Audited Financial Statements – Administered Activities

Notes to the Financial Statements – Administered Activities

1. Authority and objectives

The Canada Revenue Agency (the “Agency”), previously named the Canada Customs and Revenue Agency was established as an agent of Her Majesty of Canada on November 1, 1999, under the Canada Customs and Revenue Agency Act (CCRA Act). The CCRA Act, was amended, on December 12, 2005, and renamed the Canada Revenue Agency Act (CRA Act). Originally, the mandate of the Agency was to support the administration and enforcement of tax, customs, and trade legislation as well as other related legislation. As a result of the creation of the Canada Border Services Agency (CBSA) the Agency's mandate regarding the administration of customs legislation is now limited to the collection functions under Part V.1 of the Customs Act. As well, effective August 1, 2005 the Agency provides to the department of Human Resources and Social Development Canada (HRSDC) collection services for certain accounts receivable under various acts. The Agency is a departmental corporation named in Schedule II of the Financial Administration Act and reports to Parliament through the Minister of National Revenue.

The Agency's mandate is to provide support, advice and services when:

(a) supporting the administration and enforcement of the program legislation;

(b) implementing agreements between the Government of Canada or the Agency and the government of a province or other public body performing a function of government in Canada to carry out an activity or administer a tax or program;

(c) implementing agreements or arrangements between the Agency and departments or agencies of the Government of Canada to carry out an activity or administer a program; and

(d) implementing agreements between the Government of Canada and First Nations governments to administer a tax.

The Agency collects revenues, including income and sales taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums, administers tax legislation, delivers a number of social benefit programs to Canadians for the federal government, as well as for provincial, territorial, and First Nations governments and collects amounts for other groups or organizations. It is responsible for the administration and enforcement of the following acts or parts of acts: the Air Travellers Security Charge Act, the CRA Act, the Children's Special Allowances Act, Part V.1 of the Customs Act, section 2 of the Energy Costs Assistance Measures Act, the Excise Act, the Excise Tax Act (including the Good and Services Tax (GST) and the Harmonized Sales Tax (HST) except for GST/HST on imported goods), the Excise Act, 2001, the Income Tax Act, and others.

In the province of Québec, the ministère du Revenu du Québec (MRQ) acts as an agent of the Agency for the administration and enforcement of the GST. The Agency monitors cash transfers made by the MRQ, reports the GST revenues administered on its behalf, authorizes refunds, and transfers funds out of the Consolidated Revenue Fund to the MRQ for the issuing of refunds.

Audited

Date modified:

2006-11-23