Prepared for the:
Canada Revenue Agency
March, 2014
Contract Number: 46558-144267/001/CY
Contract Award Date: March 27, 2013
Project Cost: $52,902.09 (HST included)
POR Number: 063-12

Prepared by:
Phoenix SPI

For further information:
Media Relations
Canada Revenue Agency
4th Floor – 555 MacKenzie Avenue
Ottawa, ON K1A 0L5
Media.relations@cra-arc.gc.ca

Executive Summary

Phoenix SPI was commissioned by the Canada Revenue Agency (CRA) to undertake qualitative research related to potential new secure online services for taxpayers that would be available through the CRA Web site. The Agency wanted to better understand Canadians' use of electronic services, the extent to which they want to interact electronically with the CRA, and the enablers and obstacles to increasing the take-up of the Agency's secure online services. The target audiences were: 1) individual taxpayers and benefit recipients that are registered and using the My Account service via the CRA Web site; and 2) individual taxpayers and benefit recipients who do not currently make use of CRA online services.

Methodology

To address the research objectives, qualitative research in the form of focus groups was undertaken as follows:

Four in-person focus groups were conducted in two locations - Toronto (English) and Montreal (French) - with individuals who did not deal with the CRA online (at the time of the research).
Three online focus groups were conducted with individual taxpayers (two in English, one in French) who were enrolled and using the CRA's online services for individuals in My Account (at the time of the research).

The results will be used by the CRA: 1) to prioritize and customize its electronic offerings to meet the needs of these specific audiences; 2) assist in the continued development and delivery of Agency-wide solutions to submit documents online and manage online mail; and 3) assist in the design and marketing of the CRA Web site and online services to these audiences.

Key Findings

• Most participants thought they would probably use "Submit Documents".
• Most participants would accept the use of email notifications to alert them to new CRA correspondence.
• Very few were interested in making online payments directly to the CRA, as opposed to online through a financial institution.
• Interest in setting up a pre-authorized payment plan with the CRA was also very limited.
• Those who are using the CRA's online services were generally quite enthusiastic about the services.

Current Processes Related to CRA Correspondence

Most participants typically use the telephone when they need to contact the CRA for one reason or another. They prefer the telephone as a service channel because they feel that the information available on the CRA's Web site is not specific enough (given that they typically contact the Agency about a matter that concerns them personally). In other words, in their view, the level of specificity they tend to require can only be obtained by contacting the Agency by phone. Other service channels used by a small number of participants included the CRA Web site, regular mail, fax, and email.

Many participants prepared their 2012 tax return electronically, using some type of tax software. The rest, slightly more than half, filled out their tax return long hand. Compared to participants who have not registered for My Account, My Account users (were more likely to have prepared their tax return electronically, using TurboTax, UFILE, Quick Tax, or H&R Block's online tax preparation program. In fact, only a few My Account users said they prepared their 2012 tax return using the paper forms. As expected, the method participants used to submit their 2012 tax return generally mirrored the method used to prepare the tax return.

Most participants said they store information and documents related to their annual income tax filing in physical format. By this they meant hard copy/paper copy retained in folders and/or filing cabinets. This was the case for My Account users, as well as taxpayers and benefit recipients who do not interact online with the CRA. The main reasons offered for storing paper copies of tax-related documents were convenience, habit, as well as safety and security. Participants routinely said that they find it easier to have paper copies on hand, that they continue to use a paper-based storage system as a matter of habit (i.e., they have not considered an alternative to paper files), and that they are concerned about exclusively electronic storage because a computer virus or technical problem could destroy or prevent access to their documents.

Reaction to "Submit Documents" Online Service

Impressions of the "Submit Documents" online service were generally positive, with some participants mentioning that it looks "convenient", "quick", "user-friendly", and "easy to use". Although no one had a negative reaction to the service, a few participants were indifferent or neutral when asked for their impression. These individuals noted that there appears to be a lot of steps involved in the "submit" process, wondered whether the requirement to have a scanner would exclude some groups from using the service, or wondered about the security/privacy of the system.

Underscoring their positive reaction to the service, participants readily pointed to a number of perceived advantages or benefits of using the service. The main reasons included speed and ease of accessing tax-related information, general convenience (i.e., their personal account can be accessed from anywhere at any time), cost-savings to the extent that stamps and envelopes are not needed, and confirmation or proof of receipt (which is not available when using regular mail to submit documents).

Despite their generally positive reaction to the service, as well as the list of perceived benefits or advantages they attributed to the service, participants identified several drawbacks or concerns related to using the service. The only concern mentioned with some frequency, however, was security of personal information. Participants queried the secureness of the service and wondered about the potential for security breaches and loss of privacy.

Most participants thought they would probably use the "Submit Documents" online service. Among these participants, there was a clear consensus that this would be a useful new service. Those who definitely would not use the service provided the following reasons to explain why:

• they prefer paper to online methods,
• worry about making a mistake,
• perceive themselves as too old or technically inexperienced to use the service,
• feel they have no need to use the service, or
• do not want another service that requires login credentials.

Reaction to Manage Online Mail Service

Most participants reacted positively to the possibility of viewing correspondence from the CRA online. Positive reaction to this service was highest among My Account users, with all of these participants expressing interest the service. Among these participants, there was a clear consensus that this would be a useful new service. Participants who do not deal with the CRA through My Account were somewhat divided in their reaction to the proposed service. Although a majority expressed at least moderate interest in the service, some had little or no interest in viewing correspondence from the CRA online.

When asked why they would be interested in using the service, participants routinely mentioned speed of accessing correspondence and the need for less paper. Participants clearly saw this service as one that would speed up their interactions with the CRA by eliminating the intermediary, the postal service, and that would reduce the amount of paper correspondence they need to file.

Initial reaction to the use of email notifications was divided. Some participants considered an email notification to be integral to the service. Without a notification system, the onus would be on taxpayers to log into their account on a regular basis to avoid missing important tax- or benefits-related notices. Conversely, others expressed concerns about spam and email "inbox overload". They pointed to the large volume of email they receive each day, and said they would be afraid of overlooking or missing a notification from the CRA. Most participants, on balance, would accept the use of email notifications to alert them to new CRA correspondence.

Suppression of Paper

Many participants agreed they would not want or need a paper copy to be sent in the mail by the CRA if they could view their correspondence from the Agency online. For the most part, those who would still want a paper copy tended only to want a paper copy of what they described as "important" documents. This includes notices of assessment, notices of re-assessment, and any correspondence related to amounts owing.

Many, though fewer than half of those who expressed interest initially in the service, would still register for it even if it meant they would no longer receive correspondence from the CRA by mail. Participants who would not be interested in the online service if they no longer received a paper copy of their correspondence pointed mainly to the possibility of missing important correspondence from the CRA for one reason or another, and having a technical problem as reasons to explain why.

Reaction to Online Payment Options

Interest in making online payments directly to the CRA, as opposed to online through a financial institution, was limited. Very few participants said they would consider making (or have made) online payments directly to the CRA. There was a clear desire to have their financial institution involved in the payment process. Not surprisingly, there was also very limited interest in setting up a pre-authorized payment plan with the CRA. When asked to explain why, participants were most apt to point to the desire to control how and when they pay their bills so they are better able to budget and avoid a situation where they have insufficient funds to cover a payment. In addition to these reasoned explanations, other participants were simply opposed to giving the CRA any form of access to their bank account. Some expressed their opposition as apprehension or serious misgivings, while others did so as clear, categorical opposition to a pre-authorized payment plan with the CRA.

Conclusions and Implications

The findings from this research indicate that most participants would be interested in interacting with the CRA through the "Submit Documents" online service as well as the manage mail online service. Increased speed and convenience in dealing with the CRA stand out as the main perceived benefits of both services, and therefore the main reasons for adopting them. Interest in the expanded functionality of the CRA's online payment options was very limited, however.

As the CRA prioritizes it electronic offerings, therefore, it may wish to focus efforts and resources on the continued development and delivery of solutions to send and receive correspondence online. Not only do these services appeal to My Account users, they are also viewed as useful by taxpayers and benefit recipients who do not currently interact with the CRA online. More importantly, the findings suggest that the availability of these services might encourage many participants who use traditional service channels, such as phone and mail, to deal with the CRA to at least consider online interaction with the Agency.

Regarding the suppression of paper correspondence, the findings indicate that taxpayers and benefit recipients, whether they currently interact with the CRA online or not, have concerns about no longer receiving correspondence from the CRA by mail. They worry that if they receive tax-related correspondence only online they might accidently miss or ignore something important.

Finally, turning to marketing, there was a clear desire among both My Account users and non-users for these new online services to be better promoted by the CRA. Participants repeatedly suggested that the CRA should advertise or communicate with Canadians about the new services, especially since many were not even aware of the Agency's current online services. Among those who do not interact with the CRA online, many were aware of My Account by name, but most knew very little about what can be done through the service.