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Chapter 2 – Agency 2010: A Blueprint for the Future

The Evolution of the CRA

Parliament created the Canada Customs and Revenue Agency (CCRA) in 1999 (on December 12, 2003, the Government transferred the customs function of the CCRA to the Canada Border Services Agency/CBSA) to meet three objectives:

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

Consolidating service delivery in the CRA reduces government duplication and makes it simpler and easier for individuals and businesses to meet their tax obligations and receive benefits.

The Agency’s unique governance model and powers were designed to help accomplish these objectives. It has a Minister, Board of Management, and Commissioner/Chief Executive Officer, each with distinct responsibilities and accountabilities, and it has been vested with full responsibility for human resources (HR) management, administrative matters, real property, procurement, and contracting.

During its first five years, the Agency focused on implementing the governance model and overhauling HR and administrative policies and systems. The result is that the CRA is now a strong, flexible, efficient, and accountable organization that is well managed. As a consequence, the Agency now has a solid and secure base from which to continue developing into an agency that operates nationwide and serves an increasing number of clients.

This section of the Report on Plans and Priorities sets out “Agency 2010”—a vision for the Agency which will guide our progress and focus our efforts over the next several years.

Agency 2010 – Realizing the Full Potential of Agency

Tax and benefits systems that function well are fundamental to the economic, fiscal, and social health of a nation. Ensuring that these systems are administered as efficiently and effectively as possible is an objective that is shared by all levels of government.

Empowered by unique governance features and authorities, the CRA has become a highly efficient and accountable multi-jurisdictional administrator of tax, revenue, and benefit programs. By operating as the interface between governments and taxpayers and benefit recipients, the CRA has been able to integrate information, improve services to Canadians and lower the cost of administration for governments.

The demand for CRA services has been growing steadily, primarily because the CRA’s competitive advantages makes economic sense for our clients. Taxpayers, especially businesses, find it much more effective to deal with a single payment process or single auditor for all their taxes, benefits and related issues.

CRA Interface - Tax and Benefits Administration

In providing the interface between its clients and taxpayers/benefit recipients, the CRA may also work with partners. Partners are defined as: “authorities with whom the Agency collaborates on various issues for mutual benefit or to attain a common objective, but for whom the Agency does not provide a service as defined in its core business activities”. Partners include international associations, treaty partners, foreign countries, and provincial and territorial governments.

The Three Strategic Themes of Agency 2010

In many respects, the CRA is already an organization with a coast-to-coast-to-coast presence and approach to its operations. Relying on a Canada-wide service delivery network and distributed processing operations, the Agency handles revenue collection and benefit administration at the federal level, and within provincial, territorial and First Nations jurisdictions to varying degrees. The Agency intends to further increase its national presence, and enhance its accountability to clients through better reporting performance and increased responsiveness.

This approach will allow the CRA to realize fully the objectives established for the Agency in 1999, and Canadians will benefit from improved and integrated services and more efficient, effective program delivery. As an organization that operates nationwide, the CRA will become the key interface between citizens and their governments and tax and benefits administration will be simplified.

Over the coming years, the CRA will pursue a strategy based on three themes:

1. a core business capacity that is well-defined, modern, and high-performing;

2. a governance model that reflects the best possible blend of autonomy and accountability, rigour and sensitivity; and

3. the pursuit of business opportunities which the Agency could deliver on behalf of its clients.

1. Strong and Modern Core Business

Strong and Modern Core Business

CRA’s Core Business: Tax and Benefits Administration, Revenue Collections

Core Business & Clients
Human Resources & Labour Relations

Defining core business will establish the scope of opportunity that exists for the Agency and ensure that growth is aligned with core strengths. Understanding the needs of clients and the CRA’s obligations to them, serves as the basis for establishing expectations and accountabilities.

Infrastructure is the foundation of the Agency and includes our workforce, technology, and physical assets. Various actions will be taken to strengthen the CRA’s infrastructure over the coming years.

Trust is integral to client and public confidence in the Agency. It is a fundamental pillar upon which strong relationships are built and maintained. The CRA will continue to give paramount attention and importance to maintaining the integrity and fairness of the tax system.

Human resources and labour relations are two of the Agency’s positive attributes. They represent the first step toward the future of the CRA’s workforce. The CRA will develop and implement a comprehensive Workforce Strategy in support of Agency 2010.

It is imperative that we concentrate on the core business of the Agency, maintain, and where necessary strengthen, the critical elements that support it. The evolution of the Agency can succeed only if its principal focus remains on what it is mandated to do by law, and what it does best.

a) Focusing on Core Business

The core business of the CRA is tax administration, revenue collection, and benefits administration. This is where our expertise lies and where we will concentrate our efforts as we identify opportunities to grow the programs and services that we deliver. Effective compliance and service delivery are key elements to the core business. The Agency will continue to strive for excellence in service delivery and compliance, as we did in the first five years of the Agency’s existence.

To support its core business, the Agency has, over the years, developed particular capacities in:

  • efficient and effective high-volume processing;
  • state-of-the-art electronic service options;
  • strong data management;
  • excellence in risk-based compliance; and
  • fairness and integrity in administration.

b) Strengthening Infrastructure

The Agency has a large, well-trained, and experienced workforce, extensive regional operations (with 78 percent of its workforce distributed across Canada), one of the largest information technology bases in the country, and a strong management cadre. The CRA infrastructure is the foundation on which our core business is built and operates. Over the next several years, we will further strengthen this infrastructure by:

  • investing strategically in technology;
  • investing in the skills and development of our workforce, and in a strong management cadre; and
  • ensuring that our physical and management infrastructures evolve in line with our business model and service channel strategy for 2010.

These measures will ensure that the Agency has the capacity to deliver high quality and cost effective programs and services. They will also ensure that the CRA can attract, maintain, and retain a highly skilled and motivated workforce.

c) Maintaining Trust

Taxpayers’ trust in the integrity and fairness of tax administration is critical to our self-assessment system, because without it, non-compliance would certainly increase. Over the next several years, we will continue to give paramount attention and importance to maintaining the integrity and fairness of the tax system. Specifically:

  • As part of any new program delivery arrangements with various clients, we will ensure that we fully protect and guard the confidentiality and privacy of information in accordance with Canadian law.
  • We will invest in the security of our operational and IT systems.
  • We will continue to improve our knowledge of non-compliance and our ability to target areas of highest risk, thereby contributing to the fairness and integrity of the tax system.
  • We will reinforce trust in the organization by proceeding with enhancements to the collections program, including proceeding with the Integrated Revenue Collections project, to better manage the level of tax debt.

d) Managing Human Resources and Labour Relations

During its first five years, the Agency completely revamped policies, procedures, systems, and structures in such areas as staffing, classification, compensation, and labour relations. Most of the new systems have been put in place. Over the next several years, a comprehensive Workplace Strategy will be developed and implemented in support of Agency 2010.

The overhaul was undertaken in consultation with the unions. The Agency is working hard at a constructive and respectful relationship with the unions, the Public Service Alliance of Canada (PSAC) and the Professional Institute of the Public Service of Canada (PIPSC) and intends to further strengthen the existing spirit of co-operation across the country through a variety of union-management initiatives.

2. Mature the Governance Model

Mature the Governance Model

Governance in the CRA comprises the exercise of legislated authority through the structure and
processes established among the Minister, Board of Management, and Commissioner
as well as other government entities.

Roles & Responsibilities
Agency Management

The Minister, Board of Management, and Commissioner play pivotal roles in the Agency’s governance model. More clearly defined roles and responsibilities would advance their relationship, and strengthen accountability in the future.

The Agency is accountable to Parliament and central agencies, but also must report on performance and be responsive to the needs of its clients in other government administrations. There is a need to better define respective roles to improve the accountability of the Agency to its clients.

The Agency’s broader governance model includes management practices, decision-making processes, committee structure(s), and its organizational culture. These are important management attributes that must keep in step with the maturation of the CRA’s governance model.

The CRA has a unique governance model that differs markedly from that of its predecessor, Revenue Canada, as well as the regimes of other federal/provincial departments and agencies. A tax administration such as the CRA needs to demonstrate impartiality in applying legislation, as well as sensitivity to ensure that taxpayers receive the full benefit of the law. It needs to ensure rigour and probity in the handling of public monies and information, and professionalism and accountability.

The governance model assigns roles, responsibilities, and accountabilities to the Minister, Board of Management, and Commissioner/CEO.

  • The Minister provides the ultimate challenge function to the Agency (other than through the courts), ensuring that legislation has been applied fairly but with sensitivity, and that taxpayers have received the full benefit of the law. The Minister is also accountable to Parliament for the administration of program legislation.
  • The Board of Management is responsible for ensuring the rigour and probity of the CRA’s human resources and administrative systems. It is accountable to Parliament (through the Minister) for the administration of the human resources, administrative, real property, procurement, and contracting authorities that are vested in the Agency.
  • As the CRA’s Chief Executive Officer, the Commissioner is accountable to the Minister of National Revenue for the day-to-day administration and enforcement of program legislation that falls under the Minister’s delegated authority. In this regard, the Commissioner is also accountable to the various levels of clients—including provinces and territories—for the programs and legislation administered on their behalf. In addition, the Commissioner is accountable to the Board of Management for the daily management of the CRA, supervision of employees, and implementation of policies and budgets.

The adoption of the CRA’s Governance Model has produced significant results, as documented in our annual reports, and the comprehensive five-year report tabled in Parliament in May 2005. The Auditor General has commented positively on the nature of these reports to Parliament. Accountability to Parliament and the provinces/territories has been greatly enhanced. We have adopted a code of values and ethics that stresses sensitivity in dealings with taxpayers and benefit recipients, and ensures probity and rigour in our internal systems. The Agency is subjected annually to over 135,000 hours of audits from various sources and all the final audit reports are posted on the Agency’s Web Site.

During the next several years, we will:

  • further enhance the accountability of the Agency to all its clients through better performance reporting and increased responsiveness to their specific needs.

3. Expand Business Opportunities

Expand Business Opportunities

By seeking new business opportunities that are aligned with its core business capacity, the CRA will strengthen the coherence and efficiency of tax, revenue, and benefits administration in Canada to the benefit of its clients, taxpayers and benefit recipients.

Business Development Capacity
Agency Business Model
Growth Strategy and Plan
Client Relationship Management

A focal point for business development within the Agency is essential for the establishment and execution of a co-ordinated, whole-of-Agency approach to the identification and pursuit of business opportunities.

Articulation of our 2010 business model will provide the CRA, as well as its current and future clients, with a clear understanding of our approach to program and service delivery.

Sound business strategies and plans will allow the CRA to systematically pursue and attain new business.

Meeting clients’ needs is critical to business growth. To truly excel at managing clients’ needs and expectations, the CRA will redefine and renew its client relationships.

The CRA believes that it offers competitive advantages. If seized upon, these will provide citizens with better service, lower cost administration, and more effective compliance.

  • As an organization operating in all regions of the country, the Agency has nationally standardized administration and service delivery, which ensures equitable treatment. Throughout Canada, our approach is consistent on matters such as compliance activities, service standards, workflows, information management, IT solutions, and program administration. This approach is beneficial to potential clients: they can be confident that their programs will be administered efficiently and according to the norms and standards they have established.
  • The sheer scale and volume of the Agency’s processing and transactions allow us to benefit from significant economies of scale, which we share with our clients. In addition, because of its size, the Agency has the investment capacity to maintain a suite of modern tools, systems, and IT solutions.
  • The Agency has a well-deserved reputation for depth and range of expertise, both technical and managerial. In a knowledge-based economy, this is a significant advantage and a strength that we can provide to our clients.

A business development strategy based on the CRA’s advantages also enables the Agency to attract and retain an experienced, knowledgeable workforce across Canada.

The Way Forward

While the work of implementing Agency 2010 will extend over the next several years, we intend to aggressively pursue several activities in the short term. Their success is fundamental to the longer-term evolution into an agency that extends coast-to-coast-to-coast. Over the next three years, we will undertake the following activities:

1. Clearly articulate the “value proposition” advanced by the Agency: effectiveness and responsiveness for clients (with clear accountabilities) and a simpler, less burdensome interface for Canadians, through the integration of programs and services.

2. Clearly define our core business, along with the competencies that enable us to perform at an optimal level.

3. Analyze the potential market for CRA (referring to our core competencies and core business expertise). This will include various governments and, where appropriate, government-funded or managed entities (e.g., Workers’ Compensation Boards).

4. Identify how we will build and put into operation a business development capacity to manage the strategic interface and overall relationship with clients.

5. Develop a communication strategy that repositions the Agency as a valued nationwide institution and advances our reputation as an effective, responsive and trustworthy organization.

6. Refine the governance model to reflect the maturing and strengthened capability of the Board of Management. The updated model will include a reinvigorated integrated risk management function.

7. Strengthen accountability frameworks for existing and new clients through customized accountabilities and enhanced information/reporting systems.

8. Provide increased service standards and improve upon the current avenues of rights and appeals for clients and taxpayers.

9. Develop a plan to ensure our infrastructure is aligned with Agency 2010, including:

  • geographic footprint
  • a balanced distribution of the workforce in headquarters and regions.

10. Establish an investment plan for increased flexibility and mobility regarding our:

  • workforce
  • technology
  • physical assets.

The table on this page highlights the key activities we will pursue over the next several years as we move to become a nationwide agency.

Agency 2010 - Implementation at a Glance

For the tax, revenue collection, and benefit programs that we deliver now or in the future, we will serve as the key interface between governments and the individuals, businesses, benefit recipients, charities, and trusts served by those programs. This interface will broaden, deepen, and become more important as we take responsibility for new programs. The efforts to solidify our position as an agency that operates nationwide will benefit both our clients and the citizens they serve; governments will enjoy lower administration costs and more effective compliance; citizens will receive more comprehensive, better-integrated services that are simpler for them to use and lighten their compliance burden. In short, both governments and Canadians will be winners.