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Section II: Analysis of Program Activities by Strategic Outcome

Taxpayer and Business Assistance (PA1)


Taxpayer and Business Assistance (PA1)

Benefit to Canadians

Our Taxpayer and Business Assistance area helps taxpayers, businesses, and registrants meet their obligations under Canada’s self-assessment system by providing access to timely and accurate information. Taxpayers have access to the information they need through a variety of channels (e.g., our Web site, telephones, paper publications, in person, and outreach). It also provides rulings and interpretations to clarify and interpret tax laws, as well as for CPP/EI purposes, and administers federal tax legislation governing registered plans and charities.

Our expected results are the criteria we use to measure our activities and report to Canadians on their effectiveness. We carry out this program activity to achieve the following:

Taxpayers, businesses, and registrants have access to timely and accurate tax information products and services; and non-compliance with applicable legislation by organizations and businesses administering and/or producing registered plans, charities, and excise dutiable products is detected and addressed.

PA1 Snapshot

Figure 6 Actual Spending


Actual Spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned Spending
Total Authorities
Actual Spending
Planned
Actual
Difference
$690,626
$542,727
$531,371
4,137
3,817
320

Key Volumetrics

Enquiries and Information Services – We handled more than 17.7 million public enquiries and over 35.6 million tax-related visits to the CRA Web site.

Excise and GST/HST Rulings and Interpretations – We processed over 3,700 written enquiries for rulings and interpretations and handled over 101,000 -related telephone enquiries.

CPP/EI Rulings – We processed over 73,000 requests for rulings.

Registered Plans – We administered approximately 33,000 plans (e.g., registered pension plans, deferred profit sharing plans, supplementary unemployment benefit plans, registered investments), reviewed related returns, and conducted 470 audits.

Charities – We processed over 80,000 annual information returns for registered charities, and conducted 719 audits.

Contribution to CRA Priorities

Strengthening Service and Tax Integrity

In support of this priority, in 2009-2010 we accomplished the following:

As identified in our 2009-2010 Report on Plans and Priorities 
Achievements
Enhance the suite of self-service options
We added Smartlinks to transactional pages of My Business Account to encourage and support taxpayers who use this service.
We made significant recommendations for improvement based on analysis of user traffic to the Web site.
We enhanced our online portal and Taxpayer Services Agent Desktop application to ensure that all relevant material (such as information on the harmonized sales tax for residents of Ontario and British Columbia and the Home Renovation Tax Credit) was posted to the Web site and to agents’ online reference materials.
Enhancements to the Taxpayer Services intranet site and the internal search engine enabled agents to provide better service.
Optimize the telephone channel
Based on the Profile of Enquiries results and taxpayers feedback obtained by our call centre agents, we have identified highly complex enquiry topics better suited to the subject matter experts located in Centres of Expertise. We redirected such calls to these agents to improve the quality and efficiency of our service.
Strengthen outreach
We provided information sessions on the transition to the harmonized sales tax in Ontario and British Columbia. In support of this transition, our business enquiries agents supported our promotion call-out campaign to provide rural small business owners with information about the pending implementation of the harmonized sales tax.
Our Community Volunteer Income Tax Program showed an increase in volunteers and the number of returns they prepared for the taxpayers who are eligible to use this service. In an effort to maximize the use of technology, we launched an online training program through the CRA Web site for the community volunteers.
We conducted numerous outreach activities for both individuals and businesses and noted the number of participants increased substantially from the previous year.
Implement a new tobacco product stamping regime with covert and overt security features
As a major step to prevent contraband tobacco products from entering the Canadian market, and to support the Government of Canada’s health objectives, a prototype tobacco excise stamp was developed and is being tested by the tobacco industry. On March 29, 2010, Bill C-9 was tabled in Parliament and includes proposed amendments to the Excise Act, 2001 to support the implementation of the stamp, expected in 2010-2011. The Bill received Royal Assent in July 2010.
Continue the implementation of a risk-based approach to registered plans
The registration process for registered plans has been streamlined using a risk-based approach to ensure the resources were dedicated to those plans that presented the greatest risk. In 2009-2010, the desk and field audit programs have both undergone a modernization review to ensure they are operating in the most efficient and effective manner. Nevertheless, we managed to increase the number of registered plans audit by 5.9%.
Modernize and strengthen the charities program
We made significant improvements in responding to simple and regular applications for charitable status within the established time frames. In 2009-2010, the intake of applications remained relatively consistent, however procedural changes were implemented to this workload that improved our response time.

Lessons Learned

What worked well: We improved the quality of our services to taxpayers by making them more timely, accessible, and easier to use. We maintained our high caller accessibility levels on all of our enquiries lines. Compliance efforts within the tobacco industry were enhanced by developing and testing a prototype tobacco excise stamp. We also implemented initiatives for retroactive refunds and collecting increased charges under the Softwood Lumber Agreement, 2006 (SLA 2006).

What could be improved: In 2009-2010, our challenge was to continue the transformation of all service channels, allowing us to meet client needs in order to encourage voluntary compliance. We must continue to improve our diverse service offerings to address legislative change and increase our responsiveness to the evolving information needs of taxpayers. One way of ensuring that we continue these improvements is to capitalize on emerging technologies.

Performance Report Card

Expected Result
Year
Performance Rating
Data Quality
Taxpayers, businesses, and registrants have access to timely and accurate information
2009-2010
Met
Good
2008-2009
Mostly Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
General calls answered within two minutes of entering the agent queue
80%
80%
82%
83%
82%
81%
Met
Business calls answered within two minutes of entering the agent queue
80%
85%
81%
82%
87%
86%
Met
Charities calls answered within two minutes of entering the queue
80%
86%
88%
86%
87%
90%
Met
Respond to written requests for GST/HST rulings and interpretations within 45 working days of receipt of request
80%
88%
89%
93%
94%
Met
Average number of days to issue an income tax technical interpretation to taxpayers
90 days (avg)
87 days
105 days
89 days
91 days
89 days
Met
Average number of days to issue an advance income tax ruling to taxpayers
60 days (avg)
84 days
94 days
101 days
104 days
98 days
Not Met
Percentage of CPP/EI rulings issued within targeted time frames
85%
91%
84%
93%
91%
88%
Met
Percentage of responses to simple applications for charitable registration within targeted time frames (2 months)
80%
Not Applicable
Not Applicable
42%
58%
82%
Met
Percentage of responses to regular applications for charitable registration within targeted time frames (6 months)
80%
Not Applicable
Not Applicable
53%
22%
80%
Met
Percentage of registered pension plans applications reviewed within established time frames
85%
96%
97%
94%
92%
86%
Met
Percentage of accurately updated internal reference materials for taxpayer services and charities agents
100%
Not Applicable
Not Applicable
Not Applicable
100%
100%
Met
Percentage of general callers who reach our telephone service[Footnote 2] 
90%
83%
83%
84%
92%
91%
Met
Percentage of business callers who reach our telephone serviceFootnote 2
90%
91%
86%
79%
94%
93%
Met
Charities callers who reach our telephone service
90%
93%
96%
93%
95%
Met
[Footnote 1] This became a service standard in 2006-2007. Prior year results reflect performance against an internal target.
[Footnote 2] The caller accessibility targets for general and business callers were raised from 80% in 2008-2009.
[Footnote 3] This result has been restated.
Expected Result
Year
Performance Rating
Data Quality
Non-compliance is detected and addressed
2009-2010
Met
Good
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Percentage of excise regulatory reviews completed compared to planned
90%
Not Applicable
Not Applicable
98%
91%
92%
Met
Percentage of excise audits completed compared to planned
90%
Not Applicable
Not Applicable
100%
96%
109%
Met
Percentage of registered plan audits completed compared to planned
100%
Not Applicable
Not Applicable
Not Applicable
96%
101%
Met
Percentage of registered charities audits completed compared to planned
100%
Not Applicable
Not Applicable
Not Applicable
100%
89%
Not Met
For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Assessment of Returns and Payment Processing (PA2)


Assessment of Returns and Payment Processing (PA2)

Benefit to Canadians

Our programs contribute to individuals and businesses meeting their filing, reporting, and payment obligations. We undertake a wide range of activities to assess and process individual and business tax returns and payments. We use risk assessment, third-party data matching, and information validation to detect and address non-compliance.

Our expected results are the criteria we use to measure our activities and report to Canadians on their effectiveness. We carry out this program activity to achieve the following:

Individuals, businesses and registrants are provided timely and accurate tax assessment notices and tax payment processing while targeted reviews detect and address non-compliance by individuals with applicable tax laws.

PA2 Snapshot

Figure 7 Actual Spending


Figure 2 Actual Spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned Spending
Total Authorities
Actual Spending
Planned
Actual
Difference
$587,917
$728,359
$690,835
6,511
6,867
(356)

Key Volumetrics

Individual Returns Processing – We processed more than 26.7 million individual returns, over 11 million of which were paper; refunded almost $26.6 billion to more than 17 million individual taxpayers and processed over 229,000 trust returns. There were more than 338,000 additional individuals enrolled and over 4.5 million visits to My Account.

Business Returns Processing – We processed almost 1.6 million information returns. We also processed more than 1.9 million corporate returns and 7 million GST/HST returns.

We handled more than 34.4 million payments, totalling just over $357.9 billion.

Contribution to CRA Priorities

Tax integrity and Strengthening Service
In support of these priorities, in 2009-2010 we accomplished the following:
As identified in our 2009-2010 Report on Plans and Priorities 
Achievements
Optimize program efficiency and the accurate assessment of tax owed
In 2009-2010, we committed to continuing the removal of specific barriers and exclusions to electronic filing for businesses.
As of the fall of 2009, corporations involved in scientific research and experimental development (SR&ED) were able to file their tax return using the Corporation Internet Filing system.
In a continuing effort to expand the population that is eligible to file electronically, we increased the threshold for e-filing a credit return. This allowed registrants to Netfile their return rather than having to send in a paper return for periods with a credit balance greater than $10,000 and less than $50,000.
Enhance our ability to address non-compliance
Over the years, we have improved our ability to conduct post-assessment activities for individual returns. We also recognize the need to put in place equally effective measures to improve the risk assessment capabilities of our compliance programs as they relate to T2 Corporation returns. With that in mind, we launched the Corporation Assessing Review Program. The goal of this new program is to enhance the CRA’s overall compliance coverage and help to quickly detect non-compliant activity in corporation returns. It is important to note that we are currently in the development stages of this program and, therefore, we did not produce measurable data for 2009-2010.
Enhance our electronic services
In the fall of 2009, the CRA introduced a new online feature called My Payment. This service lets individuals and businesses make payments electronically through a secure link with participating Canadian financial institutions that offer the Interac[Footnote 1]  Online payment service. My Payment should simplify accounting because the transfer is immediate; there is no need for taxpayers to pay early to make sure their payment arrives on time or to monitor their account because of an outstanding cheque.
We added more options to My Account, our secure portal that gives individuals an online view of their tax and benefit information. Taxpayers can now view certain T4 information slips as well as their Tax Free Savings Account contribution room.
We launched a new internet filing option for returns.
Our Represent a Client service, which gives authorized representatives a secure, single point of access to multiple clients’ information, continues to attract considerable interest in the representative community. In 2009-2010, the CRA made it possible for business owners and senior administrators to view transactions completed by representatives on individual accounts and for representatives to download client lists.
Maintain and enhance effective relationships
We continued to expand the use of the Business Number as a common client identifier for businesses to securely and efficiently interact with various levels of government. In the fall of 2009, we replaced the Filer Identification Number with the Business Number. The former Filer Identification Number was used as the account number by financial institutions and trust administrators to file T5 information returns. This latest conversion may reduce the administrative burden on clients as there will be fewer accounts for clients to maintain. It also contributes to the ongoing efforts in the broader public sector to simplify and streamline the way businesses deal with the federal government

[Footnote 1] Trade-mark of Interac Inc. Used under licence

Lessons Learned

What worked well: We expanded our electronic service options to make it easier for taxpayers to interact with us. We processed individual and business tax and information returns and payments accurately and on time. We carried out pre-assessment and post-assessment activities to detect and address instances of non-compliance.

What could be improved: This program activity plays a key role as Canadians make use of measures introduced through budget announcements and economic updates at the federal, provincial, and territorial levels of government. Under tight timeframes, our challenge is to ensure that these measures are in place and that we are positioned to maintain effective delivery of our programs while continuing to focus on long-term sustainability with respect to modernization, integration, financial limitations and public expectations.

Performance Report Card

Expected Result
Year
Performance Rating
Data
Quality
Assessment and payment processing are timely and accurate
2009-2010
Met
Good
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Service Standards[Footnote 1] 
Processing T1 individual income tax returns (paper): in an average of 4-6 weeks
100%
3.6  weeks
3.9  weeks
4.1 weeks
4.0 weeks
4.3 weeks
Met
Processing T1 individual income tax returns (electronic): within an average of 2 weeks [Footnote 2] 
100%
1.9  weeks
1.6  weeks
1.7  weeks
1.6 weeks
1.6 weeks
Met
Percentage of GST/HST returns processed within 30 days
95%
98.3%
98.5%
91.9%
97.3%
Not Available[Footnote 3] 
Not Applicable
Processing T2 corporation income tax returns within 60 days
90%
Not Applicable
Not Applicable
92%
90.8%
92.8%
Met
Processing Excise Tax, Excise Duty, and Air Travellers Security Charge returns within 90 days
95%
Not Applicable
98.1%
98.2%
99%
97%
Met
Performance Standards
Percentage of funds from non-electronic payments deposited within 24 hours of receipt
96%
99.4%
95.9%
93.9%
95.2%
96.6%
Met
T1 returns received on time processed by mid-June
98%
99.7%
99.7%
99.8%
99.9%
99.7%
Met
Electronic Processing Take-Up
Percentage of individuals who file electronically
Upward trend
Not Available
50.6%
53.5%
55.8%
57.9%
Met
Percentage of corporations that file electronically
Upward trend
Not Available
14.0%
18.0%
21.5%
28.5%
Met
Percentage of T1 returns assessed accurately
98%
99%
98.9%
99.1%
98.9%
99%
Met
Taxpayer-requested adjustments are reassessed accurately
96%
Not Available
97.4%
96.6%
97.0%
96.1%
Met
[Footnote 1] See www.cra.gc.ca/annualreport for breakdown of indicators, targets, and overall results against external service standards.
[Footnote 2] Represents the average number of weeks.
[Footnote 3] Substantiated results are not available for 2009-2010. Revised data capture method began in June 2010.
For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Accounts Receivable and Returns Compliance (PA3)


Accounts Receivable and Returns Compliance (PA3)

Benefit to Canadians

Our Accounts Receivable and Returns Compliance area manages the largest debt collection service in Canada. It collects receivables arising from taxes (income tax,GST/HST) and programs such as the Canada Pension Plan, Employment Insurance, and defaulted Canada student loans. In addition, this area promotes compliance with Canada’s tax legislation covering employers, payroll, and GST/HST.

Our expected results are the criteria we use to measure our activities and report to Canadians on their effectiveness. We carry out this program activity to achieve the following:

Non-compliance by individuals, businesses and registrants with the filing, registration, and remitting requirements of applicable tax laws is detected and addressed to protect Canada’s revenue base.

PA3 Snapshot

Figure 8 Actual Spending


Figure 3 Actual Spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned Spending
Total Authorities
Actual Spending
Planned
Actual
Difference
$429,712
$533,979
$529,982
7,216
7,562
(346)

Key Volumetrics

Accounts ReceivableTSO cash collections totalled $12.4 billion of which the National Pools actions contributed $1.1 billion. We resolved over 95% of the dollar value of new debt intake.

Returns Compliance – More than 728,000 returns were obtained from individuals and corporate taxpayers who had not filed their returns, over 7,600 non-registrants were identified and 552,000 payroll non-compliance occurrences were completed. Our Contract Payment Reporting Initiative secured a total of 43,425 additional individual and corporate tax returns.

Contribution to CRA Priority

Tax integrity
In support of this priority, in 2009-2010 we accomplished the following:
As identified in our 2009-2010 Report on Plans and Priorities
Achievements
Manage the level of tax debt
We increased our focus on our front-end collections program, which handles the resolution of routine, low-risk, tax debt at minimal cost within a specified period of time. This allows our Tax Services Offices (TSO) agents to concentrate on accounts that require more analysis and investigation.
Manage the level of tax debt
Front-end operations focus on resolving accounts early, through activities such as telephone contact and automated letters, before the accounts enter into resource-intensive debt management operations. Our TSO operations focus on more complex, higher–risk accounts that entail using escalating collection measures, including legal and enforcement actions, to deal with non-compliant taxpayers
Implement the transition of the collection activities
The 2008 Federal budget approved a Strategic Review proposal requiring the CRA to discontinue the use of private collection agencies (PCAs) collecting defaulted Canada Student Loans (CSL) debts and to undertake the recovery of the PCA workload internally at the CRA. During the implementation period, we re-modelled the collection process with improved tracing tools, centralized workloads in specific field offices, and realigned existing work within field offices. In 2009-2010, we finalized the transition of collection activities for defaulted CSL accounts from the PCAs to the CRA
Implement the Trust Compliance National Inventories
The implementation of the Trust Compliance National Inventories initiative achieved some important benefits. It created a national inventory for all trust compliance work that allowed the equitable distribution of the varying types of compliance work to all compliance officers. It also removed geographical boundaries and facilitated the implementation of more effective processes, more detailed reporting, and clearer accountabilities. It resulted in positive impacts in both the Employer Trust Compliance and the Delinquent Filer program.
Maintain and enhance non-filer/non-registrant underground economy identification projects
In the latter part of the fiscal year, we initiated a pilot project to further refine the way we target potential non-filer accounts. This pilot uses predictive analytics and risk scoring to improve the determination of tax potential for known non-filer cases. The results of the pilot will be known in 2010-2011, and will be used to further enhance strategies and advanced tools to address filing non-compliance
The prevalence of underground economy activity and its ongoing threat to the security of the Canadian tax base continue to drive the need for the CRA to change negative taxpayer behaviour through educational outreach and responsible enforcement. The Underground Economy Non-Filer/Non-Registrant Identification projects are reflected in the data and have resulted in 26,907 tax returns being produced by filers previously unknown to the CRA. The related fiscal impact generated was $274.8 million.
Improve the performance management framework
In 2009-2010, we revised our performance management framework to improve the measurement of our performance in addressing non-compliance.

Lessons Learned

What worked well: In 2009-2010, we mostly met the targeted level of resolving our tax debt and government programs’ (non-tax) debt on a timely basis. Our tax debt and government programs’ (non-tax) debt were within targeted levels. Non-compliance was detected and addressed within targets.

What could be improved: Our challenge is to identify, address, and prevent non-compliance, and to ensure we continue to resolve tax debt on a timely basis and keep it within targeted levels

Performance Report Card

Expected Result
Year
Performance Rating
Data Quality
Tax and non-tax debt are resolved on a timely basis and are within targeted levels
2009-2010
Mostly Met
Good
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Percentage of intake resolved in the year of intake
60%
62.4%
66.7%
60.4%
62.7%
54.6%
Not Met
Dollar value of TSO production as a percentage of dollar value of TSO intake of new accounts receivable
90%
99.8%
90%
83%
93%
95.5%
Met
Dollar value of TSO tax accounts receivable older than five years ($ billions)[Footnote 1] 
$2.7
$2.5
$3.0
$2.6
$2.8
$2.9
Not Met
TSO cash collections ($ billions)
$8.9
$9.5
$9.7
$11.9
$16.0
$12.4
Met
Non-tax debt – Dollars collected ($ millions)
$590.5
Not applicable
$592.0
$614.7
$622.7
$615.3
Met
[Footnote 1] This is a revised indicator and target
Expected Result
Year
Performance Rating
Data
Quality
Non-compliance is detected and addressed
2009-2010
Met
Good
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Non-compliance: T1/T2 non-filers and GST/HST non-registrants ($ billions)[Footnote 1] 
$2.4
$2.5
$2.4
$2.4
$2.4
$2.8
Met
Non-compliance: Employer/payroll/ Trust Accounts ($ billions)
$1.4[Footnote 2] 
$2.3
$2.4
Not available
$2.5
$1.6
Met
[Footnote 1] The target of $2.4 billion includes both T1/T2 non-filer and GST/HST non-registrant sources. The resulting fiscal value of non-compliance was identified as $2.78 billion from the T1/T2 non-filer source, and $65 million from the GST/HST non-registrant source.
[Footnote 2] Target does not include GST/HST delinquent filer program. Production and fiscal impact results were unavailable in 2009-2010 due to the GST/HST redesign project and the Trust Compliance National Inventories initiative.
For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Reporting Compliance (PA4)


Reporting Compliance (PA4)
Benefit to Canadians

We undertake examinations, audits, and investigations to ensure compliance with Canada’s tax laws. This includes verification and enforcement activities at the domestic and international level, as well as the administration of international tax agreements. We also provide information to taxpayers to help them comply. We conduct research to improve identification of non-compliance and develop strategies to address it.

Our expected result is the criteria we use to measure our activities and report to Canadians on their effectiveness. We carry out this program activity to achieve the following:

Non-compliance by individuals, businesses and registrants with the reporting requirements of the legislation the CRA administers is identified and addressed to protect Canada’s revenue base.

PA4 Snapshot

Figure 9 Actual Spending


Figure 4 Actual Spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned
Spending
Total
Authorities
Actual
Spending
Planned
Actual
Difference
$922,077
$1,129,081
$1,092,367
10,563
10,147
416

Key Volumetrics

International and Large Businesses – We conducted 51,600 audits, resulting in a fiscal impact of $7.2 billion.

Small and Medium Enterprises – We conducted 380,373 audits and examinations, resulting in a fiscal impact of almost $2.1 billion.

Enforcements and disclosures – We conducted 928 audits under the Special Enforcement Program, identifying $78 million in additional tax owing. We also referred 149 income tax and GST/HST cases to the Public Prosecution Services of Canada.

Scientific Research and Experimental Development Program – This program provided almost $3.3 billion in tax credits to over 21,000 claimants.

Contribution to CRA Priorities

Tax Integrity and Strengthening Service
In support of this priority, in 2009-2010 we accomplished the following:
As identified in our 2009-2010 Report on Plans and Priorities 
Achievements
Address aggressive tax planning
In 2009-2010, the CRA further addressed aggressive tax planning by implementing the International Tax Compliance Action Plan. We also undertook discussions with other tax administrations on tax information exchange agreements as part of our Exchange of Information initiative. On August 29, 2009, Canada signed its first tax information exchange agreement with the Netherlands Antilles.
Combat the underground economy (UE)
The UE undermines the competitiveness of Canadian businesses because it offers an unfair advantage to those who fail to comply with Canada’s tax laws. To combat the UE, our goals in 2009-2010 were to increase awareness of this issue among Canadians and to take effective actions to reduce its occurrence. We used a mix of education, outreach, communication, and compliance actions to meet our objectives. We also worked with other federal agencies and departments, provincial governments, tax administrations in other countries, international organizations, professional organizations, and key industry groups to share best practices and to develop innovative strategies to address the UE.
The CRA continued to implement the Underground Economy Compliance Strategy action plan. A number of pilot projects tested innovative compliance approaches to detect and deter UE activity. Nine underground economy projects came to an end in 2009-2010. Their results will be analyzed to determine whether new processes or techniques can be integrated to enhance our program activities, our risk assessment systems, and our strategies. Final reports of past UE pilot projects will also be reviewed to identify best practices that can be added into our regular compliance activities.
Focus on GST/HST high-risk compliance
In 2009-2010, the CRA continued to implement its GST/HST High Risk Compliance Strategy action plan. Our approach to compliance includes:
  • enhancing our enforcement activities;
  • improving our ability to identify high-risk registrants and refund claims before refunds are issued; and
  • broadening our engagement of stakeholders.
To strengthen Agency-wide capacity to address willful non-compliance, three GST/HST high risk pilot projects were completed in 2009-2010. The results of these projects will be analyzed to determine if new processes or techniques can be integrated into our GST/HST compliance activities and strategies.
Enhance the SR&ED program
In the 2008 federal budget, the CRA committed to enhancing the quality assurance methodology of the Scientific Research and Experimental Development (SR&ED) program. In 2008-2009, we consulted with stakeholders and, in turn, developed a national SR&ED quality assurance framework. This framework will help ensure SR&ED claims and decisions are appropriate and consistent with CRA policies and the governing legislation across the country. Based on this framework, the SR&ED Quality Assurance Operations manual and the requisite tools were developed in 2009-2010.
In the 2008 Federal Budget, the CRA also committed to reviewing the SR&ED policies and procedures. In 2009-2010, we analyzed, organized, and clarified all SR&ED policy information. Over the next two years, the SR&ED program will be conducting online consultations to get the public's feedback on the new policy documents.
In 2009-2010, we expanded the filing capabilities of the CRA’s Corporation Internet Filing service to allow eligible corporations to file their SR&ED claims, with their income tax returns, using the internet.
In 2009, Canada’s SR&ED program provided about $3.3 billion in tax assistance to over 21,000 claimants.
Enhance the Voluntary Disclosures Program (VDP)
The VDP encourages taxpayers to correct past errors or omissions and report their tax obligations without penalty or prosecution. In 2009-2010, the program saw a 14% growth in intake and processed 12,506 disclosures. The unreported income identified in 2009-2010 was over $1.8 billion, a 135% increase over the previous year.
We worked to improve the administration of the VDP in 2009-2010 through analysis of the current intake and environment. We also completed our annual quality review of the VDP in selected offices across Canada and found that all of the offices reviewed met our 90% internal quality standard. In addition, we promoted the VDP in news releases and tax alerts and incorporated it into our compliance initiatives. During 2009-2010, we saw an increase in both VDP cases received and unreported income identified.
In 2009-2010, we continued to see an increase in intake of information returns in the Voluntary Disclosures Program, such as those required for foreign reporting purposes. We use information from these returns to enhance our risk assessment processes and assist in the identification of non-compliance.

Lessons Learned

What worked well: In 2009-2010, we continued our strong enforcement record, promoted public messaging to deter non-compliance, and enhanced the administration of the Voluntary Disclosures Program and the Scientific Research and Experimental Development program. We completed our second Compliance Review, identifying five major compliance priorities, and worked to improve our understanding of compliance risks that challenge the Canadian tax system. Over the last few years, our assessment of having met our expected result for reporting compliance activities has been based on a variety of performance indicators as we try to find those that most effectively measure achievement of the result. This year, we have introduced several new indicators into the performance report card, on Page, that focus on the extent to which our compliance activities resulted in a change to the amount of tax owed, and the revenue recovered through those changes. We see an ongoing challenge in measuring how effective our verification, audit and enforcement activities are in addressing and detecting overall reporting non-compliance

What could be improved: In 2009-2010, as in previous years, the increasing complexity of the Canadian economies presents ongoing challenges to detecting and deterring non-compliance. Although we continue to achieve strong ratings overall for our performance management framework, we recognize the need to further strengthen this area. This challenge is common to tax administrations internationally, but we will continue to work towards using the best measures available to assess that we are achieving the desired result for reporting compliance.

Performance Report Card

Expected Result
Year
Performance Rating
Data
Quality
Non-compliance is detected and addressed
2009-2010
Met
Good
 
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Number of files audited as a percentage of estimate:
International and large businesses
100%
Not Available
197%
124.4%
133.4%
169%
Met
Small and medium-sized enterprises
100%
Not Available
153%
126.9%
136.1%
115%
Met
Financial recoveries[Footnote 1]  as a percentage of estimate:
International and large business
100%
Not Available
169%
167%
116%
133%
Met
Small and medium-sized enterprises
100%
Not Available
267.5%
123.8%
124.7%
141.9%
Met
Percentage of cases[Footnote 2]  resulting in a change:
International and large business
90%
Not Available
92%
94%
95%
96%
Met
Small and medium-sized enterprises
75%
Not Available
80.2%
79.6%
80.9%
81.1%
Met
Voluntary Disclosures Program
Processing time for voluntary disclosures (in days)
Downward trend
Not Available
225
227
253
196
Met
Percentage of voluntary disclosures that are fully compliant with VDP policies and procedures as reviewed as part of our Quality Assurance Program
90%
Not Available
Not Available
Not Available
Not Available
97%
Met

[Footnote 1] Financial recoveries refers to the additional amounts of taxes owing that are identified through our compliance activities, including the present value of future tax assessments. Fiscal impact refers to the amount included within Financial Recoveries, and also includes interest, penalties, and provincial taxes assessed.
[Footnote 2] Starting this year, we changed the reporting methodology for SME and ILB. We have reported ‘cases’ completed instead of ‘files’ completed as reported in previous years. Cases represent the primary risk-assessed audits conducted on a taxpayer, whereas files include all secondary or related cases to the primary cases. A case could have more than one related file
For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Appeals (PA5)


Appeals (PA5)

Benefit to Canadians

Taxpayers can dispute assessments and determinations pertaining to income tax and commodity taxes, and Canada Pension Plan/Employment Insurance (CPP/EI) assessments and rulings.

Our Service Complaints process provides taxpayers with a formal avenue of recourse to the service rights contained in the Taxpayer Bill of Rights. If taxpayers disagree with a decision resulting from our Service Complaints process, they can file recourse actions with the Taxpayers’ Ombudsman.

Our expected results are the criteria we use to measure our activities and report to Canadians on their effectiveness. We carry out this program activity to achieve the following:

Taxpayers receive a timely and impartial review of contested decisions made under legislation administered by the CRA and the handling of service complaints is timely and consistent.

PA5 Snapshot

Figure 10 Actual Spending


Figure 5 Actual Spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned Spending
Total Authorities
Actual Spending
Planned
Actual
Difference
$126,895
$149,799
$148,009
1,339
1,286
53

Key Volumetrics

Disputes – We resolved more than 67,000 disputes. The total taxes in dispute amount to more than $13.7 billion (the value of workable files is $4.7 billion, and the value of non-workable files is almost $9.0 billion.

Taxpayer Relief Provisions – A total of 82,911 requests for relief from interest and penalties were processed by the CRA; 51,218 of these requests were allowed in favour of the taxpayer. The total value of all cancellations and waivers was more than $478 million for 332,141 taxpayers.

Contribution to CRA Priorities

Tax Integrity and Strengthening Service
In support of this priority, in 2009-2010 we accomplished the following:
As identified in our
2009-2010 Report on Plans and Priorities
Achievements
Fully integrate the Problem Resolution Program and CRA Service Complaints initiative
In 2009-2010, we continued the initiative of integrating the Service Complaints and the Problem Resolution programs to better respond to our clients. The integration is intended to permit staff throughout the CRA to address taxpayer concerns, and enhances how we identify and resolve service issues. The integration will be completed during 2010-2011.
Address the challenges in dealing with increasing mandatory workloads
The CRA’s focus on questionable aggressive tax planning schemes has resulted in a significant increase in income tax “class-action” type disputes from taxpayers. To date, taxpayers participating in questionable aggressive tax planning schemes have also chosen to litigate confirmed assessments. A significant increase in the volume of taxpayers’ income tax disputes continued to strain our processing capacity.
In response, the CRA has put in place a number of administrative strategies to deal with the high volume of disputes. We have reallocated existing resources to address the front-end administrative management activities of our dispute resolution process.
We strengthened service by allowing less complex disputes to be distributed and assigned to available resources throughout the country. This increases management flexibility and is expected to improve processing time for this category of work. About $1.5 million was reallocated in the fourth quarter of 2009-2010, our busiest period, to hire and train more staff.
We also launched a review of the reasons for the increased volume in our disputes resolution program, with a view to strengthening the CRA’s overall response. This increased volume of disputes resulted largely from the CRA’s focus on specific aggressive tax planning schemes. The CRA will strive to enhance its planning capability to more effectively address the higher volume of disputes.
We renewed our protocol with the Department of Justice Canada. The changed protocol improves flexibility in resolving certain issues under appeal to the courts. The Department has more latitude to make decisions without having to consult with us. This enhanced flexibility supports our goal of improving taxpayer service by providing decisions sooner.

Lessons Learned

What worked well: In 2009-2010, we demonstrated fairness in our review of taxpayers’ contested decisions. However, it has taken us more time to provide decisions due to a sharp increase in disputes related to aggressive tax planning schemes. Service complaints and the taxpayer relief provisions were administered consistently, in support of our commitment to fairness.

What could be improved: Our challenge is to manage CRA business processes to effectively respond to the increased volume of income tax disputes resulting from targeted compliance activities that focus on questionable tax planning and other schemes.

Performance Report Card

Expected Result
Year
Performance Rating
Data
Quality
Taxpayers receive an impartial and timely review of contested decisions
2009-2010
Mostly Met
Good
2008-2009
Mostly Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Appeals activities that met standards for consistency
Income tax
97%
99.5%
99.6%
99.5%
99.0%
98.6%
Met
Commodity taxes
97%
98.0%
97.0%
95.4%
96.2%
94.9%
Mostly Met
CPP/EI
95%
99.6%
99.6%
99.4%
99.3%
99.4%
Met
Appeals activities that met standards for transparency
Income tax
98%
98.1%
99.3%
99.6%
99.5%
99.7%
Met
Commodity taxes
98%
99.4%
98.8%
99.2%
99.5%
99%
Met
Timeliness indicators
Service standard for initial contact
85%
89%
89%
84%
68%
50%
Not Met
Workable days to complete a case[Footnote 1] 
Income tax
Various
120
107
141
157
187
Not Met
Commodity taxes
Various
170
171
169
214
250
Not Met
CPP/EI
Various
183
203
123
117
149
Not Met
Average age of workable inventory (in days)
Income tax
Neutral or downward trend
159
175
177
205
215
Not Met
Commodity taxes
Neutral or downward trend
175
181
204
243
276
Not Met
CPP/EI
Neutral or downward trend
178
80
70
103
135
Not Met
[Footnote 1] The overall rating is based on whether or not results were achieved against established targets for the combined workloads.
Expected Result
Year
Performance Rating
Data
Quality
Service complaints and taxpayer relief provisions are administered consistently
2009-2010
Met
Good
2008-2009
Mostly Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
  • Service complaints – acknowledged within 48 hours
90%
Not Applicable
Not Applicable
Not Applicable
93.8%
97.9%
Met
  • Service complaints – taxpayers contacted within 15 days
90%
Not Applicable
Not Applicable
Not Applicable
86.7%
94.5%
Met
  • Taxpayer relief provisions – consistent application (per Quality Assurance Program)
90%
Not Applicable
Not Applicable
Not Applicable
95%
97%
Met
For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Benefit Programs (PA6)


Benefit Programs (PA6)

Benefit to Canadians

We contribute directly to the economic and social well-being of Canadians by delivering benefits, credits, and services to eligible recipients. We administer the Canada Child Tax Benefit, the goods and services tax/harmonized sales tax credit, and the Children’s Special Allowances, which are core federal programs that issue benefit payments. We also deliver the Universal Child Care Benefit on behalf of Human Resources and Skills Development Canada, the Disability Tax Credit, as well as other benefit and credit programs and services on behalf of provincial, territorial, and other federal government clients.

Our expected results are the criteria we use to measure our activities and report to Canadians on their effectiveness. We carry out this program activity to achieve the following:

Benefit recipients are provided timely and accurate eligibility determinations and payments, and have access to timely and accurate information.

PA6 Snapshot

Figure 11 Actual Spending


Figure 6 Actual Spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned Spending
Total Authorities
Actual Spending
Planned
Actual
Difference
$331,566
$342,634
$342,440
1,595
1,511
84

Key Volumetrics

Benefit Programs Client Services – We handled almost 6.5 million telephone enquiries.

Benefit Programs Administration – We issued 88.5 million benefit payments totalling over $17.6 billion[Footnote 1]  to almost 11.5 million recipients. We determined $816 million in Disability Tax Credit (DTC) for 547,000 individuals. We processed 729,000 applications and elections, 726,000 account maintenance adjustments, and 1,023,000 in-year GST/HST credit account redeterminations.

Direct transfer payments under statutory programs – We issued $215 million under the Children’s Special Allowances (CSA) program.

Contribution to CRA Priorities

Strengthen Service, Benefits Validation and Effective Relationships
In support of this priority, in 2009-2010 we accomplished the following:
As identified in our
2009-2010 Report on Plans and Priorities 
Achievements
Ensure timely and accurate benefit payments to all eligible individuals
We met our timeliness service standard target for responding to written enquiries and telephone referrals. In 2009-2010, our overall accuracy was 97.4% for processing benefit applications and marital status forms, and 99.3% for processing written enquiries and telephone referrals, meeting our target of 98%. Payment accuracy for these activities was 99.4% for processing benefit applications and marital status forms and 100% for processing written enquiries and telephone referrals.
In 2009-2010, we launched a new Web page for qualified practitioners to ensure they have the information they need to complete the disability tax credit certificate form on behalf of their patients.
To ensure that our notices are clear and our messages are understandable, we reviewed them during 2009-2010. We also reviewed the quality of correspondence we send to taxpayers.
Enhance self-service options
We strengthened service during 2009-2010 by making our programs and services more accessible and efficient. We invested resources to enhance our electronic self-service options to ensure that benefit recipients had timely access to the information and tools that they needed.
For example, individuals now have the ability to remit benefit overpayments electronically through some financial institutions and also through the CRA’s My Payment Web service. The number of electronic benefits applications received through Benefits Online Applications increased by 52.9% over 2008-2009.
Optimize the telephone channel
We communicate with Canadians through the Internet and on paper, but many people still rely on the telephone as their main method of contact. In 2009-2010, we were successful in meeting our target for the percentage of callers able to reach us by telephone (91.8% for the Canada Child Tax Benefit and 90.7% for the GST/HST credit enquiries). We strive to provide accurate telephone service by using various tools and updating reference materials we need to work efficiently. This year, in order to improve our agent training materials, we undertook a major revision and redesign of courses into modernized, online formats.
Strengthen outreach
To ensure that Canadians know about and can access benefit and credit programs, we were involved in outreach activities during 2009-2010. We sent representatives from our Disability Tax Measures Initiative to attend several medical conferences. Recognizing a need for targeted messages for First Nations and the Territory of Nunavut, we created and distributed posters containing information about benefit and credit programs. The Nunavut poster is available in English, French, and Inuktitut.
Strengthen benefit validation activities
To measure levels of compliance, we review and verify recipient information each year, contacting individuals to confirm details of their accounts. The information provided to recipients during validation reviews is designed to inform and educate them about their eligibility and entitlement requirements. We provide this service to encourage recipients to comply with program reporting obligations so they receive accurate payments.
Manage business growth and partnerships
The number of programs and services administered by the CRA increased from 93 in 2008-2009 to 96 in 2009-2010 with the introduction of three new income verification programs related to Prince Edward Island student loans.

Lessons Learned

What worked well: In 2009-2010, we met each challenge we encountered. We maintained exceptional performance in delivering programs while incorporating important additions and changes to our programs and services. Our results show that we consistently administered reliable, high-quality programs and services to benefit recipients and client governments during one of the most difficult economic periods that Canadians have faced in many years.

What could be improved: We understand the importance that Canadians place on our reliable and accurate delivery of payments and credits on behalf of our government clients. We are challenged each year to ensure that increased needs and limited resources do not have a negative effect on our delivery of essential benefits and services.

Performance Report Card

Expected Result
Year
Performance Rating
Data
Quality
Benefit recipients have access to timely and accurate information
2009-2010
Met
Good
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Percentage of CCTB calls answered within two minutes of entering the agent queue
75%
76%
75%
78.3%
78%
74.9%
Met
Percentage of CCTB callers who reach our telephone service[Footnote 1] 
90%
77%
80%
87.1%
94%
91.8%
Met
Percentage of GST/HST credit callers who reach our telephone service[Footnote 2] 
90%
74%
77%
83.2%
92.8%
90.7%
Met
[Footnote 1] Caller accessibility targets were increased from 80% to 90% for 2008-2009.
[Footnote 2] There was no target for credit callers before 2008-2009.
Expected Result
Year
Performance Rating
Data
Quality
Eligibility determination and payment processing are timely and accurate
2009-2010
Met
Good
2008-2009
Met
Good
Our Indicators
Current Target
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
Rating
Percentage of benefit applications and marital status change forms processed on time
98%
99.4%
99%
99.1%
97.4%
98.8%
Met
Percentage of CCTB accounts adjusted that were targeted under validation programs
50%
62.3%
61.4%
65.6%
58.8%
53.5%
Met
Percentage of accurate payments when processing benefit applications and marital status change forms
98%
99.5%
99.7%
98.9%
99.2%
99.4%
Met
Percentage of accurate payments when processing account maintenance adjustments
98%
99.7%
98.5%
98.4%
98.8%
100%
Met
For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Internal Services (PA7)


Internal Services (PA7)

Benefit to Canadians

The CRA delivers high-quality tax, benefit, and related services on behalf of governments across Canada. Providing internal services is an integral part of the overall effectiveness of our program delivery. We set the business conditions that foster excellence in program delivery through responsible management practices, such as effective accountability and oversight measures, as well as sound management of enterprise risk, human resources, information technology, business knowledge, information, and growth. In support of our two strategic themes, our internal services must be fully integrated to ensure that our tax and benefit services have the guidance, infrastructure, and resources needed for successful delivery.

PA7 Snapshot

Figure 12 Actual Spending


Figure 12 Actual spending
2009-2010 Financial Resources (in thousands of dollars)
2009-2010 Human Resources (FTEs)
Planned Spending
Total Authorities
Actual Spending
Planned
Actual
Difference
$1,295,854
$1,156,451
$1,068,803
8,086
9,010
(924)

Contribution to CRA Priorities

In support of this priority, in 2009-2010 we accomplished the following:
This program activity supports all priorities within this organization.
As identified in our 2009-2010 Report on Plans and Priorities
 
Achievements
Strengthen accountability and oversight
To ensure that we are effectively meeting our responsibilities for accountability, we use two complementary tools:
  • the Management Accountability Framework assessment conducted by the Treasury Board of Canada Secretariat: of the 11 indicators assessed in 2009-2010, we received 7 “strong” and 4 “acceptable.” A notable achievement is the progress we made in the area of information management, which received a rating of “acceptable” in 2009-2010 compared with “opportunity for improvement” in 2008-2009; and
Strengthen accountability and oversight
  • the Board of Management Oversight Framework assessment conducted by our Board of Management: of the 18 indicators assessed in 2009-2010, we received 14 “strong” and 4 “acceptable.” However, our Service Redress Mechanism received a lower rating (from “strong” to “acceptable”). The lower rating is consistent with Budget 2010, which commits the CRA to undertake a review of the Service Complaints Program with a view to making it more visible and accessible to taxpayers.
In 2009-2020, to promote the efficient and effective use of financial resources, we improved our financial systems and processes, and the linkages between our resources and the results we achieved. Following a comprehensive review of our program spending and as part of the CRA Strategic Review, in 2009-2010 we met our commitment and reduced program budgets by $14.3 million.
Optimize program delivery
The CRA implemented its first multi-year strategic investment plan, supported by a documented project portfolio management approach. Through the investment plan and its underlying long-range approach, senior management was given information to determine the investment priorities and funding strategies needed to sustain our applications and assets so that we can deliver key services to Canadians. The spring 2010 report of the Auditor General of Canada on aging information technology systems reflected positively on the CRA’s achievements in strategic investment planning.
Risk management
We completed our Corporate Risk Inventory 2009, an integral part of our annual strategic planning exercise. The five key priorities of the Corporate Business Plan 2010-2011 to 2012-2013 were based on the highest CRA risks identified in the inventory (related to payment compliance and the underground economy). A CRA risk action plan was also developed to ensure that we have appropriate response strategies for all the risks identified in the inventory.
Plan for talent
The CRA developed and published guidelines to help managers with succession planning. During 2009-2010, progress was made in identifying the key jobs within the CRA for which knowledge transfer strategies will need to be developed to lessen the risk of corporate knowledge loss in certain areas. Furthermore, specific products, such as the Job Shadowing Toolkit and Community of Practice, were developed to facilitate the transfer of knowledge.
Acquire talent
We took important and fundamental steps toward advancing our Competency-Based Human Resources Management regime in 2009-2010, including the continued use of mandatory pre-qualified processes (PQPs) and the migration to End-State PQPs project. End-State PQPs require employees to have base competency levels as prerequisites before applying on a selection process. Initial results indicate that the time to staff positions was reduced from 185 days to less than 100 days.
We recruited 298 post-secondary graduates, exceeding our commitment of 275. We also increased our recruitment rate for permanent employees to 8.6% (2,975) from 7.5% (2,544) from the previous year.
Invest in employee development
In 2009-2010, to complement the CRA Learning Policy, a directive and procedures were developed to strengthen the planning, evaluation, and alignment of learning investments with CRA objectives. In 2009-2010, 96% of employees had completed Individual Learning Plans, exceeding last year’s results of 94.5% and our target of 90%.
In 2009-2010, we invested about $146.2 million on learning, with an average of 9.4 days of training per employee. We also increased the intake of new participants in Management Development Programs from 54 in 2008-2009 to 66 in 2009-2010 surpassing our annual commitment of 65.
In addition, we offered a new three-day Management Challenge workshop (Continuing Development Program for Experienced Managers) as part of the Management Learning Program. It contributes to knowledge transfer by allowing executives and senior managers to provide coaching and feedback to managers.
Strengthen information technology responsiveness and sustainability
In 2009-2010, we pursued several priorities to invest proper resources in renewing our applications in order to meet growing business needs and achieve long-term sustainability.
In 2009-2010 we successfully implemented the Corporate Tax Administration for Ontario, Enterprise Content Management, Integrated Revenue Collections, and the Compliance Systems Redesign projects to meet evolving CRA business requirements.
The CRA’s online services continue to gain popularity. In October 2009 we replaced older technology, resulting in significant improvements in system capacity and application stability. This technology will enable us to continue to provide Canadian citizens and businesses with high-level service for Web-based applications. In addition, we implemented environmental upgrades at the CRA’s data centres, while ensuring recoverability efforts continue to meet business requirements for all CRA systems.
During the year, we maintained high levels of availability for the multiple national CRA and Canada Border Services Agency (CBSA) systems, while meeting the challenges of safeguarding our information technology assets from accidental or deliberate security threats. We also worked with the CBSA to ensure that our shared information technology services relationship, the largest within the Government of Canada, continues to be cost-effective for the foreseeable future. In 2009, we completed an external review of the information technology services the CRA provides to the CBSA, and measures have been initiated to strengthen the partnership.
In October 2009, we received two awards from the Government Technology Exhibition and Conference for our information technology achievements. Our information technology strategy focuses on our commitment to sustain and improve our performance by strengthening the governance of our information technology investments and implementing risk management best practices.
We dedicated significant resources to prepare our systems for the 2010 Olympics.
Enhance the security, reliability, and flexibility of our information technology infrastructure and solutions
We further advanced our vulnerability assessment and management capabilities by deploying anti-spyware technology to all CRA workstations. Notably, in 2009-2010 we enhanced our Application Sustainability Program, which allows us to consistently assess and manage the sustainability risk of applications as they age, so that we continue to meet current and future business needs. Enhancements such as these, coupled with the implementation of our multi-year Managed Distributed Environment Program, addressed shortcomings in our computing environment.
Manage protected taxpayer information effectively and securely
The CRA devotes considerable resources and attention to protecting the vast amount of information that individual taxpayers, benefit recipients, businesses, and trusts provide to us. In support of this priority, and to enhance the controls already in place to prevent the inappropriate access and disclosure of information, the CRA began to develop an Identity and Access Management program. We also pursued the modernization of the National Audit Trail System to identify unauthorized access to taxpayer information, and the development of a comprehensive internal fraud control program. These three initiatives will give Canadians further assurance that their information is well protected.
Information integrity and data quality
We developed the CRA Information Management Strategy 2010-2011 to 2012-2013. Developed in consideration of program and service information requirements, as well as legislation and policies governing the management of information, the strategy identifies areas where the CRA’s information management practices are less mature and sets a collaborative change agenda across the CRA to address those areas.
In 2009-2010, we implemented a Data Stewardship program.
Communication
The CRA implemented two advertising campaigns during the past fiscal year; one promoting the Home Renovation Tax Credit (HRTC) from mid-July to mid-November 2009, and one promoting tax relief measures (TRM) from mid-January to late March 2010.
The HRTC campaign was intended to raise awareness about the tax credit and it featured a partnership program in addition to paid mass advertising. This program consisted of point-of-sales displays and HRTC receipt envelopes in the stores of nine major national retail chains that sold home renovation products. Visibility for the ad campaign and its partnership program was so high that an additional 60 chains and individual retailers contacted the CRA to receive partnership materials to display in their stores.
The TRM campaign was intended to raise awareness about the wide range of credits and benefits available to Canadians when they file their tax returns. An evaluation conducted after the TRM ad campaign found that 39% of respondents recalled seeing the advertising. Of those who saw it, 20% conducted home improvements or renovations, 16% applied for the home renovation tax credit, and 14% went online to get more information.
In addition, the first YouTube contest “The Underground Economy: Not your problem?” was launched in 2009 and invited Canadians to create short videos about the negative consequences of participating in, or supporting, the underground economy. By tapping into social networks, the CRA is educating as broad a demographic as possible about non-compliance.

Lessons Learned

What worked well: In 2009-2010, we delivered on our management priorities through timely and responsive decision-making, a fully accountable senior management culture, streamlined management policies and practices, and improved planning and reporting.

What could be improved: In 2009-2010, our challenge was to make the best use of all available resources, from human resources capacity and capability to information technology sustainability and responsiveness to support new and ongoing business needs, and cope with the shifting landscape in which the CRA operates.

Our efforts over the past year in implementing the action plan initiatives demonstrate our commitment to make sure that Canadians have all of the information they need, not only to meet their tax obligations but also to take full advantage of the tax savings to which they may be entitled.

For supplementary information on this program activity, please visit:
www.cra.gc.ca/annualreport

Canada’s Economic Action Plan Initiatives

Through Canada’s Economic Action Plan, the federal government provided significant new personal income tax relief. The measures were effective as of January 1, 2009, and provided benefits particularly for low- and middle-income Canadians.

The CRA implemented many of the action plan initiatives, like personal income tax relief and an increased Working Income Tax Benefit, as well as other measures to help families, seniors, workers, and persons with disabilities. We also administered corporate income tax reductions that were put in place to help Canadian businesses weather the effects of the global economic challenges, to maintain and create jobs, and to emerge from the economic downturn even stronger.

The CRA was provided with $12.3 million in action plan funding, related to the Home Renovation Tax Credit, Home Buyers Tax Credit, late filing and incorrect format penalties and simplification of GST/HST for the direct selling industry. This amount represents only 0.25% of the CRA’s 2009-2010 authorities.

($ millions)
2007-2008
2008-2009
2009-2010
Main Estimates
3,380
3,737
4,388
Planned Spending
3,480
3,875
4,388
Total Authorities
4,560
4,371
4,586
Actual Spending
4,423
4,199
4,407
Canada’s Economic Action Plan
-
-
12

In February of 2009, shortly after the introduction of the Economic Action Plan, our minister announced the launch of the “You’ve earned it. Claim it” advertising campaign to inform Canadians of the tax credits and benefits available to them.

The action plan highlighted the following programs that we administered and delivered on behalf of Canadians.

The Working Income Tax Benefit Program provided a refundable tax credit for eligible working low-income individuals and families who are already in the workforce and encouraged Canadians to enter the workforce.

For the 2009 tax year, the Home Renovation Tax Credit Program provided a non-refundable tax credit for eligible expenses incurred for work performed or goods acquired for an eligible dwelling.

The Canada Child Tax Benefit Program provided a tax-free monthly payment to eligible families to help them with the cost of raising children under the age of 18. Through the Economic Action Plan, the federal government raised the level at which the National Child Benefit Supplement amount for low-income families and the Canada Child Tax Benefit are phased out, so that eligible families with two children received an additional benefit of up to $436 starting in July 2009.

[Footnote 1] Including the $816 million in entitlements to the DTC program, which are delivered through the T1 assessing process rather than as direct cash payments, the total amount of benefits and credits issued is $18.4 billion.