through a variety of channels: our telephone service, proactive outreach efforts, and Web sites that provide information and allow benefit recipients to do transactions online.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Enhance electronic services.

Achievement: In 2007-2008, we successfully added new features to My Account and implemented an online child benefits application facility.

During 2007-2008, the number of visits to our Web site pages increased, as it has in past years. The positive reception of our new online service—Apply for child benefits—as evidenced by the high take-up rate, supports our assertion that the use of electronic services aids in the efficient and effective delivery of our programs and services.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Ensure timely benefit payments.

Achievement: In 2007-2008, we issued more than 88.5 million payments, 99.99% of which were on-time.

To ensure a high compliance rate among benefit recipients, we are systematically implementing elements of a long-term benefits-specific compliance strategy, which is based on education, facilitated compliance, and the maintenance of a credible enforcement presence.

Our activities in validation and controls are wide ranging in scope. We validate marital status, children in care, addresses, and income information to maintain the integrity of benefit and credit programs. The information provided to recipients during validation reviews helps to inform and educate individuals about their eligibility and entitlement requirements. Although overall compliance is high, we continue to identify and address areas of concern.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Ensure accurate benefit payments and strengthening compliance.

Achievement: In 2007-2008, we began developing benchmarks for GST/HST credit recipients, enabling future assessment of compliance trends.

To enable future assessment of compliance trends, benchmarks are established through specific validation projects. The consistent review and comparison with the base data allows timely recognition of changes and the prompt introduction of strategies, as required, to address them.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Maximize the capacity of CRA to deliver services.

Achievement: In 2007-2008, we successfully increased the number of programs and services that we delivered on behalf of other government clients from 72 to 77, which increased our contribution to government economic efficiency.

Strategic outcome measures

We measure our progress toward accomplishing our strategic outcome with three major indicators: payment timeliness, payment accuracy, and the number of services delivered on behalf of federal, provincial, and territorial governments.

Our Benefit Programs Strategic Outcome Measures


 
Performance Rating
Data
Quality
2007-2008
Met
Good
2006-2007
Met
Good

Payment Timeliness


Our Indicator
Current Target
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Benefit recipients receive payments on time
99%
99.9%
99.8%
99.9%
99.99%
99.99%
Met

Benefit Payments are Correct


Our Indicator
Current Target
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Canada Child Tax Benefit recipients provide complete and accurate information and receive the proper entitlement
95%
95.5%
93.2%
95.1%
95.5%
95.5%
Met

Provinces, Territories and Other Government Departments Rely on the CRA as a Key Service Provider


Our Indicator
Current Target
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
Rating
Number of programs and services administered
Upward trend
51
58
67
72
77
Met

Conclusion

Our administration and delivery of timely and accurate benefit programs and services provides a key service to Canadians each year. Our work as a national agency benefits both our government clients and the citizens they serve: governments enjoy lower administration costs and more effective compliance; citizens receive more comprehensive and better-integrated benefits and services that are simpler for them to use.

For supplementary information on the Agency's performance, please visit:
http://www.cra-arc.gc.ca/gncy/nnnl/menu-eng.html

1.5.7 Management Results

To ensure that the CRA's tax and benefit services have the guidance, infrastructure, and resources needed for successful delivery, our interrelated human resources, information technology, and other management strategies must be fully integrated. During 2007-2008, we made key investments in our infrastructure to enhance our effectiveness. We were also active in modernizing our service delivery to take advantage of emerging technology while continuing to develop a knowledgeable, professional, and values-driven workforce.

Management oversight

The CRA is empowered with a unique governance regime that designates distinct responsibilities and accountabilities to our Minister, Board of Management, and Commissioner/Chief Executive Officer. In 2007-2008, our management performance was assessed through two means: the Management Accountability Framework (MAF) assessment conducted by the Treasury Board of Canada Secretariat (TBS), and the Board of Management Oversight Framework (BoMOF) assessment conducted by the Board. These two separate assessments ensured that several indicators falling under the legislated authorities of the Board, and not assessed by TBS, were addressed.

The 2007-2008 TBS MAF assessment contained positive results. Of the eleven indicators against which the CRA was assessed, we received three “strong” ratings and eight “acceptable” ratings. Although the CRA was found to be at or above the federal public sector norm for all of the indicators against which we were assessed, TBS identified two areas in which we could strengthen management practices: our corporate performance framework, and financial management and control. We are committed to addressing these areas in the coming year.

To complement the TBS framework and to support the Board in the exercise of its oversight responsibilities, the Board and our senior management developed, during 2007-2008, a BoMOF.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Pilot the Board of Management Oversight Framework.

Achievement: In 2007-2008, the CRA Board of Management undertook its first assessment using the BoMOF.

Results from the first BoMOF assessment were very positive. Of the 19 indicators against which we were assessed, the CRA received 15 “strong” ratings and four “acceptable” ratings.

The results of these assessments provide Canadians with assurance that management excellence is being promoted in the CRA.

The management of risk

The effective management of risk provides many benefits to an organization, including:

  • more rigorous support of strategic planning and performance management;
  • better outcomes in effectiveness and efficiency;
  • greater openness and transparency in decision making and in the conducting of business; and
  • better preparedness for initiatives such as reviews, evaluations, and audits.

As an important element in both the MAF and BoMOF assessments, TBS and the Board each consider risk management to be key to the sound overall administration of the CRA. In March 2006, our Enterprise Risk Management Policy was established to ensure risk management is applied in a consistent and systematic manner at the corporate, operational, and project levels.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: To complete an integrated agency-wide corporate risk inventory.

Achievement: In 2007-2008, we created the CRA Corporate Risk Inventory 2007, which includes the identification, analysis, and evaluation of our top risks.

Our Corporate Risk Inventory 2007, which is a snapshot of the CRA's risk status, was one of the sources used in establishing our 2007-2010 Corporate Audit and Evaluation Plan. The CRA Corporate Risk Inventory 2007 was also a key tool used by senior management during its 2007-2008 strategic planning deliberations and related decision-making.

To address the risks identified in this inventory, our senior executives developed the CRA Risk Action Plan – Agency Top Risks, which identified strategies for addressing our top risks.

Two of these top risks—non-compliance with tax legislation and growth in debt—are discussed in the CRA Annual Report to Parliament: http://www.cra-arc.gc.ca/gncy/nnnl/menu-eng.html. Results achieved in 2007-2008 related to our top information technology risks are discussed below.

Information technology responsiveness and sustainability

The CRA collects and processes large amounts of data. Our information technology infrastructure must support the achievement of our strategic outcomes, the confidentiality of taxpayer information, and meet Canadians' expectations for electronic services.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: To make strategic investments in technology systems.

Achievement: In 2007-2008, we made the following key technology investments:

  • Security Modernization Program initiatives;
  • Data Centre upgrades;
  • Network Services Enhancement Project;
  • Server Consolidation Project; and
  • Business Intelligence Decision Support/Agency Data Warehouse project.

Our information technology infrastructure is currently housed in data centres, where we maintain all critical tax and benefits data, applications, and electronic services delivered by the CRA to Canadians. Our national network and distributed technology infrastructure connects all sites and supports our workforce. During 2007-2008, the following steps were taken to ensure our primary service channels are secure and reflect the high standards of the Government of Canada:

  • we partnered with Public Works and Government Services Canada on plans for a new shared data centre facility;
  • our Data Centre Recoverability project was completed, thereby positioning us to meet our established goals of resuming critical business operations within 72 hours (Recovery Time Objective) and only losing up to 24 hours of data (Recovery Point Objective) in the event of the physical loss of a data centre;
  • we completed upgrades to the electrical power system at one of our data centres to ensure a loss of power would not disrupt our ongoing business; and
  • we also contributed to the greening of IT by adding filters to our generator exhaust systems at one data centre, significantly reducing carbon monoxide emissions.

In addition, to enable us to maintain our capacity to meet the expectations of Canadians, we put in place a strategy to assess our software and to identify those applications that are not sustainable for the long-term. Steps such as these are critical to ensuring that we meet our current and future compliance and service delivery needs in a timely and effective manner.

Maintaining trust

The confidence Canadians have in the CRA's integrity is fundamental to our success in administering tax and benefit programs. Since 2000, we have conducted an annual survey to assess Canadians views towards the CRA and their satisfaction with specific program aspects. Our 2007 Annual Corporate Survey reveals that we have been successful over the past year in maintaining a positive public image. The number of Canadians that rate our overall performance as “excellent” or “good” has increased three percentage points over 2006. Canadians' satisfaction with their most recent service experience, however, has marginally decreased. As in past years, negative attitudes continue to be linked to general perceptions about the CRA, about the federal government as a whole, and about taxation in general, rather than to any specific service-related difficulties encountered.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: To build and implement a branding strategy aligned with CRA's future direction.

Achievement: In 2007-2008, we promoted our brand 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.

We began to implement our branding strategy along a number of fronts: raising employee awareness; introducing a consistent visual identity for the organization; and developing an internal governance structure to further implementation efforts.

The Federal Accountability Action Plan brought forward thirteen specific measures to help strengthen accountability and increase transparency and oversight in government operations. Consequently, we developed a three-year Chief Executive Officer (CEO)/Chief Financial Officer (CFO) certification process during 2007-2008 that involves the identification, documentation, and testing of internal controls. The information generated will allow our CEO or CFO to answer specific Parliamentary questions related to the management of the CRA, such as the effectiveness of our internal controls.

We also continued to build our capacity for assessing and reporting on internal controls over financial reporting. In this regard, we released the first Report on the CRA's Controls relating to the Corporation Income Tax Program. This report provides assurance to provincial and territorial governments of the reliability of CRA's financial reporting.

Pursuant to our 2006 Project Management Policy, we took steps to demonstrate to the Board and to TBS that all CRA projects are consistently managed according to basic principles.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Improve oversight framework.

Achievement: In 2007-2008, we developed a reporting framework for the Board of Management, entitled the Capital Investment Project Portfolio.

Our Capital Investment Project Management reporting process was created to provide the Board with quarterly reports on major project delivery performance, including scheduling, cost, and scope. This provides assurance that risks have been identified and appropriate mitigation strategies have been applied to safeguard the CRA's assets and reputation.

Keeping taxpayer information secure is also key to maintaining the trust of taxpayers. All negotiations of new information exchange agreements with partners include a review of the recipient organization's security policies and processes. In addition, the recipient organization must agree to perform a regular internal audit review of the use, communication, retention, and disposition of the taxpayer information in question, and to report its findings to the CRA.

We constantly remind our employees of their responsibilities to protect such information; in 2007-2008, we provided 457 security awareness sessions to a total of 10,048 employees. In addition, we undertook the following initiatives this past year to prevent our employees from inappropriate access to protected information.

  • We completed a compliance assurance and monitoring framework for our System Access Profile Program to ensure that we appropriately manage employees' access rights to CRA systems.
  • We also launched a project to establish a National Audit Trail Monitoring Program to allow the CRA to maintain consistent and accessible audit trail records and enable proactive and automated detection of possible unauthorized use and suspicious activity.

As with all federal departments and agencies, the CRA is subject to the provisions of the Access to Information Act and the Privacy Act. These Acts give Canadians the right to access information that is under the control of a government institution within legislated timeframes.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Enhance Canadians' trust in the integrity of the CRA.

Achievement: In 2007-2008, we responded to Access to Information Act and Privacy Act requests within legislated timeframes, 86.6% and 92.2% of the time respectively.

In October 2006, a significant step was taken by the federal and Ontario governments to increase the harmonization of the tax systems in Canada, reduce compliance costs for businesses, and reduce administration costs for governments with the signing of the agreement to transfer the administration of Ontario corporate tax to the CRA. This agreement will save Ontario businesses up to $100 million annually in reduced compliance costs.

Priority in our Corporate Business Plan 2007-2008 to 2009-2010: Plan and implement a single administration of the Ontario corporate tax.

Achievement: In 2007-2008, we worked with the Ontario Ministry of Revenue to achieve important milestones for the implementation of a single corporate tax administration in the province of Ontario.

This year, we undertook the following in preparation for the phased transfer of Ontario's corporate tax functions, under the CTAO initiative.

  • Over 300 Ontario Ministry of Revenue employees accepted employment at the CRA to help ensure the successful delivery of the province's corporate tax program.
  • As of February 2008, Ontario corporations began making a single instalment payment for the 2009 taxation year, thereby reducing their administrative costs.
  • A communication strategy was implemented to ensure that Ontario-based corporations and tax advisors understand the way in which a single tax administration will impact them and whom they should contact for answers.

These accomplishments illustrate our commitment to maintaining the trust of Canadians. We believe that maintaining this trust is fundamental to our success in administering tax and benefit programs.

Human resources capacity and capability

To deliver our tax and benefits programs, we require a diverse and adaptable workforce with strong leadership and superior technical expertise. In June 2007, the Clerk of the Privy Council introduced his 2007-2008 Public Service Renewal Action Plan (PSRAP), which identified key priorities for ensuring the federal Public Service meets future challenges. Our human resources agenda is well positioned to respond to the needs of our business while being aligned with the PSRAP.

This past year, we developed the first annual Canada Revenue Agency Workforce Plan (AWP), which integrates workforce and business planning through such steps as increasing the mobility of work to benefit from employees' knowledge and experience and meet our business needs, promoting employee movement across various business lines, and building an effective and strategic recruitment approach.

Attracting new and excellent talent will help ensure that we can continue to respond to the evolving needs of Canadians. In 2007-2008, we set a target of recruiting 165 indeterminate post-secondary graduates. We surpassed this goal by appointing 249 post-secondary graduates to indeterminate positions, through initiatives such as our Auditor and Aboriginal Tax Officer Apprenticeship programs.

We must continue to invest in our employees to ensure that they have the necessary skills and competencies. We achieved our 90% target for putting in place learning plans for our indeterminate employees. This result is a significant increase from 67% achieved in 2006-2007.

Leadership development is essential for the effective management of the CRA. In 2007-2008, approximately 150 employees participated in our corporate management development programs. We also expanded delivery of our Management and Leadership Program courses and, as a result, over 2,600 participants attended learning events.

For any organization, relationships between the employer and its employees must remain positive for business goals to be met. On December 3, 2007, an historic milestone was achieved when the CRA signed a new collective agreement with the Public Service Alliance of Canada that was negotiated before the expiration of the former collective agreement. A key component of this agreement was the pay negotiation for our Services and Programs (SP) group, which replaced 16 former occupational groups for approximately 25,000 employees.

Our staffing-related Pre-Qualification Process (PQP), which involves standardized assessments, is a critical part of building our organizational capacity. In 2007-2008, we made PQP mandatory for our internal selections process, resulting in an increase of 8% in the cumulative average time to staff (compared to 2006-2007). Our intention is to reduce the average staffing time.

Conclusion

During the past year, we delivered on our management priorities through our strong performance, timely and responsive decision-making, a fully accountable senior management culture, and improved planning and reporting, thereby contributing to the effective governance of the CRA. Based on our achievements this past year related to our priorities, as well as the steps we took to strengthen our management infrastructure, we believe that we effectively responded to the CRA's strategic outcomes for both the administration of Canada's tax laws and the delivery of benefits.