Canada Revenue Agency Annual Report to Parliament 2013-2014

Agency Governance and the Board of Management

The Board of Management of the CRA consists of 15 members appointed by the Governor in Council. They include the Chair, the Commissioner and Chief Executive Officer, a director nominated by each province, one director nominated by the territories, and two directors nominated by the federal government. Members of the Board bring a diverse business and community perspective from the private, public, and not-for-profit sectors to the work of the CRA. The Board is responsible for overseeing the organization and administration of the CRA and the management of its resources, services, property, personnel, and contracts. It undertakes its oversight role in cooperation with CRA management to ensure the CRA fosters sound management and service delivery.

Members of the Board of Management (left to right)
Bottom Row: Margaret Melhorn, Andrew Treusch, Richard (Rick) Thorpe, Fauzia Lalani, Luce Samoisette
Top Row: Gordon Gillis, Richard J. Daw, James R. Nininger, Myles Bourke, Gerard J. Fitzpatrick, Raymond Desrochers, Robert (Bob) M. Manning, Norman G. Halldorson

Board priorities and accomplishments for 2013-2014

In support of the CRA during this reporting period, the Board continued to provide oversight in all areas for which it has statutory responsibilities, in line with the Board's priorities as stated in the CRA's Corporate Business Plan 2013-2014 to 2015-2016. Details on the Board's accomplishments in priority areas are provided below.

Board composition changed in 2013-2014. Ms. Susan J. McArthur's term as Chair of the Board ended on August 3, 2013. Ms. Fauzia Lalani became interim Chair until Mr. Richard (Rick) Thorpe was named Chair of the Board on October 3, 2013. The Board member from Ontario, Ms. Sylvie Tessier, left and processes are underway to replace her and to appoint a new member from British Columbia to fill the Chair's former position.

Strategic outlook

The Board oversaw the CRA's management of tax and benefit administration in 2013-2014 while remaining committed to the government-wide goal of optimizing resources. Each quarter, the Board received updates on fiscal rebalancing and transformation measures and their impact on the financial status and human resources of the CRA. Board members were kept fully informed of challenges in implementation and the best way to achieve the CRA's goals without undue delay and impact on operations and service to Canadians. The Board observed steady progress in implementing initiatives to reduce cost, improve efficiency, reduce red tape, and continually improve service to Canadians.

A key Board activity was providing direction on the development of the Corporate Business Plan and approving the final plan. Board members agreed to streamline work on the plan by using a common core structure, based on the CRA's spending architecture, for both Board and Treasury Board reporting.

In addition, the Board held a strategic planning meeting in June 2013, in which members gave guidance and direction to senior management on the CRA's integrated service, compliance, integrity and security strategy and the agenda for small and medium enterprises, with an emphasis on reducing red tape.

During the strategic planning meeting, the Clerk of the Privy Council was invited to speak to Board members about Blueprint 2020, the process to renew and build the public service of the future. Throughout 2013-2014, the Board continued to offer guidance and strategic advice to senior management about these efforts to improve the public service, and monitored employee engagement in the areas concerned.

As part of its strategic oversight of the CRA, the Board provided input to the Commissioner's performance assessment and performance agreement, approving areas under its oversight, and discussed other key senior management expectations and performance, to make sure they aligned with Board priorities and objectives.

Service to Canadians

Throughout 2013-2014, the Board continued to focus on the CRA's commitment to continually improve service to Canadians. The CRA Roadmap: Current Priorities for Service, Compliance and Integrity, which the Board approved in December 2013, clearly stated the CRA's objectives: improving service to make it easier to comply, making sure all taxpayers pay their share, and maintaining Canadians' trust.

The Board oversaw the evolution of the CRA's electronic service offerings and emphasized the ongoing need for reducing red tape, which the CRA discussed with small and medium enterprises and their representatives in a series of consultations.

Members drew on their collective experience in accounting, law, and business to provide management with an external perspective of potential benefits and challenges in the CRA's approaches to improve service and reduce red tape. The Board asked for and received updates throughout the fiscal year on service, including achievements in electronic services, and initiatives to reduce red tape.

Members also received updates on taxpayers' complaints, and the Board supported the further development of trends analysis. Other important briefings touching on service included reports on the activities of the Taxpayers' Ombudsman, and updates on the CRA's progress in administering personal information.

People and human resources management

In 2013-2014, the Board provided oversight of people management planning, as it was aligned more closely with government-wide directions, and ensured the continued streamlining of the CRA's human resources processes. Board members were updated on simplification measures such as disability management tools for managers, a new national service request management system, and the streamlining of executive performance management.

A Board priority in the fiscal period was ensuring the CRA has the appropriate workforce for the modern workplace. Members were active in guiding succession planning of CRA leadership. In addition, they gave direction on human resources initiatives including a robust recruitment and retention approach to address the CRA's workforce challenges, taking into account both demographics and future business needs.

The Board approved two strategic workforce plans, in June 2013 and March 2014, and supported their objectives: maintaining leadership capacity, meeting evolving business needs, and fostering employee health and wellness. The Board was shown how human resources priorities from Blueprint 2020 were being addressed, and it endorsed plans to review the competencies system to reduce red tape, to further improve the performance management process, and to simplify staffing.

The Board also continued to oversee personnel management through quarterly updates and discussions and by approving modifications to the CRA Policy on Terms and Conditions of Employment. As part of its support of a fair and healthy workplace, the Board received reports demonstrating the CRA's continued commitment to occupational health and safety, employment equity, and the respect of official languages.

Integrity and security

The Board continued to focus on measures to foster and promote integrity and security in the CRA; to prevent, monitor, detect, and manage security breaches; and to lessen the risk of fraud.

In 2013-2014, the Board approved the finalized CRA Integrity Framework, a reference tool for employees and a declaration of the CRA as an integrity-based organization.

The Board also approved the updated CRA Conflict of Interest Policy, a core instrument within the Integrity Framework. It reinforces the integrity of the CRA by providing clear direction surrounding preventing, identifying, and managing conflict of interest situations.

Other measures presented to the Board included a new method to guide the application of disciplinary measures in response to misconduct. This new guidance also aligned the CRA's disciplinary procedures with the recent addition to the Taxpayers' Bill of Rights: "You have the right to lodge a service complaint and request a formal review without fear of reprisal."

With respect to the security of tax and benefit information, the Board monitored action plans stemming from the Office of the Privacy Commissioner's audit of the administration of personal information, released on October 29, 2013. The Board also gave direction on the evolution of the Information Technology Security Program. The Board received updates twice during the year with information on security innovations, ongoing initiatives, and an overview of incidents. A third-party review conducted in the winter of 2013 found the CRA above average among its peers (including financial institutions and insurance companies) in this area.

The Board also supported the implementation of a new level of personnel security screening called Reliability Status Plus. It will strengthen security screening of employees in specific positions of trust within the CRA by identifying potential vulnerabilities and potential indicators resulting from an individual's financial situation, including tax compliance.

In addition, the Board approved the Internal Audit Charter, which meets the Institute of Internal Auditors requirements. The Charter had been recommended in the third-party review of the Corporate Audit and Evaluation Branch in 2012-2013.

Information technology responsiveness and sustainability

The Board encouraged and supported the CRA's advances in information technology (IT), considered critical to service excellence and the implementation of government-wide priorities.

To this end, the Board reviewed and approved the renewed IT strategy 2013-2014 to 2015-2016, which was aligned with the Corporate Risk Profile and priorities from the Corporate Business Plan and Vision 2020 strategic directions.

The Board also approved the CRA IT Security Strategy 2013-2016, aligned with the CRA's strategic vision. The Security Strategy ensures the protection of the confidentiality, integrity, and availability of taxpayer information and associated electronic services. It sets out the way the CRA will deliver security technology services efficiently and use industry-leading solutions in a cost-effective manner.

Further, the Board monitored the CRA's information technology investments and continued to oversee the management of the relationship with Shared Services Canada (SSC). Areas of oversight included the implementation of the SSC-CRA Relationship Assessment Framework, as well as an operating protocol and security governance. The Board received regular updates on government-wide and SSC transformation initiatives.

One of these major initiatives was the Data Centre Co-Location project. In July 2013, SSC's information technology infrastructure and associated CRA and Canada Border Services Agency services moved from Data Centre Heron to the new Data Centre West Québec, to support long term business, business continuity, security, and growth requirements.

Resource optimization

The Board fulfilled its oversight responsibilities for managing CRA resources in 2013-2014 by ensuring investment decisions reflected corporate priorities, approved projects were appropriately managed, and future funding pressures were identified.

The Board was briefed on the CRA Strategic Investment Plan 2013-2014 to 2022-2023, the 10-year investment plan for the CRA's portfolio of major project investments. Board members noted the maturity and progress of the CRA's approach to investment planning.

The Board also received quarterly resource management reports on the CRA's financial position, and was regularly updated by the Office of the Auditor General. It performs its own audits and reviews the CRA's annual statements, which are then submitted for approval by the Board.

Effective oversight and governance

In 2013-2014, the Board continued to oversee the management of enterprise risk: it approved the Risk-Based Audit and Evaluation Business Plan 2013-2016. It also received the first Chief Audit Executive Annual Report since the January 2013 merger of the former Corporate Audit and Evaluation and Enterprise Risk Management branches, making sure the risk and internal audit functions remained independent, thereby safeguarding the reliability of these functions. The Board monitored the high-performing enterprise risk management of the CRA: it studied key risk assessment results for the Corporate Risk Profile for 2013-2014, along with risk responses, accountabilities, and action plans.

In addition, the Board used a risk-based approach (for the third time) to set assessment priorities and assess CRA management processes, practices, and results through the Board of Management Oversight Framework.

The Board plays a major role in approving policy in its areas of oversight. During 2013-2014, it approved a new Information Management Policy Framework and a revised Information Management Policy, Project Management Policy and Real Property Management Policy.

Conclusion

The Board believes it has accomplished its strategic objectives for 2013-2014. It is committed to fulfilling its mandate to provide oversight of the organization and administration of the CRA, in the areas under its purview. It has provided senior management with direction and guidance throughout 2013-2014. The Board also acknowledges the excellent co-operation and support it received from the Commissioner, senior management, and employees of the CRA.

Board membership

The following are the Board members, as of March 31, 2014.

Richard (Rick) Thorpe, CPA, CMA, FCMA
Chair, Board of Management
Penticton, British Columbia

Myles Bourke, B.Comm., FCPA, FCA
Corporate Director
Lethbridge, Alberta

Richard J. Daw, FCA, CMC
Corporate Director
St. John's, Newfoundland and Labrador

Raymond Desrochers, B.Comm., CA, CFE
Partner
BDO CANADA LLP Chartered Accountants & Consultants
Winnipeg, Manitoba

Gerard J. Fitzpatrick, CPA, FCA, TEP
Partner
Fitzpatrick & Company Chartered Accountants
Charlottetown, Prince Edward Island

Gordon Gillis, B.A., LL.B.
Corporate Director
Eureka, Nova Scotia

Norman G. Halldorson, B.Comm., CA, FCA
Corporate Director
Clavet, Saskatchewan

Fauzia Lalani, P.Eng.
Director, Logistics Services
Suncor Energy Services Inc.
Calgary, Alberta

Robert (Bob) Manning, B.B.A.
Associate
Owens MacFadyen Group
Saint John, New Brunswick

Margaret Melhorn, B.A., M.A.
Corporate Director
Yellowknife, Northwest Territories

James R. Nininger, B.Comm., M.B.A., Ph.D
Corporate Director
Ottawa, Ontario

Luce Samoisette, LL.M., MS Taxation, DDN, LL.B.
President
Université de Sherbrooke
Sherbrooke, Quebec

Andrew Treusch, B.A., M.A.
Commissioner of the Canada Revenue Agency
Canada Revenue Agency
Ottawa, Ontario

****At the time of writing this report, processes were under way to appoint new members from British Columbia and Ontario****

Committee membership and director participation

The Board of Management is supported by four committees: they undertake much of the detailed review of items brought before the Board for its consideration. The following table shows the membership of each committee as well as directors' committee attendance over the 2012-2013 fiscal year.

Board members present throughout the fiscal year

Board members	Board of management (9 meetings)1	Audit committee (5 meetings)2	Governance committee (3 meetings)	Human resources committee (4 meetings)	Resources committee (4 meetings)	BoMOF sub-committee (3 meetings)
Myles Bourke	8/9	5/5	3/3
Richard J. Daw	8/9	4/5
Raymond Desrochers	9/9		3/3
Gerard J. Fitzpatrick	9/9	5/5
Gordon Gillis	9/9		3/3	4/4		3/3
Norman G. Halldorson	9/9	5/5				3/3
Fauzia Lalani	7/7		1/2		3/3	1/1
Robert (Bob) Manning	8/9				4/4
Margaret Melhorn	9/9			4/4	2/2
James R. Nininger	7/9		3/3	4/4		3/3
Luce Samoisette	9/9			4/4
Richard (Rick) Thorpe B.C. director)	5/5				2/2
Andrew Treusch	9/9	5/5	3/3	4/4	3/4	2/3

Board members who joined during the fiscal year

Board members	Board of management (9 meetings)1	Audit committee (5 meetings)2	Governance committee (3 meetings)	Human resources committee (4 meetings)	Resources committee (4 meetings)	BoMOF sub-committee (3 meetings)
Fauzia Lalani (Interim Chair)	2/2	2/2		1/1	1/1	1/1
Richard (Rick) Thorpe (Chair of the Board)	4/4	2/2	2/2	2/2	2/2	2/2

Board members who departed during the fiscal year

Board members	Board of management (9 meetings)1	Audit committee (5 meetings)2	Governance committee (3 meetings)	Human resources committee (4 meetings)	Resources committee (4 meetings)	BoMOF sub-committee (3 meetings)
Susan J. McArthur	3/3	1/1	1/1	1/1	1/1
Sylvie Tessier	5/5		1/1		2/2
Average attendance per meeting	120/125=96%	29/30=97%	20/21=95%	24/24=100%	20/21=95%	15/16=94%

Governor in Council rates of pay

Member capacity	Per annum retainer	Per diem
Board chair	$14,500 - $17,100	$565 - $665
Committee chair	$11,100 - $13,000	$565 - $665
Director	$7,300 - $8,600	$475 - $550

Source: www.appointments-nominations.gc.ca

Footnote 1: This includes all Board meetings and teleconferences, and the annual strategic planning meeting.

Footnote 2: The two teleconferences on the financial statements have been streamlined to one teleconference of the audit committee followed by one of the Board. The Commissioner-Chief Executive Officer attended as an observer in regular closed sessions.

Date modified:

2014-11-06