Audited Financial Statements – Agency Activities

Notes to the Financial Statements – Agency 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 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 contributions, Employment Insurance premiums, administers tax legislation, and 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: Air Travelers 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 Goods and Services Tax (GST)/Harmonized Sale Tax (HST) except for GST/HST on imported goods), the Excise Act, 2001, the Income Tax Act, and others.

In delivering its mandate, the Agency operates under the following program activities:

(a) Reporting compliance: Ensures complete and accurate disclosure by taxpayers of all required information to establish tax liabilities; increases taxpayers' understanding of their tax obligations through outreach activities, client service and education; identifies and addresses non-compliance through risk assessment, audit and investigation; and establishes strategic partnerships with stakeholders to leverage compliance efforts.

(b) Assessment of returns and payment processing: Provides assistance and information to clients; processes returns for tax programs; registers businesses in Canada; processes, assesses and validates information; establishes and maintains account status; manages excise programs; receives payments; and reviews and assesses business processes of the Agency.

(c) Filing and remittance compliance: Identifies and addresses non-compliance with filing and remitting requirements.

(d) Client assistance: Assists individuals, businesses, charities and registered plans in meeting their obligations under tax legislation by providing information, education and outreach services and by responding to enquiries.

(e) Appeals: Provides a timely and impartial dispute resolution process for clients who disagree with decisions taken by the Agency.

(f) Benefit programs: Delivers certain income-based benefits, credits and other services to low- and moderate-income Canadians on behalf of federal, provincial (except Québec), and territorial governments.

Audited

Date modified:

2006-11-23