Unaudited Supplementary Financial Information

Financial Performance Information - Parliamentary Appropriations

Introduction

This section of the CRA Annual Report to Parliament 2006-2007 provides the details of the Agency’s Resource Management performance for the purpose of reporting to Parliament on the use of appropriations in 2006-2007. This complements the information provided in the spending profile sections under each Program Activity and satisfies the reporting requirements set for departmental performance reports.

Financial reporting methodologies

The CRA’s funding is provided by Parliament through annual appropriations (modified cash accounting basis) and the CRA reports its expenditures and performance to Parliament, together with details on the management of Parliamentary appropriations on the same basis. In addition to the above reporting requirements, the CRA is also required to prepare its annual financial statements in accordance with the accounting principles applied in preparing the financial statements of the Government of Canada (full accrual accounting basis). Accordingly, the audited Statement of Operations - Agency Activities on includes certain items such as services provided by other government departments. A reconciliation can be found on Table 10.

CRA financial information

Activities of the Agency

The Financial Statements - Agency Activities reports $3,201.6 million as total Parliamentary appropriations used (Note 3 b on shows the reconciliation to the net cost of operations). The difference from the $3,405.1 million reported in this section is explained by three items reported in the Financial Statements - Administered Activities: the Children’s Special Allowance, $197.8 million; the Energy Costs Assistance Measures expenses, $4.1 million; and the Relief For Heating Expenses, $1.7 million (part of Vote 1, Program Expenditures).

Overview

For 2006-2007, Parliament approved planned spending for CRA in the amount of $3,228.3 million through the Main Estimates, as shown in CRA’s Corporate Business Plan 2006-2007 to 2008-2009.

The 2006-2007 Main Estimates have been adjusted to include:

• $158.0 million for the Carry-forward from 2005-2006;
• $59.6 million for Collective Agreements, mainly due to the CRA/PIPSC agreement signed in August 2005;
• $58.8 million for Maternity and Severance payments;
• $38.3 million increase for Respendable Revenue adjustment for information technology services provided to Canada Border Services Agency (CBSA);
• $30.6 million for Budget measures arising from the 2006 Federal Budget;
• $18.2 million for National Collection Services and Collection Litigation and Advisory Services;
• $16.4 million for Universal Child Care Benefit;
• $13.9 million for the implementation of a single administration of corporate tax for the Province of Ontario;
• $12.4 million for Payments to Private Collection Agencies;
• $10.8 million increase for the Children’s Special Allowance Statutory Authority;
• $9.3 million for the preparation, implementation and administration of the 2006 Canada United States Softwood Lumber Agreement;
• $5.9 million for the National Initiative to address inter-provincial tax avoidance by corporations;
• $4.1 million for Energy Cost Assistance Measures Statutory Payments; and
• $1.2 million for the administration of the one-time Energy Cost Benefit payments.

Offsetting these increases, the CRA returned $24.3 million in funding to the Treasury Board pending the approval of the Offshore Trusts Initiative legislation and some $7.8 million related to Expenditure Review Initiatives and Spending Restraint Measures. Agency Budgets were also adjusted by $8.3 million for Employee Benefits Plans reductions. This resulted in total approved authorities of $3,625.8 million for 2006-2007, representing an in-year increase of 12.3% over the Main Estimates.

Of the $3,625.8 million total authority, CRA’s actual spending totalled $3,405.1 million resulting in $220.7 million unexpended at year-end. After adjusting for technical items such as a TB directed lapse of $37.1 million for CPP/EI activities, an under-expenditure of $0.5 million related to the Charities contribution program, and a TB directed $15.4 million reversal of payments to the Department of Justice in 2006-2007, the remaining $167.7 million is available for use by the Agency in 2007-2008. This amount is within 5% of the total authority.

The $167.7 million carry forward to 2007-2008 will be directed primarily to selected strategic investments linked to Agency priorities from the Agency 2010 Blueprint such as:

• Focusing on Core Business, $94 million (GST/HST Redesign, Integrated Revenue Collections, Compliance Systems Redesign, Identification Renewal Project, Corporate Tax Administration for Ontario, and Advanced Pricing Agreement);
• Strengthening Core Infrastructure, $13.6 million, through investments in Network Services enhancements, Enterprise Tape Technology and Data Centre Facilities;
• Maintaining Trust and Integrity, $30.9 million, via investments in Service Redress, Secure Channel, and Data Centre Recovery, and funding increased workload in Legal Services;
• Managing Human Resources and Labour Relations, $5.4 million; various Business Development initiatives, $7.4 million; and
• Payments for the federal sales tax administration by the Province of Québec, $16.1 million.

Revenues administered by the Agency

Net revenues administered by the CRA totalled some $275.4 billion, an increase of 6.8% from the $257.9 billion administered in 2005-2006.

Date modified:

2007-11-01