Innovating for the Future

Our ambitious innovation agenda continues to be about meeting four change objectives:

• To transform our core business in a manner that keeps pace with changes in technology, business, and management practices, and the expectations of Canada;
• To foster human resources reform and renewal by making the agency’s new human resources regime fully operational;
• To achieve administrative reform and renewal by having in place policies and practices tailored to meet the needs of the CCRA; and
• To integrate transparent management for results into the agency’s planning, decision-making, and accountability processes.

Innovation is the key to achieving our strategic outcome of being a leading-edge service organization. In the first year of the planning period, we will allocate $410.2 million (11.1% of our total budget) to our change agenda. A significant portion of this investment will be in technology that will enable us to provide better service to Canadians. Our success in innovation will be measured against performance measures and targets that correspond to client satisfaction. We will also demonstrate our success through specific improvements in the areas of productivity, efficiency, and transparency. The following sections itemize the main activities and initiatives that we expect to deliver during the planning period, given a stable resource base.

Further details on the anticipated results and success criteria for each change objective are contained in Appendix D of this document.

Core Business Transformation

Over the past three years, we have made solid progress in enhancing service to the millions of Canadians and businesses that interact with our organization. Our plans to further transform our core business fall into three key areas: Smart Border Management, Future Directions, and Federal and Provincial/Territorial Relationships.

Smart Border Management

We will continue to implement commitments in the Smart Border Declaration signed with the U.S. on December 12, 2001. The Smart Border Declaration has four goals: the secure flow of goods; the secure flow of people; a secure infrastructure; and co-ordination and information-sharing between Canada and the U.S. in the enforcement of these objectives.

Many of the initiatives we are pursuing were first identified in our Customs Action Plan, which we launched in April 2000. We will achieve the Smart Border commitments by leveraging our expertise in risk management—principally based on self-assessment, advance information, and pre-approval—and by accelerating the following initiatives:

• Advance Passenger Information/Passenger Name Record: permitting the transmission of information about airline passengers and crew prior to the arrival of flights in Canada, permitting the exchange of information on high-risk passengers with our U.S. counterparts.
• Alternative Inspection Services for Travellers, through CANPASS-Highway, CANPASS-Air, NEXUS-Highway, and NEXUS-Air: simplifying and speeding entry at the border for pre-approved, low-risk travellers. CANPASS focusses on entry to Canada and uses state-of-the art iris recognition biometric technology to confirm a traveller’s identity. NEXUS programs are a harmonized approach for controlling entry into either Canada or the U.S; these programs use combinations of dedicated turnstiles and biometric identification at airports, and dedicated lanes at border crossings.
• Harmonized Commercial Processing: speeding clearance and reducing border delays for pre-approved, low-risk truck drivers, carriers, and importers, using modern transponder technology and other innovations to provide advance identification of carriers.

We will pursue other innovations over the planning period, including ways to increase security and efficiency by redesigning ferry terminals and pre-clearing ferry passengers and goods. We will also target higher-risk marine shipments and develop computer models for designing more secure and efficient border crossings in collaboration with Transport Canada. Finally, we will strengthen our efforts to transform our Customs business by upgrading our main operational data system to strengthen our performance measurement capability.

A Vision for the Future of Customs Services

As we work to respond to immediate challenges in our operating environment and to fulfill Canada’s commitments to strengthen border security, we are simultaneously building a cohesive, integrated vision of Customs border management and protection for the 21st century—a vision that focusses on our role within Canada’s law enforcement continuum that will guide our efforts to merge enhanced security and safety measures with state-of-the-art commercial processes. We are working to install and maintain a modern, effective infrastructure that puts our employees at the core.

To that end, we have completed a Job Hazard Analysis and identified a number of initiatives to improve the health and safety of our customs officers. These include ensuring that customs officers receive appropriate tools and equipment—such as batons, pepper spray and protective vests—and that they are fully trained in use-of-force procedures and have quick access to radio communications in the event of an emergency. Implementation of these initiatives in 2003-2004 alone, will involve a $40 million investment. We will also aggressively pursue efforts to apply the Agency Classification System (ACS) to ensure that the work of customs officers is appropriately recognized. We will achieve all of these aims, in large part, by building new, robust partnerships with our unions.

Escalating international tensions continue to influence the Government’s safety and security agenda. They are also likely to have profound and non-discretionary implications over the longer term for Customs’ border protection and security roles. One of our key priorities will be to work with the Government to secure a stable and predictable funding base for these pressures, in-line with Government priorities. We will also work with the Treasury Board Secretariat (TBS) to address regular program pressures that are beyond our control, such as increasing the Customs presence at Pearson International Airport to keep pace with the airport’s expansion.

Exhibit 13 in Appendix D sets out the success criteria we will use to measure the performance of the transformative initiatives we will be pursuing over the planning period in border security and efficiency.

As for financial context, Table 11 in Appendix C details the investments by project that we have made and will make during the planning period for the Customs Action Plan and Canada-U.S. Smart Border initiatives.

Future Directions

Business transformation initiatives under Future Directions focus on facilitating voluntary compliance by tailoring information and services to the needs and requirements of clients or groups of clients. Seven strategic directions emerged during consultations over the past 18 months to develop the Future Directionsagenda. These are:

1. Expanded Electronic Services: aggressively applying technology to the full range of CCRA services, enabling our clients to self-serve where appropriate, and making compliance easier and more convenient. Over the planning period, we will launch a “My Account” Web page that will eventually allow individuals to make their own adjustments on-line. We will also create an on-line portal for tax professionals, enabling them to manage their clients’ accounts on-line, and we will implement a suite of electronic services for large businesses that will support real-time interactions such as status inquiries, transfer of credits, and on-line appeals. Finally, we will link our electronic services to those of other federal departments and levels of government, to contribute to single-window government service delivery for Canadians and Canadian businesses.

2. Account Management Framework: establishing a new capacity to tailor our relationship with a particular client or client group, offering the right mix of services and programs to meet their business needs. For example, we will assign account managers to large businesses to manage their relationship with the CCRA across all agency functions.

3. Customized Approach to Compliance: adopting a client-based approach supported by a fully informed and sophisticated risk management framework that will allow us to: target information and services to meet the particular needs of groups of clients; more effectively apply resources and promote compliance overall; and further improve our verification and collection processes. Our working relationship with clients will be enfluenced by their compliance record and business needs.

4. Strengthened Partnerships and Co-operation: accelerating our efforts to create new opportunities for partnerships with interested provinces, territories, First Nations, and other government departments that will reduce duplication and enable single-window delivery of services, thereby reducing costs for both clients and governments. We will also work to forge stronger relationships with our clients, for example by creating a Tax Professionals Advisory Committee to develop more effective ways to work together.

5. Timeliness: enhancing the timeliness of our activities and transactions across the full range of services we provide, from interpretations and rulings to audits and appeals.

6. Transparency, Clarity, and Simplification: clarifying and simplifying our requirements to increase transparency and public trust, and in so doing, to foster compliance. Efforts will include continuing to improve our ability to communicate using plain language and maintaining multiple channels (i.e., telephone, Internet, and in-person) for client contact. We will also provide clients with clearer explanations about how and why we make a decision, and we will strengthen our ability to be proactive through outreach activities, among others. For example, we will inform businesses about questionable tax schemes we intend to scrutinize and develop processes that will allow businesses to tell us about novel tax plans or arrangements so we can clarify our position early.

7. Workforce Development: supporting our employees by addressing their needs in areas such as hiring, training/learning, and retention; helping them develop a fuller understanding of our client groups and their business needs; and providing more advanced tools and information systems that will help them do their work.

Under Future Directions, we will expand our services to improve client satisfaction, particularly by offering a wider range of electronic self-service options tailored to client needs. In 2003-2004 alone, over 20 individual projects are being undertaken with funding commitments of $40 million. These projects will begin delivering efficiencies, but likely not before 2004-2005.

Exhibit 14 in Appendix D sets out the success criteria we will use to measure our performance in the area of Future Directions. As for financial context, Table 12 and Table 13 in Appendix C detail the investments by project that we estimate we will make during the planning period for Future Directions under our current funding base. Reductions to our funding base that may ensue following the February 2003 Federal Budget may require that adjustments be made to the scope and timing of these commitments.

Federal and Provincial/Territorial Relationships

Strengthening and enhancing our relationships with provinces and territories through an accountable, client-focussed approach has been at the forefront of our priorities. While we have made strides over the past three years, realizing continued progress will pose a significant challenge. Today’s federal-provincial agenda includes many issues of debate—building new partnerships in this climate is a challenge.

Recently, two specific issues affected the CCRA’s relations with provinces and territories. The first, the T3 Trust Accounts issue, caused by an error in our tax accounting system, resulted in significant overpayments to four provinces and initially had a significant impact on their confidence in the CCRA's accuracy. In response, the CCRA launched a comprehensive financial management improvement initiative to address the root cause. A second issue of concern to our partners involves corporate income tax administration, specifically the allocation of income from large multi-jurisdictional firms between provinces and territories. Discussions are well underway to resolve outstanding issues.

Building and sustaining effective partnerships with the provinces and territories remains a high priority for the CCRA. We will continue to work to demonstrate our readiness to take on the administration of additional provincial and territorial programs, as well as those of other federal departments and agencies, where we have the capacity to maintain high service standards and address partners’ concerns. Expanding and developing new co-operative relationships with our partners has significant potential to provide Canadians with better service, reduced costs, and increased efficiencies in program administration.

Over the planning period, we will pursue strategies to develop and expand relationships with our provincial partners. We are expanding our electronic services through the Income Verification Project, which will provide more than 25 provincial and territorial partners with client information via the Internet using file transfer protocol methodology. We are developing business processes to exchange data with Human Resources Development Canada to streamline their administration of federal income security programs for seniors. We will build on the success of our annual reports to the governments of the provinces and territories, with a better accounting to partners on our effectiveness in line with service management framework agreements. We will continue the work on the development of performance evaluation studies in conjunction with our provincial and territorial partners to better measure stakeholder satisfaction for the programs we administer on their behalf.

Exhibit 15 in Appendix D sets out the success criteria we will use to measure the performance of the Federal and Provincial/Territorial Relationships area of this change objective.

Human Resources Reform and Renewal

Our efforts in this area, many of which were initiated when we became an agency and are now well underway, focus on preparing for the retirement of a significant proportion of our workforce in the coming decade, and the need to support significant improvements to our organizational performance. Our priorities are aimed at addressing many of the same challenges currently facing our partner organizations in the Public Service. However, our program of change has foreshadowed and exceeded the Public Service HR modernization initiative in many places.

By 2006, our goal is to have in place an HR system that ensures we have the right people in place at the right time and that our employees are well supported in their professional development and in their workplace. When fully completed, our new HR regime will help increase levels of productivity and generate cost efficiencies, while fostering a forward-looking, adaptable, and client-oriented organizational culture that respects the staffing principles the CCRA adopted when it became an agency.

Over the planning period, we will fully operationalize our new competency-based HR Management System. We will proceed with classification reform by developing a tailored version of the agency Classification Standard for the Programme Administration and Administrative Services groups, converting these two groups into a single Services and Programs group. We will develop a CCRA Organization and Classification Accreditation Program to support our classification program. We will develop a Learning Services Framework and Learning Management System to ensure that 100% of eligible employees have learning plans that are linked to the competencies they are developing. In addition, the system will ensure consistency and relevancy in the planning and evaluation of employee training; contribute to our return on investments in terms of improved performance and cost effectiveness; and, through trend analysis, identify potential solutions to closing organizational competency gaps.

Providing effective and efficient compensation services to our employees is a priority for the CCRA. We will implement simpler, standardized processes to enable timely and accurate delivery of pay by putting in place a technology-based compensation service that is integrated across all human resource functions.

We will also continue work on resolving Corporate Administrative System HR data integrity issues to ensure the availability of accurate and reliable HR information that will facilitate measurement and demonstrate results. Although the planning period will see the completion of the HR reforms we initiated when we became an agency, HR innovations will continue as a normal way of doing business in the years to come. We expect that some of the results of this innovation will be positively reflected in Public Service Employee Surveys for the Agency.

See Exhibit 16 in Appendix D for the success criteria we will use to measure the performance of this change objective. As for financial context, Table 14 in Appendix C details the investments we have made and will make during the planning period in our Human Resources Reform and Renewal initiatives.

Administrative Reform and Renewal

Sound financial management and efficient administration are critical to achieving our innovation strategic outcome and being seen as a leading-edge service provider. Business process improvements, revamped transaction tracking systems, tools, and techniques, and updated internal controls all contribute to reducing our administrative overhead and ensuring our resources are allocated to areas of highest priority. By the end of the current planning period, we anticipate that these efforts will have produced at least $50 million in savings from increased productivity and reduced administrative costs. We also anticipate continued savings in the order of $15 million annually thereafter.

Over 50 initiatives are underway to improve service, streamline administration, reduce costs, and modernize our policies and infrastructure. By the 2003-2004 fiscal year-end, we anticipate that most of our Administrative Reform and Renewal initiatives will be fully implemented. In addition, over the planning period we will establish the most appropriate and cost-efficient approach to deliver transactional services such as those dealing with travel, contracting, and accounts payable—this could include moving to a “shared services” delivery model. We will continue to promote e-procurement and the shift from paper-based to electronic channels for internal and public forms and publications. Finally, we will realign our financial and administrative service delivery structure to put more emphasis on continuous improvement, and we will establish service standards that support results-based management.

See Exhibit 17 in Appendix D for the success criteria we will use to measure the performance of this change objective. As for financial context, Table 15 in Appendix C details the investments we have made and will make during the planning period in Administrative Reform and Renewal.

Transparent Management for Results

Our efforts to transform our core business depend heavily on having in place management approaches and systems that support openness in the way we manage our day-to-day operations and allow us to demonstrate results in terms of service quality and organizational efficiency and effectiveness. Already we have significantly advanced our capacity to achieve management change and measure and report on performance by better aligning our key planning, accountability, and performance reporting instruments, namely the Corporate Business Plan, Balanced Scorecard, and Annual Report. We plan to improve our capacity to: link financial planning and budgeting information with information on program and service delivery; understand costs and cost drivers; identify opportunities for productivity improvements, such as with Activity-Based Costing; and link business results more directly to client satisfaction by introducing, for example, new client-focussed service standards.

Over the planning period we will continue our efforts to support this change objective in the following four areas:

1. Building a Modern Comptrollership capacity: achieving the culture change necessary to ensure that all CCRA managers, not just financial specialists, integrate comptrollership with daily management practices. We will develop communication products and learning tools to increase managers’ awareness and understanding of Modern Comptrollership, and we will use the results of a comptrollership capacity check to develop an action plan that will enable us to achieve the level of comptrollership capacity we are aiming for at the CCRA.

2. Financial accounting and reporting: fully adopting accrual accounting and developing a Financial Management Monitoring Framework, building on the findings of a review initiated by the agency following the discovery of the T3 error that resulted in overpayments to certain provinces. This Framework will provide the agency and its stakeholders with assurance on the integrity and reliability of revenue and expenditure reporting.

3. Resource and cost management: enhancing managers’ ability to analyze the relationships between program spending and results, potentially including the wider application of Activity-Based Costing and by conducting a cost centre review to refine financial coding structures. Data generated by the Activity-Based Costing and Quarterly Budgeting and Reporting exercises in 2002-2003 will be used to produce the financial measures to be included in the Agency’s Balanced Scorecard.

4. Results management and reporting: continuing to shift the organization’s culture toward risk management by integrating it into management processes, and by developing a corporate risk profile and a common risk and control assessment reporting system. In addition, continued efforts to improve our service standards and embed them in performance agreement contracts and the CCRA’s planning, performance, and accountability framework will enhance our performance reporting and enable us to contribute to the government-wide Service Improvement Initiative.

See Exhibit 18 in Appendix D for the success criteria we will use to measure the performance of this change objective. As for financial context, Table 16 in Appendix C details the investments we have made and will make during the planning period in our Transparent Management for Results initiative.

Date modified:

2002-03-21