Annual Report to parliament 2010-2011
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Statement of Management Responsibility Including Internal Control Over Financial Reporting
We have prepared the accompanying financial statements of the Canada Revenue Agency according to accounting principles consistent with those applied in preparing the financial statements of the Government of Canada. Significant accounting policies are set out in Note 2 to the financial statements. Some of the information included in the financial statements, such as accruals and the allowance for doubtful accounts, is based on management’s best estimates and judgment, with due consideration to materiality. The Agency’s management is responsible for the integrity and objectivity of data in these financial statements. Financial information submitted to the Public Accounts of Canada and included in the Agency’s Annual Report, is consistent with these financial statements.
To fulfill its accounting and reporting responsibilities, management maintains sets of accounts which provide records of the Agency's financial transactions. Management also maintains financial management and an effective system of internal control over financial reporting (ICFR) that take into account costs, benefits, and risks. They are designed to provide reasonable assurance that transactions are within the authorities provided by Parliament, and by others such as provinces and territories, are executed in accordance with prescribed regulations and the Financial Administration Act, and are properly recorded to maintain the accountability of funds and safeguarding of assets.
Financial management and internal control systems are reinforced by the maintenance of internal audit programs. The Agency also seeks to assure the objectivity and integrity of data in its financial statements by the careful selection, training, and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, by communication programs aimed at ensuring that its regulations, policies, standards, and managerial authorities are understood throughout the organization, and by conducting an annual assessment of the effectiveness of its system of ICFR. An assessment for the year ended March 31, 2011 was completed in accordance with the Policy on Internal Control and the results and action plans are summarized in the annex.
The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. The effectiveness and adequacy of the Agency’s financial management and its system of internal control are reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Agency’s operations and by the Board of Management which is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control and exercises this responsibility through the Audit Committee of the Board of Management. To assure objectivity and freedom from bias, these financial statements have been reviewed by the Audit Committee and approved by the Board of Management. The Audit Committee is independent of management and meets with management, the internal auditors, and the Auditor General of Canada on a regular basis. The auditors have full and free access to the Audit Committee.
The Auditor General of Canada conducts independent audits and expresses separate opinions on the accompanying financial statements which do not include an audit opinion on the annual assessment of the effectiveness of the Agency’s internal controls over financial reporting.
Linda Lizotte-MacPherson
Commissioner and Chief Executive Officer
Filipe Dinis
Chief Financial Officer and Assistant Commissioner, Finance and Administration
Canada Revenue Agency Audited Financial Statements – Agency Activities
INDEPENDENT AUDITOR’S REPORT
To the Board of Management of the Canada Revenue Agency and the Minister of National Revenue.
I have audited the accompanying financial statements of the Agency Activities of the Canada Revenue Agency, which comprise the statement of financial position as at 31 March 2011, and the statement of operations, statement of equity of Canada and statement of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
In my opinion, the financial statements present fairly, in all material respects, the financial position of the Agency Activities of the Canada Revenue Agency as at 31 March 2011, and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.
John Wiersema, FCA
Interim Auditor General of Canada
30 August 2011
Ottawa, Canada
Statement of Financial Position – Agency Activities
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Accounts receivable and advances (Note 4)
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Capital assets (Note 5)
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Accounts payable and accrued liabilities (Note 6)
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Lease obligations for capital assets (Note 7)
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Contingent liabilities (Note 13), contractual obligations (Note 14) and Net Debt indicator (Note 15) |
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Statement of Operations – Agency Activities
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EXPENSES (Note 9)
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NON-TAX REVENUE (Note 10)
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Statement of Equity of Canada – Agency Activities
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Services received without charge from other government agencies and departments (Note 11)
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Statement of Cash Flow – Agency Activities
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Amortization of capital assets (Note 5)
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Services received without charge from other government agencies and departments (Note 11)
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Notes to the Financial Statements
The Canada Revenue Agency (the “Agency”) is an agent of Her Majesty in right of Canada under the Canada Revenue Agency Act. 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 mandate of the Agency is to support the administration and enforcement of tax legislation as well as other related legislation. The Agency provides support, advice, and services by:
- supporting the administration and enforcement of program legislation;
- implementing agreements between the Government of Canada or the Agency and the government of a province, territory or other public body performing a function of government in Canada to carry out an activity or administer a tax or program;
- 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
- implementing agreements between the Government of Canada and First Nations governments to administer a tax.
The Agency collects revenues, including income and sales taxes 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, including Canada Pension Plan (CPP) contributions. It is responsible for the administration and enforcement of the following acts or parts of acts: the Air Travellers Security Charge Act, the Canada Revenue Agency 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) and the Harmonized Sales Tax (HST) except for GST/HST on imported goods), the Excise Act, 2001, the Income Tax Act, the Softwood Lumber Products Export Charge Act, 2006, the Universal Child Care Benefit Act, and others including various provincial acts.
In delivering its mandate, the Agency operates under the following program activities:
- Internal services: Provides internal services across the Agency, such as human resources management, financial management and information technology, to support the needs of programs and corporate obligations;
- Reporting compliance: Verifies complete and accurate disclosure by taxpayers of all required information to establish tax liabilities;
- Assessment of returns and payment processing: Processes and validates taxpayer returns; registers, establishes, and maintains taxpayer accounts; and, receives payments;
- Accounts receivable and returns compliance: Identifies and addresses non-compliance with taxpayer filing and remittance requirements;
- Taxpayer and business assistance: Assists taxpayers in meeting their obligations under the self-assessment;
- Appeals: Provides a dispute resolution process for taxpayers who disagree with decisions taken by the Agency;
- Benefit programs: Provides Canadians certain income-based benefits, credits and other services on behalf of federal, provincial (except Québec), and territorial governments;
- Taxpayers’ Ombudsman: Addresses requests for reviews made by taxpayers and benefit recipients with respect to service matters.
For financial reporting purposes, the activities of the Agency have been divided into two sets of financial statements: Agency Activities and Administered Activities. The financial statements - Agency Activities include those operational revenues and expenses which are managed by the Agency and utilized in running the organization. The financial statements - Administered Activities include those revenues and expenses that are administered for someone other than the Agency, such as the federal government, a province or territory, or another group or organization. The purpose of the distinction between Agency and Administered activities is to facilitate, among other things, the assessment of the administrative efficiency of the Agency in achieving its mandate.
As required by the Canada Revenue Agency Act, the financial statements - Agency Activities have been prepared using accounting principles consistent with those applied in the preparation of the financial statements of the Government of Canada. The accounting principles used are based on Canadian generally accepted accounting principles for the public sector, except as disclosed in Note 15 - Net Debt Indicator. A summary of significant accounting policies follows:
The Agency is financed by the Government of Canada through Parliamentary appropriations. Accounting for appropriations provided to the Agency does not parallel financial reporting according to Canadian generally accepted accounting principles, as they are based in large part on cash flow requirements. Consequently, items recognized in the Statement of Financial Position and the Statement of Operations may be different from those provided through appropriations from Parliament. Note 3(b) provides a high-level reconciliation between the two bases of reporting. The planned results in the Statement of Operations are the amounts reported in the future-oriented financial statements included in the 2010-2011 Report on Plans and Priorities.
The Agency operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash receipts are deposited to the CRF and all cash disbursements are paid from the CRF. The net cash provided by government is the difference between all cash receipts and all cash disbursements including transactions with departments and agencies.
Expenses are recognized when goods are received and/or services are rendered.
Estimates of the cost for services received without charge from other government agencies and departments are included in expenses.
Non-tax revenue is recognized when the services are rendered by the Agency.
Amounts due from the CRF are the result of timing differences between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Agency is entitled to draw from the CRF without further authorities.
Accounts receivable and advances are stated at the lower of cost and net recoverable value. An allowance for doubtful accounts is recorded where recovery is considered uncertain.
All costs of $10,000 or more incurred by the Agency to acquire or develop capital assets are capitalized and amortized over the useful lives of the assets. Similar items under $10,000 are expensed.
Capital assets are amortized on a straight-line basis over the estimated useful lives of assets as follows:
Assets under construction/development are not amortized until completed and put into operation.
Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment. The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and compensatory leave benefits accruing to employees.
All eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The Agency’s contributions reflect the full cost as employer. These amounts are currently based on a multiple of an employee's required contributions and may change over time depending on the experience of the Plan. The Agency’s contributions are expensed during the year in which the services are rendered and represent the total pension obligation of the Agency. Current legislation does not require the Agency to make contributions with respect to any actuarial deficiencies of the Public Service Pension Plan.
(ii) Health and Dental benefits
The Government of Canada sponsors an employee benefit plan (health and dental) in which the Agency participates. Employees are entitled to health and dental benefits, as provided for under labour contracts and conditions of employment. The Agency’s contributions to the plan, which are provided without charge by the Treasury Board Secretariat, are recorded at cost and charged to personnel expenses in the year incurred. They represent the Agency’s total obligation to the plan. Current legislation does not require the Agency to make contributions for any future unfunded liabilities of the plan.
Employees are entitled to severance benefits, as provided for under labour contracts and conditions of employment. The cost of these benefits is accrued as employees render the services necessary to earn them. These benefits represent an obligation of the Agency that entails settlement by future payments. The obligation resulting from the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Agency.
Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable, the Agency’s best estimate of the contingency is disclosed in the notes to the financial statements.
The preparation of these financial statements in accordance with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues, expenses and related disclosure reported on the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. Employee severance benefits, contingent liabilities, the useful life of capital assets, services received without charge and the allowance for doubtful accounts are the most significant items where estimates and assumptions are used. Actual results could differ significantly from the current estimates. The estimates are reviewed periodically and, as adjustments become necessary, they are reported in the financial statements in the period in which they become known.
The Agency receives most of its funding through annual Parliamentary appropriations. Items recognized in the Statement of Financial Position and the Statement of Operations in one year may be funded through Parliamentary appropriations in prior, current, or future years. Accordingly, the Agency has different net results of operations for the year on a government funding basis than on an accrual accounting basis. These differences are reconciled below.
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Vote 5– CRA capital expenditures Table note 1
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Payments to provinces under the Softwood Lumber Products Export Charge Act, 2006 Table note 2
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Children’s Special Allowance Payments Table note 2
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Other Table note 2
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Appropriations available for future years Table note 3
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Capital Table note 1
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Appropriations lapsed - Operating Table note 3
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Expenditures related to Administered Activities Table note 2
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- Table note 1
- As required by the Treasury Board Secretariat, CRA is presenting a separate Vote for capital expenditures for the first time in 2010-2011. In prior years, capital expenditures were included in the operating vote.
- Table note 2
- In accordance with the division of activities for financial reporting purposes outlined in Note 2, the ex-gratia payments for Relief for Heating Expense, which were authorized through Vote 1 - CRA Operating expenditures, as well as the payments under the Softwood Lumber Products Export Charge Act, the Children’s Special Allowance and the Energy Cost Benefit payments, are reported as federal administered expenses on the Statement of Administered Expenses and Recoveries of the Agency’s Administered Activities financial statements.
- Table note 3
- Pursuant to section 60(1) of the Canada Revenue Agency Act, the balance of money appropriated by Parliament for the use of the Agency that remains unexpended at the end of the fiscal year lapses at the end of the following fiscal year.
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Amortization of capital assets (Note 5)
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Services received without charge from other government agencies and departments (Note 11)
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Non-tax revenue not credited to Vote 1 (Note 10):
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Information technology equipment including leased assets (Note 7)
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Information technology equipment including leased assets (Note 7)
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Information technology equipment including leased assets (Note 7)
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The cost of software in development, which is not amortized, is $154,329,914 as at March 31, 2011 ($227,841,892 as at March 31, 2010).
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The Agency has entered into agreements to rent information technology equipment under capital leases with a cost of $26,240,713 and accumulated amortization of $12,499,900 as at March 31, 2011 ($20,737,435 and $5,770,101 respectively as at March 31, 2010). These capital leases expire on September 30, 2012. The obligations for the upcoming years include the following:
The Agency and all eligible employees contribute to the Public Service Pension Plan, which is sponsored by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to the increase in the Consumer Price Index.
The Agency’s and employees’ contributions to the Public Service Pension Plan for the year were as follows:
The Agency’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada.
The Agency and all eligible employees contribute to the Public Service Health Care Plan and Public Service Dental Care Plan, which are sponsored by the Government of Canada.
The Agency’s responsibility with regard to these plans is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada.
The Agency provides severance benefits to its employees based on eligibility, years of service and salary upon termination. This benefit plan is not pre-funded and thus has no assets, resulting in a plan deficit equal to the accrued benefit obligation. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
The following table presents the expenses by program activity and expense category as described in Note 1 of these financial statements.
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Other allowances and benefits (including employee benefits described in Note 8)
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Amortization of capital assets (Note 5)
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9.) Segmented information - Expenses (continued)
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Other allowances and benefits (including employee benefits described in Note 8)
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Amortization of capital assets (Note 5)
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The following table presents the revenues generated by program activity and revenue category as described in Note 1 of these financial statements.
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10. Segmented information - Non-tax revenue (continued)
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The Agency is related in terms of common ownership to all Government of Canada departments, agencies, and Crown corporations. Transactions with Crown Corporations entered into by the Agency are in the normal course of business and on normal trade terms applicable to all individuals and enterprises. Transactions with other Government of Canada departments and Agencies are conducted on a cost recovery basis.
During the year, the Agency received various services without charge from other government agencies and departments. The estimated costs for significant services received without charge include:
Pursuant to the Canada Revenue Agency Act, a Board of Management is appointed to oversee the organization and administration of the Agency and the management of its resources, services, property, personnel and contracts. The expenses relating to the Board’s activities for the year included in the net cost of operations were as follows:
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The Agency is a defendant in certain cases of pending and threatened litigation which arose in the normal course of operations. The current best estimate of the amount to be paid in respect of the cases identified as likely to be lost has been recorded in Accounts payable and accrued liabilities. All other cases, excluding those assessed as unlikely to be lost, are considered contingent liabilities and the related amounts are disclosed whenever the amount of the contingency can be reasonably estimated. As at March 31, 2011, contingent liabilities for claims and pending and threatened litigation have been estimated at $52,131,223 ($27,716,223 as at March 31, 2010).
The nature of the Agency’s activities can result in multiyear contracts and obligations whereby the Agency will be committed to make future payments when the goods are received and/or the services are rendered. Significant contractual obligations, other than lease obligations for capital assets (Note 7), that can be reasonably estimated are as follows:
The presentation of the net debt indicator and a statement of change in net debt is required under Canadian generally accepted accounting principles for the public sector.
Net debt is the difference between a government’s liabilities and its financial assets and is meant to provide a measure of the future revenues required to pay for past transactions and events. A statement of change in net debt would show changes during the period in components such as capital assets and prepaid expenses. Departments and agencies are financed by the Government of Canada through appropriations and operate within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by departments and agencies is deposited to the CRF and all cash disbursements made by departments and agencies are paid by the CRF. Under this government business model, assets reflected on the financial statements, with the exception of the Due from the CRF, are not available to use for the purpose of discharging the existing liabilities of the Agency. Future appropriations and any respendable revenues generated by the Agency’s operations would be used to discharge existing liabilities.
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Accounts payable and accrued liabilities (Note 6)
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Lease obligations for capital assets (Note 7)
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Accounts receivable and advances (Note 4)
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On August 26, 2011 the Province of British Columbia announced that it will return to the provincial sales tax. The impact, if any, on these financial statements is unknown at this time.
Certain comparative figures have been reclassified to conform with the presentation used in the current year.
Financial Statements Discussion and Analysis – Agency Activities
Introduction
This section of the Financial Statements provides unaudited supplementary information on Agency Activities, on an accrual basis, as reported in the audited Financial Statements. It also provides an overview of the Enterprise Risk Management.
Financial Statements Highlights
There are three significant program administration changes which have influenced the results in the Financial Statements.
On July 1, 2010, the CRA successfully implemented the Harmonized Sales Tax (HST) in the provinces of Ontario and British Columbia. However, on August 26, 2011 the Province of British Columbia announced that it will return to the provincial sales tax. The transition period is expected to take a minimum of 18 months. During this period, the Agency will continue to administer the HST in British Columbia.
The CRA has received funding for 2010-2011 and subsequent years of $710 million (including employee benefit plan contributions and accommodation charges) and authority to spend $21.7 million of internal CRA funds for the continuing implementation and administration of the HST in Ontario and British Columbia. Of this amount, $91.7 million was received to cover costs in 2010-2011. Funding was used to enhance service to taxpayers, further develop capacity to identify and address the risk of HST non-compliance, transition affected provincial employees to the Agency, implement remaining IT system modifications, and administer new province-specific HST flexibilities in Ontario and British Columbia.
Program enhancements to address the increased risk of HST non-compliance and completing the necessary system changes will continue to be a priority for the Agency in 2011-2012.
The CRA established a separate Capital Expenditures Vote as of April 1, 2010, meaning the Agency’s Capital asset expenditures, with the exception of certain year-end adjustments, were funded by a distinct capital budget authority. Previously, capital amounts were included in, and funded out of, the Operating Vote Authority.
In fiscal year 2011, the Agency’s capital expenditures totalled $110.4 million. The Agency carried forward an amount of $52 million, which was a result of an overestimated capital budget requirement at the time Main Estimates were prepared due to changes in assumptions regarding the terms and conditions of procurement agreements. The unused balance of capital funding will be used to finance capital purchases in fiscal year 2012.
As outlined in the table below, the CRA continued to invest in information technology (IT) systems in order to ensure modern and efficient program delivery. The Agency had several large-scale projects that required substantial investments in the development of IT systems. Combined with the acquisition of IT hardware, the Agency invested $106 million in IT related capital assets this fiscal year. The value of these new capital assets has been offset by amortization expenses of $93.4 million in 2010-11.
Figure 21 Information Technology Investment in Capital Assets
As part of the 2010 Federal Budget, and to support its priority of restoring fiscal balance, the Government announced a freeze on the operating budgets of departments and agencies until 2012-2013. As a result, no incremental funding was provided to organizations for the costs of wage increases.
In fiscal year 2010-2011, the Agency managed these operating pressures in a decentralised manner by requiring individual budget managers to absorb them within existing budgets. The funding shortfall of approximately $13 million was primarily comprised of the economic increases associated with the Public Service Alliance of Canada (PSAC) and the Professional Institute of the Public Service of Canada (PIPSC) collective agreements, as well as salary increases for the Human Resource (HR) and Executive/Cadre (EC) groups.
Given the magnitude of the pressures associated with non compensated wage and salary cost increases in future years, the Agency has undertaken a targeted program spending realignment review to identify potential sources of funding. The reduction in spending will primarily be achieved through general administrative and program efficiencies.
Analysis of Net Cost of Operations
The Agency’s 2010-2011 net cost of operations increased by $123 million from 2009-2010. Agency expenses totaled $4,606 million in 2010-2011 (2009-2010 - $4,441 million) (see Note 9 of the Financial Statements - Agency Activities for the breakdown of expenses by category). When adjusting for non-tax revenue of $610 million (2009-2010 - $569 million), the net cost of operations amounts to $3,995 million, as illustrated below:
Details on the net cost of operations
The Agency’s expenses are composed of 74% in personnel expenses (salaries, other allowances and benefits) and 26% in non-personnel expenses, as illustrated in the figure below.
Figure 22 Total Expenses by Type
Personnel expenses are the primary drivers for the Agency. A number of factors contributed to the net increase of $179 million for this type of expenses in 2010-2011, the most significant being the increase in the rate used to calculate severance benefits. Additional costs were also incurred for salary revisions pursuant to collective agreements provisions.
Significant elements of non-personnel expenses are composed of accommodation, IT equipment and services, transportation and communication expenses. In total, non-personnel expenses decreased by $15 million, which is mainly attributable to the reduction in expenses relating to accommodations, travel and telecommunication, advertising and materials and supplies, offset by an increase in IT equipment and services.
Enterprise Risk Management
The purpose of the Enterprise Risk Management (ERM) Program is to ensure that the Canada Revenue Agency (CRA) develops and implements a systematic, comprehensive approach to managing risks that is fully integrated into decision-making, planning and reporting processes and mechanisms.
Throughout the year, the Agency delivered risk management training for managers and executives. It has also continued to support the development of the organisation’s risk management capacity by maintaining a risk management module in its Managers Learning Program and by introducing a risk management segment to a new Executive Cadre Learning Program piloted over the course of the year. Overall, more than 600 CRA employees were able to obtain risk management training in 2010-11.
In 2010-11, the Agency continued its efforts to better align corporate risk management with its planning and resource allocation cycles. ERM activities and deliverables were reviewed and timelines adjusted to allow for a better integration of risk information and commitments into other key products and processes including the Corporate Business Plan, the Corporate Audit and Evaluation Plan, the Strategic Investment Plan, and the Executive Cadre’s Accountability Regime.
The two key ERM products in support of corporate risk management are the Corporate Risk Inventory (CRI), which defines the risks faced by the Agency, and the CRA Risk Action Plan (RAP), which highlights the Agency’s efforts in ensuring controls remain effective, actions to manage risk are developed and implemented, and risks are reviewed and monitored regularly. To assess progress in pursuing the mitigation measures included in the CRA RAP, released in January 2010 and aligned with CRA priorities as outlined in the Corporate Business Plan for the 2010-2011 to 2012‑2013 planning period, the Agency gathered status updates on key initiatives.
Furthermore, in order to ensure continued relevance of risk information, the Agency updated its risk inventory. The CRI 2010 was developed over the course of the year and, while some incremental changes were made, the risks themselves remained stable.
The CRI 2010, is comprised of 6 primary risk themes.
Taxpayer Compliance
One of the CRA’s key program outcomes is to ensure compliance with tax laws on behalf of governments across Canada. The CRA’s fundamental approach is to encourage taxpayers to fulfill their tax obligations. While the vast majority of taxpayers are compliant, the current economic context could result in increased compliance challenges.
Government of Canada Legislative, Regulatory and Policy Framework
While the CRA has legislated authority over many aspects of its business, the organization must still deliver its programs according to the Government of Canada’s (GoC) legislative, regulatory and policy framework. The complexity and constant evolution of GoC rules create challenges for the Agency as efforts are needed to ensure the organization adjusts in a timely fashion.
Resources and Performance
The effects of a sound strategic resource allocation process are directly linked to our performance as an organization. In order to ensure optimal performance, the CRA needs to leverage its financial resources and ensure the flexibility to adapt rapidly and effectively to change. This must be done while proactively managing the service expectations of taxpayers.
Skilled, knowledgeable and Ethical Workforce
Among the CRA’s most important assets are the skills and talents of its people, their knowledge and the ethical behaviour and standards by which they fulfill their responsibilities. While recognizing that current demographic trends may present significant challenges for the organization, the CRA must continue to strive to hire the right people with the right skills, capitalize on corporate knowledge and ensure the highest ethical standards are maintained throughout the Agency.
Protection of Information
As a result of the CRA’s mandate and the nature of its work, significant amounts of personal and sensitive information are entrusted to the Agency. Protecting the confidentiality of personal and business tax information provided to the CRA is critical for maintaining the trust and confidence of Canadians. Although the CRA’s potential exposure to fraudulent activities cannot completely be eliminated, there are currently various mechanisms in place to effectively protect against inappropriate access or disclosure of protected taxpayer and benefit recipient information.
Information Technology
As an advanced and complex organization, the CRA’s programs and services depend on a complex information technology environment. The increased complexity of our legislative and business environment in addition to the increased diversity and expectations of external stakeholders put steady pressures on our IT services, facilities and applications to support rapidly changing demands.
- Date modified:
- 2012-01-16