CCRA Risks and Challenges

Six major risks and challenges have implications for our innovation agenda and core operations:

1. Terrorist threats
2. Economic factors
3. Demographic trends
4. Electronic commerce
5. Relationships with the provinces and territories
6. Agency change

Business planning, priority-setting, and the design of future innovations must all be highly responsive to the context in which we operate. There are six key factors at work in the CCRA's operating environment that pose particular risks and challenges, and have a direct bearing on how we are planning to innovate and fulfill our mission of compliance.

Terrorist threats, notably stemming from the events of September 11, have pushed safety and security to the forefront of government priorities. There are major implications for border management, particularly within a North American context. New risk management tools and technologies are required, such as biometric identification, advance transmission of passenger lists, and co-operation between Canada and the U.S. in intelligence, visa issuance, and enforcement. The CCRA's administration of the border and the co-ordination of our work with other government departments in this area, as well as our relations with U.S. border agencies, are now top priorities.

Economic trends associated with the current slowdown, and the anticipated recovery, are influencing workload distribution and compliance risks. There may be more aggressive tax avoidance by some individuals and businesses, while economic hardship will put pressure on accounts receivable and collections. However, increased funding for audit and collections, as a result of the Resource and Management Review, is strengthening our capacity to effectively manage these pressures.

Demographic change, largely as a result of the "baby boom" moving toward retirement, will have an increasingly profound impact on the revenue base of the government and the human resource profile of the CCRA. Shifts in income and consumption patterns across our economy will have an impact on Canada's tax system, putting a premium on the CCRA's ability to respond effectively with the right mix of services and compliance activities. At the same time, our capacity to manage change is directly affected by the expertise of our workforce, of whom approximately 30% will be eligible to retire over the next eight years. We will be under pressure to attract, train, and retain the skilled workers we need.

Electronic commerce is continuing to have a significant impact on the expectations of our clients, and on our ability to enhance the productivity of our operations. Canadians and businesses want faster, better, more dynamic, and customized government services, including from the CCRA. We have introduced an array of electronically enabled service improvements. However this progress will need to be accelerated. Our challenge is to keep pace with the growth in the use of electronic commerce and the ease with which funds can be moved offshore, increasing the risk to Canada's tax base.

Provincial and territorial relations are a key priority for the CCRA. We will need to address significant tax administration challenges to enhance our relationships with these important partners. Provinces have greater tax policy flexibility thanks to the successful implementation of Tax on Income (TONI). Now, the CCRA must focus on administering this innovation to simplify and harmonize tax administration in Canada, as well as continue adding to the tax and benefit services we provide on behalf of the provinces and territories. This must be supported with rigorous and transparent analysis and reporting to demonstrate how we are reducing government overlap and duplication. More recently, a problem was identified in the CCRA's tax accounting system which had resulted in significant overpayments to four provinces under Tax Collection Agreements. The problem was promptly addressed, and corrective action was taken to prevent further overpayments. We are continuing to work with the Auditor General and the provinces on this issue.

Results in administrative and human resources reform and renewal are essential to build the organizational capacity we need to address key challenges and risks in our operating environment and to promote accountability, organizational values, and sound financial management. In particular, managers must have the tools, time, and authority necessary to implement key strategic priorities in this plan, for example in financial management and in human resources, while meeting their operational responsibilities. Our challenge is to achieve the depth of reform necessary to bring about and sustain significant cultural change.

Date modified:

2002-03-21