A Report on Plans and Priorities

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Revenue Canada 1999-2000 Estimates A Report on Plans and Priorities

Approved by the Minister of National Revenue

Section I
Messages

Section II
Departmental Overview

Section III
Plans, Priorities, Strategies and Expected Results

C. Consolidated Reporting

Section IV Supplementary Information

Section I
Messages

A. Minister's Message

This Report on Plans and Priorities addresses a period of exciting challenge for Revenue Canada, as it prepares for and undergoes a major change - the transformation to the Canada Customs and Revenue Agency (CCRA).

The CCRA is not an end in itself. Rather, it will be the means for providing Canadians with the best possible customs and revenue administration. The Agency will provide opportunities to significantly reduce duplication in tax administration between the federal and provincial/territorial governments, as well as to foster a better working relationship between the two levels of government. Furthermore, the innovative structure of the Agency, with strong ministerial accountability for program matters as well as a Board of Management to provide a more business-oriented approach to management, will establish a solid platform for managing these changes.

Fairness is an essential element of our entire administration. Revenue Canada is already a world leader in treating citizens in a fair and equitable manner. Our focus on fairness will be fully embodied in the Agency.

Our agenda for service improvement is fullsome and extends to all our business lines. A primary example is the work being done under the umbrella of the Customs Blueprint. The Customs Blueprint outlines a vision for the delivery of customs services for the future and provides our stakeholders with an opportunity to influence the nature of those services, and as a consequence, some of the initiatives contained in this report.

Our change agenda will be challenging for the organization, but there is a firm commitment to ensure that Canadians receive the best value for their tax dollars from the country's customs and revenue administration. As Minister of National Revenue, it is my privilege to table this Report on Plans and Priorities in Parliament.

The Honourable Herb Dhaliwal
Minister of National Revenue

B. Management Representation Statement

I submit, for tabling in Parliament, the 1999-2000Report on Plans and Priorities (RPP) for Revenue Canada.

To the best of my knowledge the information:

Accurately portrays the Department's mandate, plans, priorities, strategies and expected key results of the organization.
Is consistent with the disclosure principles contained in the Guidelines for Preparing a Report on Plans and Priorities.
Is comprehensive and accurate.
Is based on sound underlying departmental information and management systems.

I am satisfied as to the quality assurance processes and procedures used for the RPP's production.

The planning and reporting structure on which this document is based has been approved by Treasury Board Ministers and is the basis for accountability for the results achieved with the resources and authorities provided.

Director General
Corporate Affairs Branch

Section II
Departmental Overview

A. Mandate, Roles and Responsibilities

Revenue Canada draws its overall mandate fromthe Department of NationalRevenue Act. Upon enactment of the enabling legislation, the Agency's mandate will flow from the Canada Customs and Revenue Agency Act. The Agency will be responsible for administering the existing programs described below. It will also be responsible for implementing new service agreements with the provinces and territories, other government departments, and aboriginal governments.

The Department's mandate is and will be to collect revenues; to administer tax laws for the federal government as well as on behalf of all provinces and territories; to administer legislation governing international trade and travel and provide border services; and to deliver certain social and economic benefit programs to Canadians.

Revenue Collection and Tax Administration. Revenue Canada collects all federal income taxes; personal income taxes for all provinces except Quebec; corporate income taxes for all provinces except Alberta, Ontario and Quebec; goods and services taxes (GST) in all provinces except Quebec; harmonized sales taxes (HST) in Nova Scotia, New Brunswick and Newfoundland; Provincial Sales Tax (PST) on behalf of Manitoba and Quebec, and commencing in 1999 for Ontario; and customs duties. It also collects commodity taxes and levies for certain provinces; contributions towards the Canada Pension Plan; and premiums for Employment Insurance. The revenues collected sustain other government programs and services, and contribute to the social well-being and economic prosperity of all Canadians.

Border Protection and Trade Administration. In carrying out its border and trade responsibilities, Revenue Canada processes commercial goods and travellers; monitors and controls the importation and exportation of controlled and restricted goods; and prevents the entry of prohibited materials and inadmissible persons. The Department administers border and trade legislation, including international agreements such as the World Trade Organization Agreement, the Canada - U.S. Free Trade Agreement (FTA), and the North American Free Trade Agreement (NAFTA). These services contribute to safe homes and streets in Canada and help Canadian businesses compete in the global economy.

Income Redistribution. Revenue Canada is responsible for delivering a number of social and economic benefit programs through the tax system. These programs include GST/HST credits, the Canada Child Tax Benefit, and scientific research and experimental development tax credits. In addition, the Department currently administers certain benefit programs on behalf of the provinces and territories.

Given the scope of its mandate, Revenue Canada touches the lives of virtually every Canadian. This adds to the complexity of operations since it must understand, interpret, and apply the provisions of over 185 acts, regulations, incentives, credits, surtaxes and international tax treaties. The varied nature of transactions range from simple payments to benefit recipients, such as the more than 35 million Child Tax Benefit payments, to the audit of complex business transactions undertaken by multi-national corporations. The charts below illustrates the scale of the Department's operations.

Number of transactions
processed during 1997-1998

Type and number of clients served (1997-1998)

Travellers	109,448,000
Individual income tax filers	21,676,000
GST registrants	1,873,000
Corporate income tax filers	1,140,000
Employers	1,301,000
Trusts	275,000
Commercial importers	158,000
Commercial exporters	92,000
Charities	74,000
Registered pension and deferred profit-sharing plans	23,000

B. Strategic Foundation and Objectives

Revenue Canada's anticipated move to an Agency will be shaped by its well-defined mandate and strategic foundation. The strategic foundation is reflected in the Department's mission, values, and vision.

Mission

Revenue Canada's mission is to promote compliance with Canada's tax, trade and border legislation and regulations through education, quality service and responsible enforcement, thereby contributing to the economic and social well-being of Canadians.

Values

Revenue Canada interacts daily with thousands of Canadians from every walk of life. The Department strives to ensure that its behaviour toward clients and colleagues is guided by four core values: integrity, professionalism, respect, and co-operation.

Vision and Strategic Goals

Revenue Canada's vision provides a description of the organizational characteristics that it aspires to achieve. Its vision is supported by strategic goals that are relatively stable with a long-term horizon, and they reflect the mission-critical areas which will guide the achievement of this desired future state.

Revenue Canada will be recognized and respected by clients for its integrity, fairness and innovation in administering high-quality, yet affordable programs. Its progressive stance will encourage new inter-governmental and international partnerships fostering greater government efficiency and a stronger economic union.

The Department will earn its good standing with Canadians through the continued pursuit of six strategic goals:

Quality Services and Client Education
To provide accessible, responsive, and reliable services at an affordable cost.
Responsible Enforcement and Border Protection
To deliver fair, responsible, and effective enforcement programs in a manner that directly responds to changes in the environment.
Fair Administration
To apply the principle of fairness diligently and consistently in all programs in order to sustain public confidence and encourage voluntary compliance.
Simple and Efficient Processes
To minimize the administrative cost and compliance burden imposed on our clients by streamlining and simplifying our legislation, programs, and operations.

Knowledgeable and Skilled People
To ensure that the people at Revenue Canada have the knowledge, skills and support needed to work effectively in an environment that promotes and recognizes exemplary performance.
Effective Management and Corporate Services
To provide effective support for our programs and initiatives through responsive, modern, and integrated corporate policies, systems and processes.

Corporate Objectives

In setting its strategic direction, the Department has adopted 12 corporate objectives that will be pursued over the period from 1999-2000 to 2001-2002. These objectives will be achieved through the initiatives being undertaken within the Department's six business lines.

To have a multi-year plan for the Agency outlining its approach for providing high quality service to Canadians.
To achieve greater levels of program integration through partnership arrangements with the provinces and territories.
To advance the use of electronic service delivery.
To enhance our level of activity and influence at an international level thereby supporting government trade and foreign policy objectives.
To increase our capacity for sound risk detection and management, and to develop effective strategies to address high-risk areas.
To put in place an electronic commerce action plan that addresses potential compliance risks.
To demonstrate to the public the fairness of our customs and revenue administration.
To establish a systematic program for process improvement that will enhance the functioning of our business operations.
To have in place a responsive and adaptive human resources function that will help us evolve to an employer of choice.
To adopt a structured approach to change management that includes clearly defined and comprehensive transition plans.
To implement an integrated management framework for the Agency that enables effective planning, decision-making, resource management and accountability.
To promote a corporate culture that is vital and aligned with the Agency's values and future directions.

C. Operating Environment

As stated earlier in this document, the mandate of Revenue Canada will remain fundamentally unchanged under Agency legislation. Its operating environment, however, is changing rapidly due to external trends and developments that will continue to challenge the administration. This section examines these challenges and their implications on Revenue Canada's operating environment and its strategic direction.

A key international trend is seen in the increase in foreign trade over the past few decades. Indeed, imports are a key workload indicator for Revenue Canada's customs programs. While growth in imports and exports has slowed in the past year due to a downturn in Asian and Latin American markets, the Conference Board of Canada predicts that foreign trade will continue to represent an important source of economic strength. Revenue Canada will be challenged to respond to the growth in trade resulting from multilateral trade policies as well as new and emerging free trade agreements with Europe, the Western Hemisphere, and members of the Asia Pacific Economic Co-operation (APEC) community.

Canada's Merchandise Imports
and Exports
(constant $ billions)

The increase in imports to Canada is combined with growing trends in world tourism and unprecedented levels of international migration. For Revenue Canada, the challenge is to continue to protect national borders while servicing an increase in leisure travel, business travel and indeed, commercial activity. North American countries have responded by making sustained efforts to co-ordinate the protection of borders.

Co-ordination is a necessity in meeting many of the challenges of today's global economy. Revenue Canada began a concerted effort at collaborating and partnering with foreign governments and international organizations to strengthen its understanding of the scope of international investment, finance and taxation systems. These efforts are aimed at protecting the revenue base of governments worldwide in response to the increased mobility of labour, money and capital. Measures developed to respond to these challenges include enhanced verification of foreign income, new transfer pricing legislation and promotion of principles of good tax administration.

"[The] growing legion of very small businesses will continue to play an important role in Canada and other developed economies."

Catherine Swift, President and CEO Canadian Federation of Independent Business

Continued success in protecting Canada's revenue base will also depend on the ability to assess shifts in society and the marketplace. The challenge for Revenue Canada has been and will be to develop an early understanding of societal and business trends so that it can make timely and appropriate adjustments to service and compliance programs. Revenue administrations worldwide recognize that societal attitudes about tax policy are shifting. Likewise, the growth of new industries, new ways of conducting business and shifting business attitudes contribute to an increasingly more complex business environment.

The business environment in Canada is profoundly affected by the technological revolution. An important feature of this revolution is the growth of electronic commerce as a means of doing business. Along with the real benefits derived from it use, the threats are no less real: difficulties in tracking funds; increased propensity for illegal offshore activities; and other non-compliance trends. Among the measures Revenue Canada has adopted to counter the challenges presented by electronic commerce are partnerships with international tax, customs, and police organizations and other federal and provincial departments, as well as with private sector organizations.

Business Investment in Computers and
Other Office Equipment
(constant $ billions)

The Canadian governance structure is being redefined by a new relationship between the federal government and the provinces, recently outlined in the agreement on the social union. The union concerns all social programs in the social safety net including health care, all levels of education, social services, social assistance, employment insurance, personal tax policy, old age security and income supplements. Many elements of the social safety net are administered through the Income Tax Act. For this reason, the tax system, and Revenue Canada in particular, will be a key medium in co-operative federalism.

Canada's new governance structure is also influenced by shifting relationships between the state and its citizens. In Revenue Canada, and indeed throughout government, the users of public services are now characterized as clients and the administration has become more business-like. Also, fairness, openness, professionalism, respect and accountability are among the characteristics of good governance that will yield public confidence in the services offered.

Balancing the interests and preserving the rights of citizens in a fair and equitable manner is fundamental to public service.

Annual Report of the Clerk of the Privy Council, 1997

The federal public service continues to evolve as seen through the various levels of revitalization initiatives within the Public Service of Canada. Revenue Canada will be an important element of this revitalization. With a work force of over 40,000, human resources management will be a key factor for the success of the proposed Canada Customs and Revenue Agency (CCRA). The move from department to agency is expected to be a paramount internal development for Revenue Canada in the years ahead. The adoption of private sector practices in human resources management will be a major element of the CCRA. It will need to build on the existing strengths of Revenue Canada and define for itself new core competencies that will meet the international, domestic, social and technological challenges outlined above.

Roughly, 1 in 90 Canadians in the labour force works for federal departments and agencies and 1 in 350 works for Revenue Canada.

D. Financial Spending Plan

The Department carries out its mandate through one program, National Revenue , and six Business Lines, maintaining clear accountabilities with the respective national program managers.

($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Gross Budgetary Expenditures	2,639.5	2,672.0	2,678.1	2,647.3
Less: Revenues Credited to the Vote	135.7	138.5	144.0	145.6
Net Budgetary Expenditures	2,503.8	2,533.5	2,534.1	2,501.7

The 1998-1999 Forecast (Net Budgetary Expenditures) includes Supplementary Estimates B items, such as the 1997-1998 to 1998-1999 carry forwards and some policy and legislative initiatives announced in the 1997 and 1998 Federal Budgets. The total planned spending for 1998-1999, tabled at this time last year (i.e., in Main Estimates), was $2,377.3 million.

Section III
Plans, Priorities, Strategies and Expected Results

A. Summary of Priorities and Expected Results

Revenue Canada
provides Canadians with:	to be demonstrated by:
*Effective Revenue Administration*
Administration of the taxation regime for the Federal Government and certain provinces and territories by assessing and collecting taxes, duties, and other levies and payments and delivering a number of social and economic benefits in a fair and timely manner	trends in costs to collect $100 trends in the volume of enquiries processed from individuals and businesses the level of client satisfaction with the Department's client information and enquiries services implementation of electronic service delivery options and client participation rates in these options total fiscal impact of enforcement activities taxes assessed as a result of targeting the underground economy early identification and audit of avoidance and tax shelter arrangements maintaining accounts receivable at a level of 4% of gross revenues the percentage of non-audit income tax objections processed within 90 days. the level of client satisfaction in respect of the independence, timeliness and fairness of the redress processes
*Customs Border Services and Trade Administration*
Enforcement of Canadian laws and sovereignty at the border and support of Canadian industrial competitiveness and economic policies	trends in the volume of travellers and commercial shipments processed level of client satisfaction with services provided compliance rate for travellers entering Canada quantity/value of contraband goods detected and interdicted increased volumes of commercial shipments processed using ACROSS machine releases increased use of the CANPASS highway option for low-risk travellers

B. Program and Business Lines Plans

The Department is making a number of specific commitments in relation to each of its business lines. These commitments, as defined by a list of strategies and key activities, are outlined below, along with specific results statements and related performance measures.

(i) Assistance to Clients and Assessment of Returns

Objective

To foster self-assessment and compliance and to process client returns.

Description

To facilitate self-assessment and voluntary compliance, this business line consists of numerous programs aimed at ensuring that clients are aware of and fully understand their entitlements and obligations under the law. The business line includes activities related to advice to clients of their rights and obligations; providing clients with the necessary forms and information for filing returns accurately and on time; responding to client enquiries in a timely and accurate manner; assessing and processing clients' returns in a timely manner; advising clients on the results of assessments; processing of payments in a timely and accurate manner; developing and maintaining a registry of clients; and conducting limited verification of items. In some cases, these activities respond to the federal government's thrust toward reform of social policy through the assessing and processing of payments to low- and modest-income individuals and families.

Also included in this business line are an advisory function to other government departments with respect to the administrative feasibility of new legislation and treaties under negotiation; activities related to the registration of charities, pension and deferred income plans; and the provision of advance rulings on the tax implications of potential transactions.

Results

Revenue Canada must continually balance the delivery of high-quality service to clients with the management of external pressures and internal resource constraints. Over the past few years, this business line has seen considerable increases in public enquiries. While the Department expects an overall increase in the demand for telephone services over the next three years, it will mitigate this pressure by improving access to automated systems. In particular, we expect public enquiries handled by automated systems to increase from 7 to 11 million over this planning period, while public enquiries handled by agents will decrease by about 2 million. The move to increase access to automated telephone services is part of an overall departmental strategy to enhance service delivery, including incorporating the use of the Internet. By modernizing its systems to keep pace with the demand, the Department expects to achieve the following four broad results:

higher levels of client satisfaction through improvements in service such as increased accessibility, higher accuracy levels and more timely responsiveness to enquiries;
improved service and cost savings to the public through the implementation of program efficiencies, new service agreements, strengthened partnership arrangements and the integration of government services;
reduction in the compliance cost and administrative costs incurred by business and individual clients through reengineering initiatives and the application of technology; and
increased levels of compliance in key areas through enhanced identification of individual tax returns that have a greater risk of non-compliance.

Strategies and Key Activities

The following strategies and key activities will be pursued to achieve these results:

Managing and Realizing Service Improvements:

Client Services Accessibility and Accuracy Strategy: In the past, the major complaint of tax filers during our busiest season has been their inability to get through on the phone lines. Last year, with the help of automated response systems, specialized call centres in the largest urban areas and a 1-750 Call Overflow Centre in Ottawa, Revenue Canada was able to double the accessibility rates. Given the peak load of calls at specific times during the year, it is not practical to establish accessibility rates of 100%, but future plans include further technological improvements, a strategic focus on improving client satisfaction and reducing the need to call. The short-term targets include "caller" accessibility rates of 85% and phone waiting times of up to 2 minutes maximum.

Charities Service Delivery : The purpose of this project is to improve service to registered charities and other stakeholders through the implementation of process improvements. The first step will be to review the administration of the charities program to reduce cycle times and increase program efficiency and effectiveness.

T1 Validation Programs : In processing more than 22 million individual tax returns, there is a carefully constructed trade-off between the identification of higher-risk transactions, the assurance of integrity for the complete system and minimizing disruptive and labour-intensive follow-up with tax filers. The computer-assisted post-assessment reviews are being further refined and enhanced in order to develop a more focused and effective use of these various validation routines.

Beneficial Individual Client Adjustments : Revenue Canada will introduce a new process that will identify and correct all instances where clients have under-claimed tax deducted at source on their return. This change, in support of the Department's fairness agenda, will increase the transparency of the tax system for clients and will eventually lead to lower administrative costs as a result of reduction in client enquiries and requests for adjustments.

Reengineering Business Processes:

Advance Income Tax Ruling ISO 9000 Pilots : In order to improve the issuance of advance income tax rulings through more efficient business processes, this process is being certified under the ISO 9000 quality system as part of a pilot project.

T2 Redesign Project (Update) : The re-engineering of this corporate income tax processing system will be in full operation this spring. It will increase the information captured on the system and supports electronic filing by corporations. The redesigned process will provide improved service through a reduction in processing time; increased data availability for stakeholders such as Statistics Canada; and will reduce processing costs.

Continuous Process Improvement (CPI) Review of T1 Business Process : This initiative constitutes a high-level mapping of T1 processes, and the subsequent development of a simplified and more efficient approach to handle core business processes. The use of CPI methodology will result in decreased cycle times, improved flexibility, and reduced operational costs.

Excise Commercial System : This platform for processing non-GST levies (principally tobacco and alcohol) imposed under the Excise Act and Excise Tax Act is being re-engineered in three phases: in 2000, a Business Number licensing component will be introduced; in 2001, Assessing and Standardized Accounting will be added; and in 2002, a consolidated Refunds platform will be folded in. These enhancements will offer single window benefits to clients and result in some efficiency gains for Revenue Canada.

Pursuing Electronic Service Delivery:

T1 Internet Filing : This project will see the national implementation of the Internet as a filing medium for individual income tax returns in 2001-2002. More than 3 million tax filers could take advantage of this additional filing option. It will also result in administrative savings from an increased number of T1 individual income tax returns being filed electronically.

Revenue Canada Internet Site : All guides, pamphlets, interpretation bulletins and forms are now available on the Internet. Revenue Canada will be enhancing its Internet site to improve the effectiveness of the information available there.

Business Registration On-line (BRO) Workstations : Self-help business registration workstations will be installed across Canada to allow clients to register for multiple levels of government programs. This single window service delivery initiative will improve service delivery to Canadian businesses.

Automated Payment Machines: Revenue Canada is testing the use of automated payment machines in four pilot sites, as an alternative method of processing payments in the Tax Services Office (TSO). The purpose of these machines is to better serve clients who choose to make payments in person at our offices, rather than by mail or at financial institutions. This initiative will reduce walk-in flow at TSOs and improve the quality of this service to our clients.

Pursuing Partnership Arrangements:

Federal-Provincial Affairs : Work is underway to strengthen partnership arrangements with the provinces and territories through the review of all MOUs and other contractual arrangements, as well as through a modernized accountability framework. In order to further reduce federal/provincial/territorial overlap and duplication, the Department will pursue new service agreements aligned with the broader agency mandate through a business development strategy.

Services to Workers Compensation Boards : This project with Nova Scotia will provide greater efficiencies for employers by allowing them to make Workers Compensation Board payments concurrently with source deduction payments for Income Tax, CPP and EI using the same payment options.

Provincial and Territorial Refund Set-Off Program (Update ): The purpose of this initiative is to expand Revenue Canada systems capability so that individual income tax refunds are made available electronically for set-off to repay past due provincial or territorial Crown debts. Implementation began in British Columbia in 1998, and will begin in Nova Scotia and Ontario in 1999. Other provinces and territories have expressed an interest to participate in 2000.

National Child Benefit : Revenue Canada will be continuing its ongoing work with the provinces and territories to bring income support programs for children into closer harmony. Greater harmonization and program integration will lead to better service and improved government efficiency. A Quality Assurance and Compliance Strategy will target trends in client error and increase the ability to identify clients who have not received full entitlements.

Aboriginal Relations Strategic Framework : A corporate-wide review of rulings, interpretations, technical publications and administrative policies is underway as well as extensive consultations on aboriginal issues. The Department will develop a strategic framework in support of effective partnerships with aboriginal people and organizations.

Technical Assistance Framework : The development of this framework will guide technical assistance activities and market the Agency's expertise on a world wide basis. The anticipated results are increased influence in international fora through marketing of Agency expertise and services.

International Relations Strategy: The Department will develop a corporate a strategy to guide agency-wide efforts in international activities and fora.

Performance Measures

Figure 1: Public Enquiries

	Forecast 1998-1999 ¹	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Public Enquiries by Agents (000s)	22,500	20,541	20,240	20,231
Public Enquiries via Automation (000s)	7,000	9,000	11,000	11,000
Total Enquiries (000s)	29,500	29,541	31,240	31,231
Associated FTE	2,621	2,421	2,401	2,392
1 The 1998-1999 Forecast includes 2 million public enquiries by agents, and 228 associated FTE related to initiatives such as Elections Canada, Canada Pension Plan rate increase, major legislative changes, and other minor legislative changes.

Figure 2: Tax Filers by Type

(000s)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Individuals and Trusts ¹	22,402	22,743	23,079	23,421
Corporations	1,179	1,213	1,264	1,320
Goods and Services ²	1,962	2,085	2,237	2,425
Total Tax Filers	25,543	26,041	26,580	27,166
Associated FTE ³	6,185	6,265	5,975	5,892
Tax Filers per FTE	4,161	4,162	4,448	4,610
1 Includes 322,000 Trust Returns in 1998-1999 and 332,000 in each of 1999-2000, 2000-2001 and 2001-2002. 2 Excludes 506,762 tax filers registered in the province of Quebec, for a total of 2,468,924 nationally for 1998-1999; 529,141 for a total of 2,614,302 for 1999-2000; 561,172 for a total of 2,798,398 for 2000-2001; and 596,854 for a total of 3,021,429 for 2001-2002. 3 The decrease in associated FTE is due to savings resulting from the implementation of various re-engineering initiatives.

Figure 3: Processing Review of Individual Returns, Additional Tax Assessed ¹

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Returns Reviewed (000s)	900	799	799	783
Additional Tax Assessed ($000s)	95,200	87,500	87,500	88,000
1 Includes additional federal and provincial taxes assessed.

Figure 4: Matching of Individual Returns, Additional Tax Assessed ¹

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Returns Reviewed (000s)	1,425	1,225	1,675	1,675
Additional Tax Assessed ($000s) ²	243,500	230,000	260,000	260,000
1 Includes both manual and computer assisted and fully automated matching. 2 Includes additional federal and provincial taxes assessed.

Figure 5: Income Tax Rulings and Interpretations

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Advance Rulings Completed	300	300	300	300
Written Interpretations	3,000	3,000	3,000	3,000
Telephone Interpretations	20,500	20,500	20,500	20,500
Total Rulings and Interpretations	23,750	23,750	23,750	23,750
Associated FTE (includes overtime)	101	101	101	101
Fees Collected from Advance Rulings ($000s)	1,150	1,150	1,150	1,150

Figure 6: GST/HST Rulings and Interpretations

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Written Interpretations and Rulings	4,554	4,560	4,560	4,560
Verbal Interpretations	166,606	170,000	170,000	170,000
Total Interpretations and Rulings	171,160	174,560	174,560	174,560
Associated FTE (includes overtime)	193	195	195	195

(ii) Customs and Trade Administration

Objective

To enforce Canadian laws and sovereignty at the border, and support Canadian industrial competitiveness and economic policies.

Description

This business line consists of numerous programs aimed at delivering customs border and trade administration services. These services are designed to enforce Canadian laws and sovereignty at the border, and advance and support the government's foreign policy as well as domestic social and economic objectives.

The business line includes activities related to processing and controlling the movement of people, goods, and conveyances entering, leaving, or transiting through Canada; collecting customs duties; collecting consumption taxes for certain provinces; providing service for other departments and agencies; and providing advice to individuals and businesses to ensure that they are aware of and fully understand their obligations under the law. In some cases, these activities include administering duty relief measures with respect to certain imported goods, and providing information to Canadian businesses that want to take advantage of various international agreements. The business line also encompasses activities related to protecting Canadian society and industry through the detection of illegal cross-border activities such as the entry of illegal goods and inadmissible people. All of these activities indirectly support industrial competitiveness and domestic economic and social policy.

Results

The complex environment in which this business line delivers its programs is characterized by globalization, trade liberalization, and intense competition at the international level. These factors have led to significant increases in the volume of trade and the number of travellers to Canada as reflected in the forecasted increases in commercial activity and travellers processed that follow. Trade and travel activity tends to be concentrated at a selected few border locations, international airports and seaports. This means that the Department must manage a concentrated demand for services by diverse client groups: tourists, returning Canadians, Canadian business, and international business.

Revenue Canada predicts that by 2002 commercial import entries will be well over 11 million. Likewise, the Department predicts that the number of travellers will increase to approximately 112 million. In response to these increases in workload, Revenue Canada has implemented a number of process improvements to simplify and streamline the way it processes travellers and commercial entries to Canada. Currently, 10% of the travellers entering Canada by highway use CANPASS. The Department predicts that by 2002 this will have increased to 40% resulting in better service to low-risk travellers and generating operational efficiencies. Through technology, Revenue Canada is also simplifying the processing of commercial entries. Currently, machine releases account for 16% of all electronic data interchange releases. The Department predicts that this will increase to 70% by 2002. Increased participation in CANPASS highway and increased volumes of machine releases will significantly reduce concentration of trade and travel activity at border locations, airports and seaports across Canada.

Revenue Canada began an extensive consultation process with its clients and stakeholders to satisfy their growing interest to work with the Department in defining the direction of customs programs. The Department recently published the Customs Blueprint discussion paper to guide the delivery of services and programs. The Blueprint proposes a range of initiatives such as further enhancements to CANPASS, Internet-based services to small and medium businesses, enhancements to air passenger processing, carrier reengineering and a graduated system of penalties for noncompliance.

The implementation of the Blueprint initiatives and other key activities will yield four broad results:

improved service to clients through faster, more efficient and less intrusive processing of low-risk commercial shipments or low-risk travellers by using enhanced technology and partnerships with the private and public sector;
enhanced quality services to clients by focusing on client needs, implementing new approaches, and simplifying reporting processes; by reducing costs and administrative burden for the business community; and by promoting internationally harmonized and streamlined customs processes;
increased levels of compliance through the provision of education, timely information, the use of trend and risk analysis, compliance verification in areas of high risk, and the removal of barriers to compliance; and
increased protection from controlled, dangerous or illegal goods, and inadmissible persons entering or leaving Canada through a more effective enforcement program, the re-deployment of resources from low to high risk areas, and the use of risk analysis.

Strategies and Key Activities

The following strategies and key activities will be pursued to achieve these results:

Customs Blueprint : The launch of the Blueprint follows a number of years of re-engineering work done in consultation with national importing and exporting organizations, the tourism industry, other government departments, broker and carrier associations, and law enforcement agencies. This comprehensive framework sets out the proposed vision for the Customs program, with specific strategic objectives aimed at defining how this vision will be achieved. Once the Blueprint consultation process has been completed, Revenue Canada will develop business plans and a funding strategy as the basis for an action plan for the next five years. This action plan will be available in the fall of 1999.

Customs Officers Powers Implementation : New legislative provisions will take effect and expand the powers of designated customs officers to detain and arrest under the authority of the Criminal Code. These authorities and the new collaborative agreements with police agencies across Canada will result in Revenue Canada providing better protection and safer communities for Canadians.

Firearms Act Implementation : Revenue Canada is responsible for the administration of the components of the Firearms Act that affect its capacity to control the movement of firearms into, out of, and through Canada. The commercial import and export components of theFirearms Act will be implemented on April 1, 1999. The travellers import and export component will be implemented on January 1, 2001. The effective administration of firearms legislation will contribute to better protection and safer communities for Canadians.

Intransit Preclearance: One-stop intransit preclearance is a process in which international travellers, arriving from overseas and bound to the U.S.A. through Canadian airports, will proceed directly to the American Immigration and Customs preclearance inspection facilities at those airports, without first undergoing the additional inspection by Revenue Canada, as is now required. Eliminating this two-stop inspection process will allow Canadian airports to compete more effectively with their competitors and establish themselves as gateways to North America. Canadian air carriers will be positioned to capture a greater share of the lucrative intransit market to realize the full benefits of the "Open Skies" Agreement.

Performance Measures

Figure 7: Travellers

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Travellers Processed (000s) ¹	109,000	109,000	110,000	112,000
Compliance Rate: ² Air Highway	92% 98%	93% 98%	93% 98%	93% 98%
Client Satisfaction ³	92%	93%	93%	93%
1 Individuals entering Canada and reporting to Customs by any mode. 2 Travellers, by mode, who comply with the laws administered by Customs and Trade Administration. This measure is a result of statistical sampling carried out systematically at the points of entry across the country. 3 Travellers who, when surveyed, indicate that they are reasonably to very satisfied with the service they received.

Figure 8: Percentage of Traveller Volumes Processed at CANPASS Highway ¹

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
CANPASS Highway	10%	20%	30%	40%
1 At highway locations where CANPASS service exits, 40% of the traffic volume will be cleared using CANPASS within 3 years. This will be phased in with CANPASS handling the above forecasted percentages. CANPASS will be implemented nationally in 1999-2000.

Figure 9: Commercial

(000s)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Releases Processed ¹	9,584	9,609	9,634	9,659
Entry Accounting Documents Processed ²	11,575	11,605	11,635	11,665
Postal Shipments Assessed ³	1,700	1,700	1,700	1,700
Courier Shipments Released ⁴	9,500	10,700	11,900	13,900
Courier Shipments Released less than $20	12,500	13,300	14,100	14,900
1 Commercial shipments arriving by highway, air, rail and marine modes and released. 2 Customs Accounting forms (B3s) processed. 3 Customs Postal Import forms (E14s) processed. 4 Courier shipments released with a value greater than $20 and less than $1,600.

Figure 10: Percentage of Electronic Data Interchange Machine Releases

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
ACROSS Machine Releases	16%	50%	60%	70%

Figure 11: Contraband

($000s)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Contraband Seizures ¹ Value	275,000	450,000	450,000	450,000
1 Includes drugs, alcohol, jewellery and tobacco. Seizure values are difficult to forecast. Intelligence agencies globally report that criminal organizations engaged in smuggling are highly adaptive to changes in their environment, so they have changed tactics towards smaller and more frequent shipments, particularly in illicit drug trade. Consequently, seizure values are decreasing even though the number of seizures is on the rise. Given the volatility of this activity, the program is currently reviewing the reliability of seizure values as a program indicator and measure of success.

Figure 12: Appraisal and Adjustment

(000s)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Number of Entry Accounting Documents	11,575	11,605	11,635	11,665
Number of Commodity Declarations Presented	36,230	36,320	36,410	36,510
Number of Commodity Declarations Referred to Commodity Specialist Review	n/a	n/a	n/a
Adjustments Processed ¹	295	285	285	285
1 Due to changes such as reduced duty rates for United States Tariff, Tariff Simplification, Single Level of Appeal, and self-adjustment, the number of accounting documents requiring adjustments may be significantly reduced. It is difficult to accurately project any anticipated decrease. Adjustments processed will be monitored and data updated for the next report.

Figure 13: Interpretative Policy Determination and Appeals

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
SIMA Complaints from Canadian Industries ¹	27	24	24	24
SIMA Investigations (on a country basis) ²	10	34	15	15
SIMA Measures (on a country basis) ³	36	43	46	46
Valuation Policy Interpretations ⁴	0	0	0	0
Tariff Classification and Policy Interpretations ⁵	12,100	9,870	9,300	7,850
SIMA Appeals ⁶	350	400	400	400
1 SIMA (Special Import Measures Act / Anti-Dumping) figures include initial enquiries and formal complaints whether or not they lead to an investigation. 2 A country may be included more than once in this figure if it is subject to more than one investigation. This forecast is based on the number of SIMA complaints on hand which are likely to result in an investigation. 3 Number of re-investigations. A country may be included more than once in this figure if it was subject to more than one SIMA / Anti-Dumping measure. 4 While zeroes are shown against this indicator, a new indicator is currently being developed as part of the Customs and Trade Administration Performance Measurement Project. 5 Changes in these estimates for 1998-1999 through 2000-2001 relate to the delegation of authority for appeals to the regions and increased requests from regions for consultation with Headquarters. The large increase in the forecast for 1998-1999 compared to the 1998-1999 Report on Plans and Priorities reflects the large increase in rulings due to the need to amend existing rulings as a result of Tariff Simplification. 6 SIMA Appeals only. Tariff and Valuation appeals are no longer included in this indicator as they are under the responsibility of the Appeals Branch.

Figure 14: Interpretative Policy Determination and Appeals - Acceptance of Final Departmental Decisions ¹

Percentage (%)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Accepted	96	96	96	96
Upheld by External Tribunal	2	2	2	2
Overturned by External Tribunal	2	2	2	2
1 Includes decisions which are potentially appealable to an external body, where the final departmental decision does not fully agree with the appellant's contention.

iii) Verification and Enforcement

Objective

To enhance compliance with the laws administered.

Description

This business line consists of a balanced approach to verification and enforcement activities including associated client assistance and service aimed at ensuring compliance with customs and revenue laws. The activities include examinations, audits and investigations aimed at ensuring compliance with income tax and GST laws; investigations aimed at ensuring compliance with customs laws; verification and enforcement activities at the international level, including the administration of international tax agreements; the provision of information to taxpayers to encourage compliance and compliance research to allow for improved identification and strategies to deal with non compliance. This business line includes administration of the scientific research and experimental development program, the film or video production services tax credit and the flow through shares program through the provision of tax credits to qualifying businesses.

Compliance programs aim to identify the most serious cases of non-compliance, take appropriate corrective measures, and generally deter non-compliance. They also seek to reinforce compliant behaviour through risk assessment, service and education. In aggregate, they are designed to increase compliance, combat smuggling, ensure fairness in the self-assessment systems, maintain the integrity of the tax system, ensure a level playing field, and promote the exchange of information among treaty partners as well as avoid double taxation of foreign-earned income.

Tax incentive programs aim to provide client centered service while ensuring the proper application of program purposes.

Results

While about 95 percent of revenues come in voluntarily, the fiscal impact of the Department's verification and enforcement activities has increased by 42% from $3.8 billion in 1991/92 to a planned $5.6 billion in 1999/2000 ($5.3 in 1998/99). As a result of special measures undertaken to deal with the underground economy, approximately $2.4 billion in additional tax has been assessed from 1993 to March 31, 1998. There will be a continued focus in this area for 1999/2000.

The Department will continue to enhance its risk assessment techniques which includes a core audit program to better target audits and ensure that compliant taxpayers do not face the cost of an audit.

The Department has established a Quality Review Assurance program to enhance audit quality in field offices. There were a total of 33 quality assurance reviews initiated in 1997/98, 54 in 1998/99 and 81 planned for 1999/2000. The Department also conducts quality of audit consultations with tax practitioners, taxpayers and registrants. Nationally, over 200 consultations were held involving an estimated 7,000 files. The practitioners replied that in the majority of their dealings with Verification and Enforcement personnel they were either very satisfied or satisfied. Results showed that 97.5% were satisfied with the courteousness and professionalism of auditors and 82% were satisfied that audits were completed on a timely basis.

In responding to these pressures prevailing, the Department intends to achieve the results outlined below:

greater public trust in the fairness, integrity and efficiency of Canada's customs and revenue system through efforts to increase voluntary compliance and improve the level of public confidence;
greater levels of compliance through maintaining responsible levels of enforcement activity;
greater levels of compliance through increased audit coverage rates for key sectors by focussing on non-compliance issues in those sectors; and
greater levels of compliance through enhanced identification of persons not filing income tax returns or not registering for GST (based on analysis and matching data from various sources).

Strategies and Key Activities

The following strategies and key activities will be pursued to achieve these results:

Maintaining a balanced, comprehensive and dynamic approach to compliance:

International Compliance : The Department will strengthen its approach to protecting Canada's tax base internationally through measures to enhance analysis and auditing of transfer payments; address tax havens; better identify foreign accrual property income issues; effectively use foreign income verification reporting information. In addition, an International Compliance Strategy will be developed that builds on the results of a review on key non-resident tax withholding matters.
Underground Economy. Revenue Canada will enhance its approach to addressing the Underground Economy by ensuring an appropriate balance among education, service and enforcement activities. This includes continuing use of community visits with appropriate follow-up; fostering improved relationships with key industry associations; developing a social marketing campaign; and making strategic use of the new sub-contractor reporting system information.
Electronic Commerce : The Department will continue to address compliance issues emanating from electronic commerce in partnership with key groups both international and domestic and with the provinces so as to maintain Canada's international leadership
Risk Assessment : As part of ongoing improvement efforts, the Department will continue its work in updating sophisticated risk assessment models.

Continued focus on improving service:

· The following are some of the measures being taken to improve the quality of verification and enforcement programs and the service provided to clients:

Timeliness : Introducing a six month review for any outstanding audits to ensure audits and investigations are completed in a timely manner.
Fairness: Ensuring clear proposal letters with appropriate time for taxpayers to prepare rebuttals and complete responses to rebuttals.
Partnerships : Working with appropriate partners to address compliance issues in a systematic manner, for example, ensuring a proper understanding and application of the law.
Client-focus : Implementing the new client-centered approach to the SR & ED program to provide predictability, certainty and timeliness to clients. Also, extending the audit protocols for large business and introducing an "introduction to audit" pamphlet and quality review card for small and medium size business audits.
International Focus : Introducing streamlined assistance to small and medium sized business on international tax issues like transfer pricing issues and advanced pricing agreements; providing assistance to Canadian business in their dealings with other tax administrations supporting new foreign investment in Canada by working with Industry Canada to show the advantages offered through Canada's tax system, and ensuring immigrants better understand Canada's tax system.
Accessibility : Making greater use of the Department's internet site to enhance the speed and accessibility of information.

Strengthening program management:

Performance Measurement : Management Information Agreements will be enhanced to further advance the linkage of performance measures to program objectives consistent with the balanced approach to compliance.
Decision Support: An Enterprise Business Intelligence System will be developed to enhance decision-making and program management. The Department will also introduce the Compliance Measurement, Profiling and Assessment System (COMPASS), a consolidated risk assessment system that will identify non-compliance and estimate the revenue risks for all income tax filers and GST/HST accounts which, in turn, will contribute to reducing the number of compliant taxpayers subjected to audit.
ISO 9000: ISO 9000 certification, an international standard attesting to program quality and control, is being pursued for specific programs such as the Large Case File Program resulting in the recognition of improved and standardized business processes and program control to ensure improved client service to large corporations. This will be extended to other programs in future years.
Human Resources : Undertaking a number of human resources initiatives including the auditor recruitment and apprenticeship program, an accelerated auditor development program, a self-directed career development program and focussing on specific training needs in order to attract, retain and promote a vibrant workforce capable of delivering a variety of programs.
Quality Assurance : The Quality Assurance program will be extended to ensure that quality standards are met, and striving for continuous program improvement.
Employee Tools : Ensuring that instructions and manuals used by verification and enforcement employees are updated, kept evergreen and converted to a user friendly and easily searchable format to improve overall consistency and accuracy in the administration of programs.

Performance Measures

Figure 15: Verification and Enforcement Performance Measures

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Total Fiscal Impact ($ millions) ¹	5,282	5,601	5,723	5,710
Major Outputs
Files Audited	227,379	253,624	257,796	255,696
Non-Filers/Registrants - Returns/ Registrations	428,471	400,000	420,000	450,000
Investigations - Enforcement Actions	2,160	3,320	3,383	3,383
GST Domestic Rebates Processed	297,160	265,288	265,288	265,288
Non-Resident Returns Processed ²	287,077	308,100	308,100	308,100
International Tax - Other Outputs	361,452	484,086	484,086	484,086
Total Outputs	1,603,699	1,714,418	1,738,653	1,766,553
Associated FTE	9,408	9,667	9,889	9,863
1 Total Fiscal Impact includes federal and provincial tax (participating provinces only), federal tax refunds offset or reduced, interest and penalties, and present value of future tax assessable. 2 Investigations - Enforcement Actions: Planned outputs for 1999-2000 to 2001-2002 include cases investigated relating to Customs. Customs Investigations were previously reported under the Customs and Trade Administration Business Lines. Associated FTE shown above do not include FTE related to Customs Investigations.

(iv) Revenue Collections

Objective

To collect tax, levies, duties, and other amounts such as Canada Pension Plan and Employment Insurance payments.

Description

In order to ensure that clients meet their obligations and that everyone pays their fair share, this business line consists of a range of collection activities. These activities involve collecting amounts deducted at source by employers including income tax, GST, Canada Pension Plan and Employment Insurance contributions; collecting outstanding balances resulting from assessment or reassessment of both income tax and the GST; and, collecting outstanding duties and levies.

Also included as part of this business line is the issuance of rulings on whether individuals are entitled to benefits under the Canada Pension Plan and Employment Insurance Act , and other determinations made at the request of the Department of Human Resources Development.

Results

Revenue collections represents a key element of fiscal administration. Activities undertaken within this business line must ensure that amounts owed to the Crown are collected in a timely, effective and efficient manner. In this vein, Revenue Canada has gradually reduced the costs to collect revenues from to $1.20 per $100 in 1992-93 to $.97 to collect $100 in 1997-98 (before refunds and benefit payments). The successes in this area are partly a result of significant re-engineering efforts over the past few years. Revenue Canada anticipates that continued work in this area, such as the introduction of the Collections Call Centre, will generate further savings. The Department will work further to modernize the revenue collections by streamlining and simplifying business processes. The focus of this business line will be on the achievement of the following results:

more efficient processes for managing collections accounts through the streamlining and consolidation of different account types and more effective routing of accounts;
reduction in the accounts receivable inventory through the development of an all-encompassing statistical reporting system to assist in the management and analysis of accounts;
increased compliance from delinquent GST/HST filers through the use of risk profiling systems and the identification of returns, remittances, and other information or documents from non-compliant registrants; and
higher levels of compliance through a reduction in compliance costs to clients from the implementation of reengineering initiatives and simplified remittance processes.

Strategies and Key Activities

The following strategies and key activities will be pursued to achieve these results:

Collections Re-engineering (update): A national phone contact centre began handling the T1 individual revenue line in August 1997, followed by the Goods and Services Tax in October 1997. The implementation of the call centre has reduced the time for initial contact with the taxpayer and improves the efficiency in resolving outstanding accounts. The T2 business revenue line will be implemented during the first half of the upcoming year and integrated with the existing workloads of the Collections Call Centre. Other revenue lines will be integrated in accordance with the development and implementation of a common accounting platform.

Risk Profiling System (update): The design of a risk profiling system will be refined to route accounts according to compliance patterns and the potential for loss. Over the course of the year, risk profiling will be expanded to encompass not only the T1 and T2 business lines, but also application to the source deductions business line.

National GST/HST Delinquent Filing Program (Update): The Department will continue with its successful program to obtain returns and remittances from non-compliant registrants.

Revenue Collections ISO 9000 Certification Pilot : As part of the Department's ISO 9000 Pilot Projects, the accounts receivable program in Laval, Quebec, will be certified by July 1999. A second pilot , in the same location, will be undertaken in the upcoming year to attain certification for the CPP/EI rulings process.

Revenue Collections Benchmarking: The Department will play a leadership role in benchmarking best practices and exchange qualitative information in the area of revenue collections with foreign tax and customs administrations, such as the United States, Japan and the United Kingdom.

Performance Measures

Figure 16: Annual Intake and Closing of Accounts Receivable ¹

	Forecast ³ 1998-1999	Planned ³ 1999-2000	Planned ³ 2000-2001	Planned ³ 2001-2002
Annual Intake
Number of Accounts	633,240	608,105	626,348	645,139
Total Amount ($000s)	7,778,233	8,100,000	8,343,000	8,593,290
Annual Closings
Collections:
Number of Accounts	207,970	197,932	199,353	200,122
Total Collections ($000s)	5,122,935	5,731,508	5,772,643	5,794,925
Other Closings: ²
Number of Accounts	311,939	296,897	299,028	300,182
Total Amount ($000s)	1,437,360	1,608,110	1,619,651	1,625,903
Total Closings:
Number of Accounts	519,909	494,829	498,381	500,304
Total Amount ($000s)	6,560,295	7,339,618	7,392,294	7,420,828
Associated FTE	3,346	3,365	3,372	3,390
Total Closings (Number of Accounts) per FTE	155	147	148	148
Total Collections per FTE ($000s)	1,531	1,703	1,712	1,709
1 Tax Services Office Accounts only; excludes routine accounts actioned by way of computerized collection notices and Ministère du revenu du Québec activities with respect to GST. 2 "Other Closings" include accounts written off as uncollectable; and other sundry work disposal measures. 3 These numbers do not factor in the impact of the Collections Call Centre, the results of the Failure to File and the Failure to Pay processes as it is too early to accurately assess the impact of these programs on Tax Services Offices' activities.

Figure 17: Employer Accounts Program

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Number of Employer Accounts	1,321,530	1,326,000	1,354,000	1,385,000
Gross Employer Remittances of Income Tax, Canada Pension Plan Contributions, and Employment Insurance Premiums ($000)	134,140,000	134,650,660	137,478,832	140,640,324
Number of Field Examinations/Office Reviews ¹	494,953	494,953	494,953	494,953
Coverage Rate	37.4%	37.3%	36.5%	35.7%
Associated FTE	671	671	671	671
Additional Amounts Assessed ($000)	589,150	589,150	589,150	589,150
Additional Amounts Assessed per FTE ($000)	878	878	878	878
Routine Account Support FTE	249	252	279	260
Number of Accounts supported per FTE	5,307	5,262	4,853	5,327
Number of Pension Audits Completed	6,845	6,845	6,845	6,845
Number of Amended Statements of Earnings (T4s)	46,544	46,544	46,544	46,544
Associated FTE	40	40	40	40
Audits per FTE	171	171	171	171
1 Includes payroll examinations carried out in the field as well as Tax Services Offices' enforcement actions.

Figure 18: Goods and Services Tax/Harmonized Sales Tax Delinquent Filer Program

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2000-2001
Number of GST Registrants	1,962,162	2,085,161	2,237,226		2,424,575
Number of Office Reviews ¹	605,671	583,772	583,772		583,772
Associated FTE	204	141	141		141
Additional Amounts Collected ($000)	625,851	448,267	448,267		448,267
Additional Amounts Collected per FTE ($000)	3,067	3,179	3,179		3,179
1 Includes Tax Services Offices and Call Centre

Figure 19: Canada Pension Plan and Employment Insurance Rulings

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Ruling Intake ¹	91,286	99,174	102,708	102,281
Completions	90,373	98,182	101,681	101,258
Closing Inventory	11,000	11,000	11,000	11,000
Associated FTE	332	366	380	384
Completions per FTE	272	268	268	264
Completions as a % of Intake	99%	99%	99%	99%
1 Tax Services Office and Tax Centre workloads only.

(v) Appeals

Objective

To provide clients with a dispute resolution process that is fair, impartial, objective, open, transparent and timely.

Description

To provide clients with a high quality redress process, this business line includes a range of activities related to dispute resolution. These activities involve providing a fair and impartial review of contested decisions with respect to: income tax and GST/HST assessments and reassessments; requirements to pay Canada Pension Plan and Employment Insurance contributions; eligibility for GST credits; determinations of federal and some provincial/territorial Child Tax Benefits; customs seizures and forfeitures; and tariff classification, valuation and origin determinations.

Credible redress is the cornerstone of a high degree of trust in the fairness of the tax system, and plays a key role in the balance between voluntary compliance and responsible enforcement.

Results

A fair tax and customs administration is a key factor in supporting voluntary compliance. A number of years ago, Revenue Canada introduced the Fairness Provision as a way to enhance the fairness of its administration. Today, the Department's dispute resolution process is recognized as one of the best in the world. Without doubt, the recently launched 7-point Action Plan for Fairness will ensure that Revenue Canada achieves high levels of client satisfaction with its redress process today, and well into the future. Despite these advancements, the anticipated transition to Agency is providing a timely opportunity for Revenue Canada to renew its commitment to a highly credible redress mechanism. The action plan includes: developing a comprehensive guide on the rights of clients; publishing standards for the service provided; doing a better job in communicating with clients; better equipping employees to respond to client needs; identifying credits, benefits, and overpayments for clients; providing clients an opportunity to correct any omissions in their past dealings without penalty; and doing a better job applying the fairness provisions in the laws administered. Through the use of client surveys, service standards, and business process improvements, Revenue Canada is continuing its efforts to be recognized as a fair administration. The work underway in this area will yield two broad results:

greater public trust in the fairness of the revenue system through the strengthening of the redress and relief programs available; and
higher levels of client satisfaction through simplified and streamlined processes and improvement in accessibility and timeliness of service.

Strategies and Key Activities

The following strategies and key activities will be pursued to achieve these results:

Continuing to Improve Service:

Fairness Action Plan: As part of the Department's commitment to fair treatment of its clients, the7-Point Plan For Fairness recently announced by the Minister will be implemented in

1999-2000. This strategic initiative will better equip employees to provide quality client services, enhance communications, and improve the processes that have an impact on how fairly the Department treats its clients.

Appeals Renewal Initiative(ARI) (update) : Building on a national survey undertaken to determine client satisfaction with the appeals system, improvements are underway to the dispute resolution process. Several initiatives being implemented include reducing the average time to process non-complex objections; implementing service standards; further surveying to measure client satisfaction regarding fairness, impartiality, clarity of communications and overall quality. Appeals officers now offer to make available to clients all documents relevant to a disputed assessment, and officers' access to legal advice has been improved.

Customs Adjudication ISO 9000 Certification Pilot : To ensure consistently-high quality service to clients, Customs Adjudications will implement an internationally recognized system for quality (ISO 9000). Formal certification is anticipated in early 1999.

Better Program Management:

Alternative Dispute Resolution : Under current legislation, objections can only be resolved based on the facts and law. Within this legislative context, the Department, in co-operation with the Departments of Justice and Finance, is examining the present constraints on settlements and the ability to resolve cases using Alternative Dispute Resolution (ADR) techniques such as mediation. The Department is exploring ADR to determine if it can improve the process to offer taxpayers a practical approach to resolving tax disputes without relying on costly and time-consuming litigation. A pilot project to explore the feasibility of mediation for certain types of cases will be implemented in 1999.

Electronic Commerce: The Appeals computerized mainframe tax workload management system will be replaced in 1999 by a new case management system. This will facilitate enhanced control and management of inventories. As part of the Department's continuing facilitation of electronic service delivery, the feasibility of enabling clients to electronically file requests for dispute resolution through the Internet will be explored.

Improved Risk Management: Approximately two-thirds of tax objection inventories consist of files that are awaiting the outcome of court cases. To improve the handling of these "non-workables", the Department is reviewing significant cases with the Departments of Justice and Finance to determine appropriate strategies to minimize risk to the revenue base. An Appeals risk management framework has been developed and will be implemented in 1999. Also, monitoring of the quality of decisions and program results will be enhanced.

Consolidation of Redress Activities: To improve the impartiality of the redress process for trade administration disputes, functional responsibility was transferred from Customs Trade Administration to Appeals in 1998. The consolidation of redress activities within the Appeals Branch and a rationalization of the field service delivery offices will be completed in 1999. This further consolidation of the Department's main dispute resolution services has created an integrated management approach and strengthened the Department's redress capacity.

Performance Measures

Figure 20: Summary of Annual Intake of Objections, Determinations, Adjudications and Appeals, and Associated FTE

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Income Tax Objections and Appeals	55,600	60,000	61,500	64,200
GST/Excise Objections and Appeals	4,300	4,950	5,200	5,500
CPP-EI Determinations and Appeals	9,000	9,200	9,400	9,500
Customs Adjudications	3,700	4,500	4,500	4,500
Trade administration Disputes ¹	6,000	5,000	4,000	3,000
Associated FTE	1,298	1,301	1,294	1,299

1 Forecast reductions from the anticipated impact of tariff simplification, reduction in duty rates, and move to a single level of appeal.

(vi) Administration and Information Technology

Objective

To provide executive direction, information technology, and financial, administration and human resource services necessary to administer the law uniformly and economically.

Description

To provide the management and administrative support needed to administer the law uniformly and economically, this business line provides a range of central services to other areas of the organization. In aggregate, they ensure that the right people, processes and systems are in place.

These services includes the management of information technology applications and investments, such as electronic data processing; human resources management of a large and diverse workforce; the review of internal processes and programs using internal audit and program evaluation methods; the provision of office systems, security and laboratory services; and the provision of services that support results-based management, financial and resource management and the corporate management framework. Also included as part of this business line is the provision of legal advice to other areas of the organization.

Results

As the Department makes the transition to proposed agency, new businesses, new authorities and new ways of operating will emerge. These changes necessitate a thorough examination of the ways in which the business needs of the organization are supported. The emphasis is on finding ways to maximize the opportunities afforded by the new organization; streamlining, modernizing and integrating processes where possible; and reducing internal administrative costs. The pursuit of corporate services that will support the transition to agency status will yield four broad results:

improved service to internal clients and a reduction in the cost of providing IT support (for service delivery and internal data management) through a common IT infrastructure, the sharing of data and the sharing of expertise within the Department and with other departments;
more effective planning, decision-making, resource management and accountability through enhanced internal management structures, processes and systems;
greater levels of highly skilled professionals through effective human resource planning, greater labour market and workforce analysis, effective bridging and training programs; and
improved employee moral through the fostering of core values, timely and effective internal communication.

Strategies and Key Activities

The following strategies and key activities will be pursued to achieve these results:

Strengthening Corporate Management:

Corporate Performance Measurement: Revenue Canada will establish a framework of some twelve to fifteen high level indicators which will form the underpinning of the strategic management of its corporate goals and objectives. These indicators will be linked to the performance measures currently in use within the business lines and at the program delivery level in the field. The Department is beginning formal consultation in 1999 with the Treasury Board Secretariat and the Office of the Auditor General on both the overall framework and the precise nature of the measures.

Integrated Management Framework for the Agency: In order that the Agency be more effective at planning, decision-making, resource management and accountability across the organization, the Department is designing, developing, implementing and supporting an agency-compliant management framework including governance, accountability and performance management frameworks.

Establishment of a Board of Management: The Agency will have a Board of Management to provide greater provincial and territorial participation in the management of customs and revenue programs. Accordingly, the administration will need to support the selection, appointment and reporting policies, procedures and processes related to the nomination and review of the Governor in Council appointments.

Corporate Administrative System (CAS) (update): This system will integrate the majority of Revenue Canada's current administrative systems through a shared, flexible, information structure with integrated capabilities. As a result, CAS will improve the integrity and timeliness of administrative data, allow information to be viewed along horizontal lines, and reduce the resources needed to support information management.

Financial Information Strategy (FIS): FIS is a departmental system to support full accrual accounting, to improve accounting details and payment scheduling, and modernize the Receiver General systems. The system will result in better, more informed risk assessment and impact analysis of spending and resourcing decisions, as well as improved availability and higher quality of financial information for corporate performance measurement.

Enhancing Service Delivery and Business Processes:

Comprehensive Review of Service Program: In order to confirm the service imperatives and directions for the Agency and to enhance its capacity to administer new programs, this initiative involves the development and implementation of a new corporate-wide service vision and a strategic plan for service delivery.

Electronic Commerce Strategy: The Department is developing an enterprise-wide plan to expand service delivery through electronic commerce using risk management principles and where it makes business sense to do so.

Review of Access to Information and Privacy (ATIP): Using Continuous Process Improvement methodology, Revenue Canada is developing a simplified process to handle ATIP processes to increase quality, decrease cycle time, and reduce costs.

Strengthening Human Resource Management:

Agency HR Transition Plans: For the Department to make the transition to Agency, it will develop, communicate and implement human resources transition plans for employees, managers/supervisors and the human resources community. The transition plan will provide a greater understanding and acceptance of the nature of changes resulting from the Agency.

Employer Role: The proposed Agency must have a sound relationship with the unions. This initiative will be undertaken to define the role of the Agency as an employer. The initiative will look at the PSSRA certification of bargaining units, ongoing labour/management consultation mechanisms, and adoption of enhanced conflict management approaches.

Competency-Based HR Management: Under the proposed Agency, Revenue Canada will use competencies to standardize and communicate human resource requirements. Competencies will form the basis for HR planning, resourcing, self-management of careers, performance management, and indeed all aspects of HR management. Competencies will lead to the simplification and streamlining of a number of selection processes through the use of pre-qualified pools, as an example.

Learning Network, Leadership Program, Learning Advisory Council : These three initiatives will ensure a more effective use of learning dollars and more timely learning processes. The Learning Network will support learning throughout the organization. The Leadership Program will provide the framework for linking developmental opportunities to competencies and business needs. The Learning Advisory Council will provide guidance to the Agency on key HR issues.

Performance Measures

Figure 21: Administration, Information Technology and Human Resources as a Percentage of Total Department

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Total Business Line FTE	6,854	6,905	6,806	6,793
Total Department FTE	41,610	42,108	42,070	42,029
Total Business Line FTE as a Percentage of Total Department FTE	16.5	16.4	16.2%	16.2%

C. Consolidated Reporting

(i) Chart on Legislative and Regulatory Initiatives

*Legislation and Regulations*	*Expected Results*
Customs Legislation - As a result of internal study and significant consultation related to the Customs Blueprint , Revenue Canada will modernize certain reporting processes for travellers and goods.	clarification of obligations for the reporting of travellers and goods re-engineering of border processes increased capacity to address enforcement gaps
Customs Legislation - Revenue Canada will amend the Customs Act to introduce collection tools that are harmonized with other revenue programs.	clarification of collection rules collection rules harmonized with other revenue programs
Customs Legislation - Revenue Canada will amend customs legislation to create new regulations for administrative monetary penalties.	penalties that are proportionate to the severity of contraventions and based on clients' compliance history ability to address compliance shortfalls in the present penalty regime ability to support new re-engineering and business initiatives within customs

(ii) Sustainable Development Strategies

The Department first tabled its Sustainable Development Strategy (SDS) in Parliament in December 1997. The Strategy sets out Revenue Canada's commitment to systematically take into account environmental, economic and social considerations. Revenue Canada's SDS was developed in consultation with all branches, regions and other government departments.

The Department's goals and objectives for contributing to sustainable development for the next three years include: renewing commitments to sustainable development; improving communications; enhancing consultations on sustainable development with key stakeholders; expanding awareness of sustainable development; and integrating environmental components into key management frameworks and operations.

The SDS demonstrates that many of the Department's activities, some of which are outlined in other sections of this document, contribute, but are not measured for their impacts on sustainable development: a secure and confident society; a sound and prosperous economy; a safe and healthy environment; and a responsive and accountable governance. While the emphasis of the current SDS is on integrating environmental management into current decision-making processes, the future challenge will be to measure and monitor the impacts of all activities on all three components of sustainable development.

The following Chart on Sustainable Development Strategy is a summary of the targets related to each objective of the Department's SDS. This responds to the recommendation contained in the May 1998 Report of the Commissioner of the Environment and Sustainable Development, that departments need to establish a clear set of targets and present them to the House of Commons in the spring of 1999.

Environmental issues have been prioritized with due consideration of the implications on financial and human resources wherever possible. In this regard, the Department seeks to maintain a balanced approach to decision making and to achieve best value for available resources.

Chart on Sustainable Development Strategy

GOAL: Increasing internal capacities to contribute to sustainable development.
Objectives	Targets
1.1 Renew commitment to sustainable development	To integrate SD accountability into 1999/2000 key management accountability contracts with the Deputy Minister. To confirm roles, responsibilities and expectations of SD by March 31, 2000. To finalize SD policy by March 31, 2002.
1.2 Enhance internal communications to support co-ordinated contributions to sustainable development	To develop and implement a communication strategy and plan to expand employee/stakeholder awareness of SD by March 31, 2000.
1.3 Enhance understanding of the linkages between decisions, activities, and sustainable development 1.4 Provide management and employees with knowledge and skills to support sustainable development	To develop training tools to increase access to general SD and environmental information by March 31, 2000.
1.5 Enhance the internal capacity to measure, and monitor the effects of decisions and activities on socio-economic and environmental responsibilities 1.6 Promote continuous improvement	To identify performance measures for priority environmental impacts of activities on SD by March 31, 2000. To conduct an internal audit of the SD program by March 31, 2001.
1.7 Enhance partnerships in support of sustainable development 1.8 Facilitate and encourage contributions to sustainable development from clients, employees and partners	To enhance consultations with clients, employees, partners and key stakeholders to review SD opportunities by March 31, 2000. To continue working with other departments on SD issues and opportunities (ongoing).

Chart on Sustainable Development Strategy

GOAL: Integrate sustainable development considerations into decision-making plans and processes.
Objectives	Targets
2.1 Integrate socio-economic and environmental factors into overall corporate frameworks and decision-making processes 2.2 Integrate socio-economic and environmental considerations into decision-making plans and processes for programs and operations	To integrate SD into the Corporate Business Plan and into key management frameworks at the corporate, program and operational levels by March 31, 2000.
GOAL: Reduce the environmental impact of operations in support of SD objectives.
Objectives	Targets
3.1 Promote pollution prevention related to: solid wastes, storage tanks, hazardous/toxic goods, substances, wastes, ozone depleting substances and emissions 3.2 Promote the efficient use of resources for economic and environmental benefit for water, energy and paper 3.3 Confirm and manage risks responsibly	To develop and implement an environmental management system (EMS) for conserving natural resources, preventing pollution and managing risks in operations by March 31, 2002. Priorities include: compliance and due diligence related to federal statutes and regulations management of risks related to environmental emergencies, hazardous substances, emissions, and contaminated sites management of stewardship issues and opportunities related to procurement, energy efficiency, solid waste management, and water conservation practices.

(iii) Year 2000 Initiatives

The Information Technology Branch (ITB) supports the applications and databases that process the core business transactions within Revenue Canada. ITB represents 100% of the Department's overall year 2000 efforts. These efforts include:

*Initiative*	*Details*
Completing the Certification Process for Year 2000 Readiness	All of Revenue Canada's systems have been certified Year 2000-ready. The plan is to reduce the impact of the Year 2000 on business operations by minimizing implementations in 1999 so resources will be available to deal with any year 2000 irregularity that escaped the certification process.
Supporting Government-wide Mission Critical Functions	The government-wide mission critical functions (GWMC) within Revenue Canada include income tax processing; processing of the GST/HST credit and Child Tax Benefit; all financial aspects related to collecting duties and taxes; and other administrative systems for pre-clearance, clearance and inspection of cargoes and people. Systems supporting GWMC functions are undergoing testing. The Department plans on completing the implementation of these systems by September 1999 and will have contingency plans for its GWMC functions.
Testing of External Interfaces	Revenue Canada is testing all external interfaces with business partners. This testing will be completed by October 1999.

Section IV
Supplementary Information

Appendix A: Department Spending Authorities

1.1 Spending Authorities - Ministry Summary - Part II of the Estimates

1.2 Explanation of Changes from 1998-1999 to 1999-2000

Appendix B: Personnel Information

2.1 Organization Structure

2.2 Planned Full Time Equivalents (FTEs) by Business Line

Appendix C: Capital Projects Information

3.1 Capital Spending by Business Line

3.2 Capital Projects by Business Line

3.3 Status of Major Crown Projects

Appendix D: Additional Financial Information

4. Departmental Summary of Standard Objects of Expenditure

5. Program Resources by Business Line for the Estimates Year

6. Transfer Payments by Business Line

7. Revenue

8. Net Cost of Program for the Estimates Year

9.1 Revolving Fund - Statement of Operations

9.2 Revolving Fund - Statement of Changes in Financial Position

9.3 Revolving Fund - Projected Use of Authority

10. Loans, Investments and Advances by Business Line

11. Tax Expenditures

Appendix E: Other Information

12 Listing of Statutes and Regulations

13 References

Appendix A

Department Spending Authorities

1.1 Spending Authorities - Ministry Summary - Part II of the Estimates

Vote	(thousands of dollars)	1999-2000 Main Estimates	1998-1999 Main Estimates
	National Revenue
1	Operating expenditures	2,002,664	1,891,704
5	Capital expenditures	18,727	13,727
10	Contributions	95,000	92,750
(S)	Minister of National Revenue - Salary and motor car allowance	49	49
(S)	Contributions to employee benefit plans	342,067	335,067
(S)	Children's Special Allowance payments	75,000	44,000
	Total Department	2,533,507	2,377,297

Appendix A - Department Spending Authorities (continued)

1.2 Explanation of Changes from 1998-1999 to 1999-2000

Budgetary ($ millions)
1999-2000	1998-1999	Net Increase (Decrease)

2,533.5	2,377.3	156.2

The Main Estimates for the Department of Revenue Canada are $2,533.5M, a net increase of $156.2M.

The major changes are:

Impact of new Government Approvals (1998-1999)

an increase of $63.3 million to implement measures announced in the February 1998 Federal Budget;
an increase of $7.0 million for the policy and legislative initiatives announced in the February 1997 Federal Budget;
an increase of $28.7 million due to collective agreements;
an increase of $31.0 million in statutory children's special allowance payments;
an increase of $2.3 million in contributions to Quebec for the joint administration of federal and provincial tax; and
an increase of $5.9 million approved by the Treasury Board for price increase.

Impact of Previous Government Decisions (1995-1996 and 1996-1997)

an increase of $35.8 million to address the impact of the changing economy on the volume and complexity of enforcement programs;
an increase of $10.8 million relating to Salary Increment Freeze adjustment;
a decrease of $14.9 million in loan funds not being available in 1999-2000 to implement universal classification standard; and
a decrease of $5.5 million in the resource level approved for Anti Smuggling Initiatives.

Appendix B

Personnel Information

2.1 Organization Structure

Appendix B - Personnel Information

2.1 Organization Structure

The Department reports to Parliament through the Minister of National Revenue.

Headquarters Program Branches: are responsible for the development of policy, programs and procedures and provide functional guidance and direction.

The Policy and Legislation Branch : legislative development, interpretation and remission administration; international and intergovernmental relations; and the registration of charities and deferred income plans.

The Assessment and Collections Branch : tax services such as client assistance, registration, assessment, accounting, collection, the Child Tax Benefit (CTB) and the Goods and Services Tax Credit (GSTC).

The Customs and Trade Administration Branch : border services including the full range of facilitation, inspection, detention, collection and enforcement activities at all ports of entry; trade policy administration including multilateral and regional trade policy agreements, other trade policy instruments and duties relief programs.

The Verification, Enforcement and Compliance Research Branch : ensuring compliance with Excise, GST and Income Tax legislation including international transactions and non-residents.

The Appeals Branch : resolution of disputes relative to Excise, GST, HST, Income Tax, Canada Pension Plan, and Employment Insurance, customs adjudications legislation, and trade administration disputes.

Regional Operations: are responsible for the delivery of Customs and Trade Administration and Tax Services in the Atlantic, Quebec, Northern Ontario, Southern Ontario, Prairie and Pacific regions.

Corporate Services Branches: provide the necessary support for program delivery.

The Communications Branch : communications research, planning, advice, and guidance services.

The Finance and Administration Branch : finance, administration, security, resource and corporate information management, real property management, publishing of departmental documents including forms and guides, and laboratory and scientific services.

The Human Resources Branch : strategic support for major change initiatives; executive services; and programs, policies and services related to staffing, training and development, staff relations, organization, classification, human resources planning, official languages, employee assistance, pay and benefits and employment equity.

The Information Technology Branch : information technology (IT) strategy, management and operation of the network and computing infrastructure, and development of systems.

The Corporate Affairs Branch : corporate horizontal issues, employee and organizational renewal initiatives and client service quality strategies, ministerial correspondence, access to information and privacy, Parliamentary liaison, program evaluation and internal audit services.

The Legal Services Branch : counsel and legal advisory services, and coordination of Justice Canada services to the Department.

Appendix B - Personnel Information

2.1 Organization Structure

1999-2000 Resources by Organization (Functional) and Business Line¹

		Assistance to Clients and Assessment of Returns	Customs and Trade Administra-tion	Verification and Enforcement	Revenue Collections	Appeals	Administra-tion and Information Technology	Organiza-tion Total
Executive Office	FTE $M						39 4.1	39 4.1
ADM, Policy and Legislation Branch	FTE $M	814 151.1						814 151.1
ADM, Assessment and Collections Branch	FTE $M	9,312 445.0			5,562 250.0		60 4.5	14,934 699.5
ADM, Customs and Trade Administration Branch	FTE $M		7,457 393.4					7,457 393.4
ADM, Verification, Enforcement, Compliance and Research Branch	FTE $M			10,071 604.3				10,071 604.3
ADM, Appeals Branch	FTE $M					1,280 73.4		1,280 73.4
6 ADMs, Regional Operations	FTE $M						371 52.3	371 52.3
DG, Communications Branch	FTE $M	106 8.1						106 8.1
ADM, Finance and Administration Branch	FTE $M	601 92.0	18.7				2,855 255.2	3,456 365.9
ADM, Human Resources Branch	FTE $M						1,273 74.7	1,273 74.7
ADM, Information and Technology Branch	FTE $M						2,032 221.1	2,032 221.1
DG, Corporate Affairs Branch	FT $M						275 24.1	275 24.1
Totals	FTE $M	10,833 696.2	7,457 412.1	10,071 604.3	5,562 250.0	1,280 73.4	6,905 636.0	42,108 2,672.0
¹ The Performance Measures provided earlier in this document by Business Line reflect the latest strategic and operational re-allocations made by senior management for the delivery of programs in each year represented. These measures of output may not correspond exactly with the resource levels displayed by business line in Appendix B, as these adjustments were made in December 1998 following the preparation of the 1999-2000 to 2001-2002 Annual Reference Level Update (ARLU).

Appendix B - Personnel Information

2.2 Planned Full Time Equivalents (FTEs) by Business Line ¹

	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Assistance to Clients and Assessment of Returns	10,840	10,833	10,607	10,618
Customs and Trade Administration	7,508	7,457	7,441	7,435
Verification, Enforcement and Compliance Research	9,761	10,071	10,293	10,267
Revenue Collections	5,389	5,562	5,671	5,659
Appeals	1,258	1,280	1,252	1,257
Administration and Information Technology	6,854	6,905	6,806	6,793
Total	41,610	42,108	42,070	42,029
¹The Performance Measures provided earlier in this document by Business Line reflect the latest strategic and operational re-allocations made by senior management for the delivery of programs in each year represented. These measures of output may not correspond exactly with the resource levels displayed by business line in Appendix B, as these adjustments were made in December 1998 following the preparation of the 1999-2000 to 2001-2002 Annual Reference Level Update (ARLU).

Appendix C

Capital Projects Information

3.1 Capital Spending by Business Line

($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Customs and Trade Administration Business Line
New Facilities Projects	5.0	15.2	13.7	13.3
Existing Facilities	4.5	3.5		0.4
Total	9.5	18.7	13.7	13.7

Appendix C - Capital Projects Information

3.2 Capital Projects by Business Line

($ millions)	Current Estimated Total Cost	Forecast Expenditures to March 31, 1999 ¹	Planned Expenditures 1999-2000	Planned Expenditures 2000-2001	Planned Expenditures 2001-2002	Future Years'Requirements
Customs and Trade Administration Business Line
New Facilities Projects:
Coutts, Alberta	15.5	0.5	1.3	5.0	8.2	0.5
Coutts Animal Inspection, Alberta	1.0		0.1	0.4	0.5
Emerson, Manitoba	11.9	3.9	7.9	0.1
Saint-Bernard-de Lacolle, Québec	18.9	18.9
Little Gold, Yukon	1.1	0.5	0.6
Andover, New Brunswick	4.8	0.1	0.4	1.5	2.8
Osoyoos, British Columbia	10.5	0.6	4.0	5.9
Armstrong, Québec	4.8		0.1	0.3		4.4
Trout River, Québec	2.0		0.1	0.3	1.6
Kingsgate, British Columbia	5.2					5.2
Rock Island, Québec	3.5					3.5
Milltown, New Brunswick	4.3					4.3
Aldergrove, British Columbia	7.2		0.1	0.1	0.1	6.9
Cascade, British Columbia	1.4					1.4
Stanhope, Québec	5.2					5.2
Douglas, British Columbia	13.8	1.0	0.1	0.1	0.1	12.5
Midway, British Columbia	0.6					0.6
Chopaka, British Columbia	0.6					0.6
Waneta, British Columbia	0.8					0.8
Covey Hill, Québec	0.7					0.7
Franklin Center, Québec	0.5					0.5
Bebee, Québec	1.2					1.2
Forest City, New Brunswick	0.4					0.4
Snowflake, Manitoba	0.5					0.5
Piney, Manitoba	0.5					0.5
River De Chute, New Brunswick	0.4					0.4
Regway, Saskatchewan	0.1		0.1
Nelway, British Columbia	0.4		0.4

Existing Facilities Projects:
Health and Safety Projects
Other Projects	32.9	4.5	3.5		0.4	24.5
Total Spending Planned for Major Capital Projects	150.7	30.0	18.7	13.7	13.7	74.6
1 Total Spending (all years) to March 31, 1999.

3.3 Status of Major Crown Projects

Revenue Canada does not have major Crown projects

Appendix D

Additional Financial Information

4 Departmental Summary of Standard Objects of Expenditure

($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Personnel
Salaries and Wages	1,650.7	1,710.8	1,718.0	1,703.7
Contributions to Employee Benefit Plans	346.1	342.1	343.5	340.6
	1,996.8	2,052.9	2,061.5	2,044.3
Goods and Services
Transportation and Communications	168.9	147.1	146.9	141.2
Information	41.7	36.3	36.3	34.9
Professional and Special Services	117.1	102.0	101.9	98.0
Rentals	11.0	9.6	9.6	9.2
Purchased Repair and Maintenance	52.2	45.5	45.4	43.6
Utilities, Materials and Supplies	40.2	34.9	34.9	33.6
Other Subsidies and Payments	0.2	0.2	0.2	0.2
Minor Capital	62.9	54.8	54.7	52.6
	494.2	430.4	429.9	413.3
Capital
Controlled Capital	9.5	18.7	13.7	13.7
Transfer Payments
Grants (statutory payments)	44.0	75.0	78.0	81.0
Contributions	95.0	95.0	95.0	95.0
	139.0	170.0	173.0	176.0
Gross Budgetary Expenditures	2,639.5	2,672.0	2,678.1	2,647.3
Less: Revenues Credited to the Vote	(135.7)	(138.5)	(144.0)	(145.6)
Net Budgetary Expenditures	2,503.8	2,533.5	2,534.1	2,501.7

Appendix D - Additional Financial Information

5 Program Resources by Business Line for the Estimates Year

($ millions)	Budgetary
	FTE	Operating	Capital	Transfer Payments	Less: Revenues credited to the vote	Net Planned Spending
Assistance to Clients and Assessment of Returns	10,833	526.2		170.0		696.2
Customs and Trade Administration	7,457	393.4	18.7			412.1
Verification and Enforcement	10,071	604.3				604.3
Revenue Collections	5,562	250.0				250.0
Appeals	1,280	73.4				73.4
Administration and Information Technology	6,905	636.0				636.0
Revenues Credited to the Vote					(138.5)	(138.5)
Net Budgetary Expenditures	42,108	2,483.3	18.7	170.0	(138.5)	2,533.5

6 Transfer Payments by Business Line

($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Grants
Assistance to Clients and Assessment of Returns
Children's Special Allowance payments	44.0	75.0	78.0	81.0
Contributions
Assistance to Clients and Assessment of Returns
Contributions to the Province of Quebec in respect of the joint administration costs of federal and provincial sales taxes	95.0	95.0	95.0	95.0
Total Transfer Payments	139.0	170.0	173.0	176.0

6.1 Statutory Payments ¹

Statutory Payments by Business Line ($ millions)
($ millions)	Forecast 1998-1999	Planned 1999-2000		Planned 2000-2001		Planned 2001-2002
Assistance to Clients and Assessment of Returns	44.0		75.0		78.0		81.0
Total Statutory Payments	44.0		75.0		78.0		81.0
1 Represents Children's Special Allowance Statutory Vote Payments for which responsibility was transferred effective August 28, 1995 from Human Resources Development Canada (P.C. Order 1995-342).

Appendix D - Additional Financial Information (continued)

6.2 Transfer Payments ¹

Transfer Payments by Business Line ($ millions)
($ millions)	Forecast 1998-1999	Planned 1999-2000		Planned 2000-2001			Planned 2001-2002
Assistance to Clients and Assessment of Returns	95.0		95.0		95.0	95.0
Total Transfer Payments	95.0		95.0		95.0	95.0
1 Contributions to the Province of Québec in respect of the joint administration costs of federal and provincial sales taxes.

7 Revenue

($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Revenues Credited to the Consolidated Revenue Fund (CRF)	228.6	231.8	236.2	239.6
Revenue Credited to the Vote	135.7	138.5	144.0	145.6

Total Revenue	364.3	370.3	380.2	385.2

Appendix D - Additional Financial Information

7.1 Revenue Credited to the Consolidated Revenue Fund (CRF)

($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002
Non-Tax Revenues
Return on investments
Public buildings and properties' rental	0.3	0.3	0.3	0.3

Refunds of previous years' expenditures
Refunds of previous years' expenditures	1.2	1.2	1.2	1.2
Adjustment of Prior Year's Payable at Year-End	0.1	0.1	0.1	0.1

Privileges, licenses and permits
Brokers' licence fees	0.4	0.4	0.4	0.4

Services and Service Fees
Ruling fees	1.1	1.1	1.1	1.1
Special report on tax statistics	0.1	0.1	0.1	0.1
Foreign travel	0.2	0.2	0.2	0.2
Customs bonded warehouse fees	0.8	0.8	0.8	0.8
Provincial tax credit fees	9.9	10.2	10.6	10.8
Special services fees	1.4	1.4	1.4	1.4
Sufferance Warehouse Licence Fees	0.6	0.6	0.6	0.6
CANPASS	1.0	1.0	1.0	1.0
Other fees	1.0	0.9	0.9	0.9

Proceeds from Sales
Fees for Customs Information	0.1	0.1	0.1	0.1
Technical Publications	0.1	0.1	0.1	0.1
Sale of unclaimed goods, seals, etc.	0.2	0.2	0.2	0.2
Proceeds from disposal of surplus Crown assets	0.2	0.2	0.2	0.2

Other Non-Tax Revenues
Penalties
Goods and services tax	71.0	72.1	73.2	74.3
Other	5.5	5.5	5.6	5.6

Interest
Goods and services tax	71.0	72.1	73.2	74.3
Other	11.4	11.6	11.7	11.7

Miscellaneous
Investigation services seizures	2.7	2.7	2.8	2.8
Port seizures	7.8	8.0	8.1	8.1
Duty free shops	4.3	4.3	4.3	4.3
Provincial Tobacco Taxes and Alcohol Mark-ups/Levies and provincial sales tax collection fees	0.5	0.5	0.5	0.5
Visitors Rebate Program	0.8	1.0	1.2	1.3
Fines and forfeitures	8.1	8.2	8.4	8.4
Advance Pricing Agreements fees	0.2	0.3	0.3	0.3
Rental of parking space	0.2	0.2	0.2	0.2
British Columbia Family Bonus	1.5	1.5	1.5	1.5
New Brunswick Child Tax Benefit	1.0	0.8	0.8	0.8
Alberta Family Employment Tax Credit	1.5	1.4	1.4	1.4
Saskatchewan Child Benefit	0.5	0.5	0.6	0.6
Northwest Territories Child Benefit	0.4	0.4	0.4	0.4
Recovery of employee benefits	21.3	21.6	22.5	23.4
Other	0.2	0.2	0.2	0.2
Total Credited to the CRF	228.6	231.8	236.2	239.6

Appendix D - Additional Financial Information

7.2 Revenue Credited to the Vote (Respendable Revenues)

Revenues Credited to the Vote ($ millions)	Forecast 1998-1999	Planned 1999-2000	Planned 2000-2001	Planned 2001-2002

Canada Pension Plan	60.3	59.6	61.6	64.2
Employment Insurance	75.4	78.9	82.4	81.4
Total Revenues Credited to the Vote	135.7	138.5	144.0	145.6

8 Net Cost of Program for Estimates Year

($ millions)		Total
Gross Planned Spending		2,672.0

Plus:
Services Received without Charge
Accommodation provided by Public Works and Government Services Canada		160.9
Accommodation provided by Transport Canada		.1
Employer's share of employee benefit costs and insurance premiums provided by Treasury Board Secretariat		107.6
Workers' compensation benefits provided by Human Resources Development Canada		3.6
Legal Services provided by Justice Canada		40.0
Total Services Received Without Charge		312.2

Total Cost of Program		2,984.2

Less:
Revenues
Revenue Credited to the Vote		138.5
Revenue Credited to the CRF		231.8
Total Revenue		370.3
1999-2000 Estimated Net Program Cost		2,613.9

9.1 Revolving Fund - Statement of Operations

9.2 Revolving Fund - Statement of Changes in Financial Position

9.3 Revolving Fund - Projected Use of Authority

Revenue Canada does not have a revolving fund.

Appendix D - Additional Financial Information (continued)

10 Loans, Investments and Advances by Business Line

Revenue Canada does not have loans, investments or advances.

11 Tax Expenditures

Revenue Canada does not have tax expenditures.

Appendix E

Other Information

12 Listing of Statutes and Regulations

Statutes and Regulations Currently in Force

(Acts under the responsibility of the Minister of National Revenue, including certain acts for which the Minister of National Revenue has a role.)

Canada-Chile Free Trade Agreement Implementation Act

Canada-Israel Free Trade Agreement Implementation Act

Canada Pension Plan C-8 (Part I)

Canada-United States Free Trade Agreement Implementation Act

Children's Special Allowances Act, 1992 c. 48 (Schedule)

Customs Act, R.S. c. 1 (2nd Supp.)

Customs Tariff, R.S. c. 41 (3rd Supp.)

Customs and Excise Offshore Application Act C-53

Department of National Revenue Act N-16

Employment Insurance Act, 1996 c. 23 (Parts IV and VII)

Excise Act E-14

Excise Tax Act (includes GST/HST) E-15 (Part II-IX)

Export Act E-18

Export and Import Permits Act E-19

Federal-Provincial Fiscal Arrangements Act F-8

Foreign Missions and International Organizations Act

Fruit and Vegetable Customs Orders Validation Act 1988, c. 5

Importation of Intoxicating Liquors Act I-3

Income Tax Act, R.S. c. 1 (5th Supp.)

Income Tax Application Rules, R.S. c. 2 (5th Supp.)

Income Tax Conventions Interpretations Act

North American Free Trade Agreement Implementation Act

Petroleum and Gas Revenue Tax Act P-12

Privileges and Immunities (North Atlantic Treaty Organization) Act

Public Utilities Income Tax Transfer Act P-37

Special Import Measures Act S-15

Surcharge on Imports Order Act, etc., 1963 c. 18

Tax Rebate Discounting Act T-3 (SI/95-102)

Trade Marks Act T-13 (ss. 53 to 53.3)

World Trade Organization Agreement Implementation Act

Appendix E - Other Information (continued)

13 References

1997-98 and 1998-99 Reports on Plans and Priorities

1998 Income Tax Statistics

Compliance: From Vision to Strategy

Customs and Trade Administration Blueprint: A Discussion Paper

Index to Revenue Canada Services

Revenue Canada: Benefit Programs

Revenue Canada Web site (http://www.rc.gc.ca)

Date modified:: 2002-01-04

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Revenue Canada 1999-2000 Estimates A Report on Plans and Priorities

Table of Contents

Section I Messages

A. Minister's Message

B. Management Representation Statement

Section II Departmental Overview

A. Mandate, Roles and Responsibilities

B. Strategic Foundation and Objectives

Mission

Values

Vision and Strategic Goals

Corporate Objectives

C. Operating Environment

D. Financial Spending Plan

Section III Plans, Priorities, Strategies and Expected Results

A. Summary of Priorities and Expected Results

B. Program and Business Lines Plans

(i) Assistance to Clients and Assessment of Returns

Objective

Description

Results

Strategies and Key Activities

Performance Measures

(ii) Customs and Trade Administration

Objective

Description

Results

Strategies and Key Activities

Performance Measures

iii) Verification and Enforcement

Objective

Description

Results

Strategies and Key Activities

Performance Measures

(iv) Revenue Collections

Objective

Description

Results

Strategies and Key Activities

Performance Measures

(v) Appeals

Objective

Description

Results

Strategies and Key Activities

Performance Measures

(vi) Administration and Information Technology

Objective

Description

Results

Strategies and Key Activities

Performance Measures

C. Consolidated Reporting

(i) Chart on Legislative and Regulatory Initiatives

Legislation and Regulations

Expected Results

(ii) Sustainable Development Strategies

Chart on Sustainable Development Strategy

Chart on Sustainable Development Strategy

(iii) Year 2000 Initiatives

Section IV Supplementary Information

Appendix A

Department Spending Authorities

1.2 Explanation of Changes from 1998-1999 to 1999-2000

Appendix B

Personnel Information

Appendix C

Capital Projects Information

Appendix D

Additional Financial Information

Appendix E

Other Information

Section I
Messages

Section II
Departmental Overview

Section III
Plans, Priorities, Strategies and Expected Results

Section IV
Supplementary Information