Performance by Strategic Outcome

Performance Context: Managing Challenges and Risks

At the CCRA, we are vigilant about managing ongoing risks, while maintaining the capacity to respond to sudden developments in our operating environment over which we have little direct control. In this respect, 2002-2003 was no exception. While international developments contributed to heightened security concerns, pressures on our tax base owing to slower economic growth at home resulted in tighter government finances. The CCRA's new Integrated Risk Management (IRM) framework, coupled with very prudent financial management, provided a sound basis for adjusting agency-wide priorities in light of these emerging events. Although this adjustment of priorities resulted in fewer resources going to some programs than we initially intended, we worked hard to ensure service continuity and overall levels of compliance across all our business lines, while responding to the new challenges.

In view of escalating tensions in the Middle East and the continuing threat of terrorism, enhanced border security remained a priority through 2002-2003. We worked closely with our American counterparts to reinforce border security in response to the United States government's “yellow” and “orange” security alerts. We also set up a Customs Emergency Centre, and worked with provincial, territorial, and municipal officials to develop and test crisis management strategies to deal with situations such as terrorist attacks. As well, the CCRA was a key player in the Task Force on Security at the World Customs Organization. To enhance our internal security, we developed a comprehensive emergency preparedness strategy and an Emergency Management Policy.

One of our ongoing domestic concerns is the way in which the labour market has been changing over the past decade. The growth in self-employment and contract work, particularly, may present tax compliance risks. As more Canadians enter into new work arrangements that are not covered by source deductions, they must take on accounting, reporting, and filing obligations with which they are often unfamiliar. To help them meet these responsibilities, we continue to customize our information services and, wherever possible, simplify procedures to reduce the time and financial costs associated with compliance.

At the international level, global economic integration, the mobility of capital and labour, and the growth of e-commerce pose a worldwide challenge for tax administrations. The proliferation of tax havens, the increased marketing of abusive tax arrangements, and the aggressive pricing of cross-border transactions by some multinational corporations all pose a potentially significant threat to the tax base. Through our tax treaty partnerships and participation in international organizations, we develop international tax strategies and share information and best practices to mitigate the risk of international tax non-compliance.

Fuelled by increasing numbers of registered businesses and the high turnover of businesses in sensitive sectors, these same international developments have made the administration of value-added taxes more challenging. In particular, many countries have reported that value-added tax fraud is on the rise. Canada has not been immune to these developments, and over the past year, the issue of GST fraud has received much publicity. While all tax carries the risk of fraud, we do much to mitigate those risks. We are vigilant in identifying possible fraud and evasion through a variety of means including post-audits, prepayment audits of refund claims, profiles of high-risk registrants, informant leads, and partnerships with other law enforcement agencies. To address the increased potential for GST fraud, we are enhancing our registration reviews to more intensively scrutinize high risk registrants and are making other improvements in our administrative processes and communications. Further, while our past reporting practice met the policy requirements, the CCRA has expanded its reporting of losses due to fraud for all taxes and duties it administers in the Public Accounts of Canada starting in 2002-2003.

Additionally, our outreach programs are aimed at combating the underground economy and increasing compliance both nationally and internationally. These programs help to ensure that the CCRA's international and domestic clients receive accurate information and assistance in understanding their rights and obligations under the Canadian tax system. All suspected cases of fraud are evaluated for prosecution potential and where further investigation reveals sufficient evidence to support a conviction of wilful non-compliance, cases are referred to the Department of Justice for prosecution.

Over the course of the fiscal year, the CCRA continued to explore possibilities for broader partnerships with the provinces and territories and to expand the portfolio of programs we deliver on their behalf. However, relationships between governments are complex. Issues often outside our control may impede efforts to forge new partnerships. Nonetheless, we made some progress in the programs and services we administer and enhanced our capacity to collaborate in the future.

High-profile incidents of unethical or fraudulent behaviour within the public service have reflected poorly on how its values and ethics are perceived. Since much of the CCRA's business is based on voluntary compliance, it is critical that client perception, confidence, and trust in the CCRA be preserved and protected. Unethical behaviour, be it actual or perceived, has the potential to erode compliance. To ensure that our employees act above reproach in all of our operations and that all of our resources are used effectively and ethically, the CCRA reinforced adherence to its Code of Ethics and Conduct for all employees. This code informs employees about the standard of conduct expected of them when performing their duties and ensures that the tradition of integrity and professionalism is carried on and enhanced while reinforcing our commitment to serve the public.

The responsibility for maintaining a high level of values and ethics is nowhere more important than when dealing with the confidential personal information of our clients. The CCRA takes very seriously the right to privacy for Canadian citizens, as well as its obligations under the law for maintaining the confidentiality of information. It is the CCRA's policy to protect the confidentiality of client information and to manage client information in accordance with the provisions of the privacy and access to information laws, the government and the its policies related to security, and the various confidentiality provisions of the legislation it administers. CCRA employees and managers are expected to have a high degree of knowledge about the protection of client information and their roles and responsibilities are clearly detailed in our Policy on the Management of Protected Client Information.

In planning for the future, the CCRA is equipping itself to meet challenges and improve effectiveness by becoming more client-centred. At the same time, we must continually balance our innovation objectives with the need to maintain sufficient resources in our core operations in order to preserve the integrity of our compliance programs.

Date modified:

2003-10-29