What it is

The information below sets out the overall spending levels for strengthening service over the period covered by this report

(in thousands of $)

Total authorities
$718,460

Actual expenditures
$704,572

Variance
$13,888

Full-time equivalents
6,958

What we achieved during 2010-2011

• 66.3% of interactions and transactions were undertaken on a self service basis by individual and business taxpayers, and benefit recipients and/or their representatives, up 2.5% from the previous year;
• There were over 14 million visits to My Account;
• There was a 69.7% increase in electronic corporate returns processed;
• There was a 56.2% increase in successful log-ins to My Business Account services; and
• 60.3% of individual returns were filed electronically.

Where we go from here

Electronic services

Navigating the internet and accessing the right information and services can be difficult and frustrating for many people. We are working to make the CRA Web site pages simple to follow and adding options that facilitate use of our online services to promote compliance.

We added features to My Business Account this past year to encourage businesses to perform certain transactions. One of the key new features has made it simpler to transfer payments within a program account and between program accounts of the same nine digit business number, to make adjustments to GST / HST returns, and to make online requests for certain financial transactions. We also added an instalment payment calculator to our Web site in 2010- 2011 to make it easier for businesses to calculate their instalments for corporation and GST / HST accounts. Enhancements have been made to our Payroll Deductions Online Calculator, as well, to calculate payroll deductions more easily. The improvements include enhancements to screen displays, organization of tools, and information access. For GST / HST NETFILE, features were added so that registrants can now also file their Public Service Bodies’ Rebate at the same time as they electronically file their GST / HST Return.

In 2010-2011, there was an increase of almost 1.3 million electronically filed GST / HST returns due, in part, to the harmonization of the provincial sales tax in Ontario and British Columbia and the introduction of mandatory electronic filing initiatives. As well, there was an increase of over 369,000 corporation returns filed via the Internet due, in part, to the Corporate Tax Administration for Ontario ( CTAO ) and mandatory Internet filing initiatives.

In July 2010, we redesigned the layout of My Account to feature the use of tabs to more effectively organize and display the growing amount of information. The changes were designed to improve usability, streamline navigation, and contribute to an easy to use, intuitive user experience.

A popular new option added to our Web site in 2010-2011 helps employers ensure that enough Canada Pension Plan contributions and Employment Insurance premiums have been withheld for full year employees. The growing number of log ‑ ins to this Web page provides evidence that businesses see the benefits of using this online service

We witnessed a 2.5% increase in self-service transactions by individual and business taxpayers, and benefit recipients and/or their representatives from a year ago. This places us firmly on track to attain our objective of a 5% increase by 2012. The public appetite for online services has been increasing with electronic filing rates for individuals and businesses continuing to trend upwards. Our Quick Access online option continues to be a popular choice for taxpayers, as it provides information on their taxes and benefits, such as tax return status, RRSP deduction limit, Tax Free Savings Account contribution room, and the status of benefit payments.

The Represent a Client service has proven to be a significant addition to the suite of self-service options. Use of the Represent a Client service continued to grow in 2010-2011. The number of new registered representatives was over 27,500, which is 45% more than last year. Nearly 3.2 million individual accounts and 1.2 million business accounts were accessed, increases of 44% and 68% respectively.

We will look for new opportunities to add value to our electronic service environment while ensuring that our online channel is reliable and secure. In 2010-2011, we introduced important new measures to increase security. As one example, we implemented our own credential management service. These measures have lowered overall costs, enabling the CRA to offer a broader suite of secure electronic services.

As part of CRA’s plain language initiative, special attention was paid to the quality of our correspondence with taxpayers as well as the quality of guides, forms, and Web pages. For example, in 2010-2011, verses used in notices of assessment, standard letters on debt collection, Web pages, and letters from the Taxpayer Relief Program were edited for plain language. Also, a cover-to-cover plain language review was performed on the T1 guide and its related federal and provincial forms. Other activities included giving CRA employees the tools, training, and support they need to put plain language into practice. As one example, an interactive, facilitator-led course was developed to teach the principles of plain language and help CRA employees develop their skills in applying these principles. To date, close to 1,700 employees across the CRA have attended the course.

Tax Free Savings Account (TFSA)

The response to the TFSA has been overwhelmingly positive. At the end of 2009, there were approximately 4.8 million TFSA holders. That number rose to 6.7 million by the end of 2010. Given the program’s popularity, we anticipate continued and considerable growth in the number of holders in future years. To accommodate the increase, and to ensure timely updating of TFSA records, we are exploring ways to streamline our processing routines.

As part of the administration of the program, the CRA reviews information received from financial institutions and TFSA issuers to identify individuals who may have over-contributed. The results of these reviews showed that a small minority of Canadians, around 1.5% of all TFSA holders, did not fully understand the rules. We responded to this by:

• conducting public opinion research;
• improving the information on the CRA Web site; and,
• conducting outreach with the financial industry.

In the second year of the program we saw a slight decrease, to 1.4%, in the proportion of TFSA holders who made excess TFSA contributions.

We continue to work to increase awareness of TFSA guidelines among Canadians and financial institutions. We will do so by continuing to update TFSA web pages, issue relevant Tax Tips, write community newspaper articles, and deliver Webinars to financial institutions.

Processing returns and payments

The timely and accurate processing of returns is another way to encourage voluntary compliance. We met our external service standards this past year for processing T1 individual returns in both paper and electronic formats, confirming that we provided timely service to Canadians. In addition, we met our internal processing target by processing 100% of the individual returns that were filed on time by mid-June 2010.

Despite the recent introduction of HST in Ontario and British Columbia, which significantly impacted the complexity of the GST/HST return and review process, we were able to process 90.3% of GST/HST returns within 30 days. Although we did not meet our 95% target, we are working to introduce additional efficiencies that will accelerate our processing times. Overall, the number of paper returns that we process continues to fall due to the increased use of electronic filing.

Our My Payment service lets individuals and businesses make payments electronically through a secure link with participating Canadian financial institutions that offer the Interac® Online payment service. We promoted the use of My Payment during 2010‑2011 through outreach and promotional activities including news releases and other CRA announcements, mail-outs, and conferences. This service is an additional way we are making compliance easier.

We expanded the use of the Business Number (BN) this past year as a common client identifier for businesses to securely and efficiently interact with various levels of government. In December, 2010, the CRA and the Province of Saskatchewan signed a letter of intent to adopt the BN for the province’s Corporate Registry in April, 2012. The wider use of the BN will reduce the administrative burden for both businesses and the CRA.

Improvements to service delivery help to ensure taxpayers provide correct information, which increases our accuracy in handling taxpayers’ files. Our T1 Quality Evaluation Program reviews initial assessments of individual tax and benefit returns. It is our primary tool to determine the accuracy of individual returns assessed. Our results for 2010‑2011 show that processing errors with an impact on a taxpayer’s refund or balance due was 1.17%. This compares with 0.96% the previous year. From 2000 through 2010, the amounts per error averaged $252.06.

The CRA strives to be fair in all aspects of its activities as this is crucial to sustaining taxpayers’ trust. When we find errors on tax returns, we correct them, if possible. While some errors result in additional tax owing, others mean taxpayers pay more tax than required. As part of our processing review, we compare an individual’s return to third‑party information to identify areas where the taxpayer may have under-claimed credits. We adjust these returns to allow amounts the taxpayer is entitled to and, if applicable, issue a refund. In 2010-2011, we identified and corrected over 341,000 individual returns, resulting in an average beneficial adjustment of $284 per return.

Harmonized Sales tax

In July 2010, the CRA implemented the harmonized sales tax (HST) in Ontario and British Columbia. Footnote 1

Harmonization involved a significant number of system enhancements and changes to CRA programs and activities. To make compliance with the new tax laws easier we focussed on ensuring that both CRA staff and registrants were equipped with the right tools to prepare for the introduction of HST in Ontario and British Columbia.

A multi-media campaign to educate businesses and create public awareness was rolled out. It included interactive online seminars, short video presentations, in-person information sessions, and the distribution of over 1.1 million HST information sheets. Videos providing information on topics such as HST transitional rules, electronic filing, housing rebates, and forms for both businesses and consumers were posted on the CRA Web site and YouTube. Filing information was provided in several formats including inserts sent with GST/HST returns as well as webcasts on filing electronically using GST/HST NETFILE and how to identify the changes to GST/HST Rebates.

The HST audit and examination activities were enhanced during 2010-2011 enabling the CRA to focus on GST/HST compliance issues in high-risk areas. Audit programs are currently engaged in an intelligence gathering exercise to better understand the characteristics of non-compliance. This will further enhance the CRA’s capacity to identify high risk files.

Conclusion

In 2010-2011, we strengthened service to Canadians by capitalizing on technological innovations that led to an increase in taxpayers accessing our information and services electronically. Providing Canadians with multiple service channels makes it easier for taxpayers to comply with Canada’s tax laws. Our successful efforts to process individual and business tax and information returns and payments, accurately and on time, further contributes to self‑assessment and voluntary compliance. Advances in these areas in 2010-2011 lead us to conclude that we met our objective of providing Canadians with access to the services they need to meet their tax obligations voluntarily.

Our performance measurement framework – Strengthening service to make compliance easier

Table note 1

Represents the average number of weeks. Return to table note 1 source text

Table note 2

The standard was changed from 21 days to 30 days to align with legislative changes. Return to table note 2 source text

Table note 3

Substantiated results not available for 2009-2010. Return to table note 3 source text

Table note 4

Revised data capture method began June 2010. Return to table note 4 source text

Results against 2010-2011 planned deliverables

This past year, the CRA took steps to implement the initiatives listed below to strengthen service to make compliance with Canada’s tax laws easier. The tables also identify the status as of the end of the past fiscal year for each commitment related to these initiatives to be delivered in 2010-2011 as set out in our Corporate Business Plan 2010 ‑ 2011 to 2012-2013.

The status of a deliverable falls into one of three categories:

Completed – All planned activities related to the deliverable were finished on or before March 31, 2011.

In progress – At least one activity related to the deliverable was not completed prior to the end of the fiscal year.

Not started – No activities were begun by March 31, 2011, in relation to the deliverable.

Where no deliverables were to be completed during the 2010-2011 fiscal year for an initiative, we have inserted the abbreviation N/A (not applicable).

Initiative – Enhance our electronic services

Initiative – Promote the take-up of electronic filing and electronic payments

Initiative – Further tax harmonization

Footnote 1

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 CRA will continue to administer the HST in British Columbia. Return to Footnote 1 source text