Section IIAgency Overview

A. Mandate, Roles and Responsibilities
B. Strategic Foundation and Corporate Objectives
C. Factors Influencing the CCRA
D. Planned Spending

A. Mandate, Roles and Responsibilities

The Canada Customs and Revenue Agency's (CCRA) mandate flows from the Canada Customs and Revenue Agency Act, enacted on November 1, 1999.

In delivering our mandate, we

• collect revenues and administer tax laws for the federal government and for certain provinces and territories;

• provide border services and administer legislation governing international trade and travel; and

• deliver certain social and economic benefit programs to Canadians, through the tax system.

Organizational Structure

Our organizational structure is, with the exception of the addition of a new Board of Management, consistent with that of the former Revenue Canada with:

• six regions, each under the direction of an Assistant Commissioner, accountable for the delivery of the CCRA's programs in the field;

• five headquarters program branches, each under the direction of an Assistant Commissioner responsible for policy and program development and technical support to operations in the field; and

• six Assistant Commissioners responsible for corporate and common services.

Organizational Chart

Note: BL # indicates Business Line accountability

BL 1: Assistance to Clients and Assessment of Returns

BL 2: Verification and Enforcement

BL 3: Revenue Collections

BL 4: Appeals

BL 5: Customs and Trade Administration

BL 6: Administration and Information Technology

Board of Management

With the creation of the CCRA, a new element of governance was added to our organization, namely the Board of Management. The Canada Customs and Revenue Agency Act specifies that "there shall be a Board of Management of the Agency consisting of fifteen directors, including the Chair, the Commissioner, a director nominated by each province and one director nominated by the territories."

The Board of Management's relationship to the Minister of National Revenue, depicted on the preceding organization chart, reflects their responsibility for:

• overseeing the organization and administration of the CCRA and the management of its resources, services, property, personnel and contracts; and

• developing the annual Corporate Business Plan for consideration by the Minister.

The Board may also advise the Minister on matters that relate to the general administration and enforcement of the program legislation.

B. Strategic Foundation and Corporate Objectives

The CCRA is a large and complex organization that touches the lives of Canadians every day. We have a workforce of over 40,000 employees located in more than 750 locations. In an organization as large as the CCRA, it is essential that there be reference points to indicate clearly the directions in which we are headed. These reference points, known collectively as our strategic foundation, are useful both internally to our employees and externally to our clients. Our long-standing strategic foundation consists of our mission, values, vision and strategic goals.

Mission

As an agency, we are now in a better position to deliver our services in new and innovative ways. However, the basic purpose or raison-d'être of the organization is not changing.

• The CCRA'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

We deal with thousands of Canadians each day. Four enduring values guide the way in which we interact with our clients and our colleagues at the CCRA: integrity, professionalism, respect, and co-operation.

Vision and Strategic Goals

Our vision helps describe the type of organization we are striving to become. Our enduring goals support this vision.

• The CCRA's vision is to be recognized and respected by clients for our integrity, fairness, and innovation in administering high-quality, affordable programs. Our progressive stance will encourage new inter-governmental and international partnerships, fostering greater government efficiency and a stronger economic union.

We will earn our good standing with Canadians through the continued pursuit of six strategic goals.

1. Quality services and client education
To provide accessible, responsive, and reliable services at an affordable cost.

2. Responsible enforcement and border protection
To deliver fair, responsible, and effective enforcement programs in a manner that directly responds to changes in the environment.

3. Fair administration
To apply the principle of fairness diligently and consistently in all programs to sustain public confidence and encourage voluntary compliance.

4. 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.

5. Knowledgeable and skilled people
To ensure that our people have the knowledge, skills, and support needed to work effectively in an environment that promotes and recognizes exemplary performance.

6. 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

Our strategic direction is based on a framework of the six enduring strategic goals described above. Twelve corporate objectives, which are aligned with these goals will be pursued over the three-year planning period. The objectives are not in order of precedence but, collectively, represent the key areas of focus for development work and change. The chart on the next page shows the alignment between our goals and objectives. Due to the horizontal nature of our corporate objectives, most objectives are reflected in a number of the business lines.

C. Factors Influencing the CCRA

Society, the economy, and public institutions are constantly changing and evolving. These changes serve to alter the nature of, and manner in which, public services are provided around the world. While revenue and customs administration in Canada has been changing to keep pace with this evolution, the creation of the CCRA represents the most significant and dramatic change in our long, proud history. It positions us to both create and take advantage of opportunities to modernize the way we do business and, ultimately, improve our service to Canadians.

A number of trends influence our operations and are of particular importance to the discussions concerning the strategic direction for the CCRA. These are outlined below in four broad areas.

Trends in the Globalization of Economies

Globalization has had an impact on Canada and the CCRA. Canada's prosperity depends on having smooth and quick access to international markets. This has resulted in a revenue and customs organization that is playing an expanded and exciting role in the international marketplace. The Speech From the Throne in October 1999 reaffirmed that the Canada/U.S. Accord on Our Shared Border will continue to contribute to the Government of Canada's vision for customs administration for the 21^st century.

The interdependence among the world's economies is growing, and for Canada this interdependence will challenge our traditional socio-economic policies and ways of doing things.

Performance and Potential 1999
The Conference Board of Canada

The world has witnessed a remarkable increase in the integration of economies which, in turn, has influenced trade, defence, financial, and environmental policies. As integration continues, the pressures on industry and governments alike will continue to increase. For example, the pressure for international harmonization in government policies, programs, standards and regulations is growing. The benefits of harmonization are immense, especially for countries like Canada that depend on trade for a significant share of their economic wealth. Harmonization can help to promote fairer competition, contribute to increased productivity and competitiveness in industry, and improve access to foreign markets.

At the same time, however, this pressure presents challenges to many of our traditional domestic industries and businesses, and requires Canadians to re-examine issues such as national identity and national security. For example, there is the growing challenge of transnational crime that can infiltrate financial, economic, and social domains. Also, the international harmonization of policies and standards sometimes limits the scope government has to manage unique domestic issues.

In response to these international pressures, the CCRA continues to recognize international activity and influence as one of our objectives. We have complemented this with an objective to assess, detect, and manage risk. Risks associated with trends in electronic commerce, increased mobility of money, and growing interest in tax havens are specific examples.

Trends in Canada's Economy

TOTAL EMPLOYMENT

Despite some difficult years in the early to mid-90s, Canada has enjoyed good macroeconomic fundamentals: low inflation, low interest rates; a healthier fiscal situation; and improved business confidence. The Government's 1999 Economic and Fiscal Update predicts a strong economy, one which has created 600,000 new jobs since January 1998. Both the Organization of Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) project that in the year 2000, Canada will record one of the best rates of economic growth among the major industrial countries.

However, Canada's performance is lagging behind the United States in a number of areas which remains a topic of intense debate nationwide. Productivity growth, especially in the manufacturing sector is weak. Investment in research and development, and poor performance in certain provinces and territories are among the economic concerns for the nation. The Conference Board of Canada reports that Canada has emerged as a two-tiered economy: knowledge-based sectors have grown by almost 10% over the last twelve months compared to a decline of almost 3% in the resource and low-tech manufacturing industries.

AVERAGE PRIVATE SECTOR PROJECTIONS OF BUDGETARY REVENUES

As Canada moves away from its reliance on low-tech manufacturing and commodity production, its business environment and labour market are also adjusting. Canadian governments recognize that they must reduce the tax and compliance burden on businesses and individuals. They acknowledge that if they foster growth, particularly in the high-tech and service sectors, they will enjoy the fruits of rising economic prosperity: surging tax revenues and the best and brightest labour force. But, government is also cognizant of the challenges that arise from shifts in the marketplace: new sources of income, shifting business needs, increased use of e-commerce; intense competition for specialized skills, and new clients and stakeholders.

As the business environment and labour market shift, the relationship between government and the marketplace is becoming more complex and sophisticated. Transactions between government, businesses, and individuals can vary by industry or labour sector, thus requiring the government to understand the intricacies of each sector. Likewise, the tax system has become increasingly sophisticated as it is used not just to collect revenues but also to redistribute them fairly. Because the tax system is an active tool in the government's pursuit of economic, political, and social policy objectives, it is an ever-changing instrument of governance.

The challenge for the CCRA is to minimize compliance burden on Canadian business; to work with stakeholders to understand their evolving business needs; to ensure participation in the regulated economy; and to ensure a world-class workforce that adapts to a changing environment. In response to domestic pressures, we have reaffirmed our commitment to a number of objectives: pursuing service directions that align with clients' needs, which in many cases means the provision of electronic services; managing our human resources during a period of transition and change; and enhancing the fairness of all programs. All of these objectives will help to support Canadians and Canadian businesses in attaining economic prosperity.

Trends in the Role of Government

In a uniquely Canadian style, the Government of Canada is modernizing its management approach in response to today's dynamic environment. Without completely adopting a private sector model, it is transforming its role in the public forum through the introduction of a number of innovative management practices. Modern comptrollership, partnership arrangements, and alternative service delivery are among the practices being pursued.

The move to modern comptrollership is not a completely new phenomenon in government. It is being advanced through the application of integrated processes, more effective and fully-informed decision-making, clearer accountabilities, sound and flexible management of financial, human, technological, and capital resources.

SOME OF OUR FEDERAL PARTNERS

• Agriculture and Agri-Food
• Citizenship and Immigration
• Elections Canada
• Finance Canada
• Foreign Affairs and International Trade
• Health Canada
• Human Resource Development
• Industry Canada
• Justice Canada
• Royal Canadian Mounted Police
• Statistics Canada

In many cases, the integration of processes has resulted in partnership arrangements within and between government. Partnerships with other government departments (OGDs) and agencies are commonplace in the management of today's public services. The CCRA, for example, has more than 50 memoranda of understanding with OGDs, many of which involve the joint administration of legislation or the joint delivery of programs and services. In addition, partnerships between the Canadian federation, provinces, and territories are essential if government is to reduce duplication and generate efficiencies.

For the CCRA, these partnerships are often driven by the use of the tax system as a tool for delivering integrated social and economic programs. More and more, provincial and territorial governments view income-tested social programs as an effective way to redistribute income.

The CCRA has made good progress in the implementation of modern management practices. However, there are further efforts needed to move to performance-based management. The CCRA is being viewed as the medium for much of this enhancement, not as an end in itself, but with the aim of greater accountability and better service to the public. Indeed, the addition of the Board of Management will further our efforts in this area.

In response to the challenges presented by the changing role of government, the CCRA has identified a number of objectives. For example, partnering with the provinces, territories, and the voluntary sector is critical to our success. Also, an objective to implement transparent and integrated management processes is viewed as key to our success as a modern public institution that is well-managed and accountable to Canadians.

Some Internal Pressures

As the CCRA invests in new initiatives for the future, we are not overlooking the importance of a well-maintained infrastructure: our people, systems, business processes, facilities, and equipment. These all ensure our ability to meet service commitments, to launch new initiatives, to attract and retain employees, and to work in a safe environment.

SELECTED WORKLOAD VOLUMES

However, our infrastructure is being challenged on a number of fronts. Almost all areas of the organization are experiencing increases in workload volumes, complexity, and diversity-trade, travellers, tax enquiries, and tax returns, to name a few. As these increases result in program and service demands, we are being called on to manage within resource levels that are likely to remain static. At the same time, we need to invest in our infrastructure to ensure our capacity for growth.

OUR INDETERMINATE POPULATION BY AGE (as of July 1, 1999)

Similarly, the global competition for specialized labour and overall aging of the Canadian population are also affecting the CCRA. With the average age of indeterminate staff being 43 years, we face a potential loss of intellectual capital. Like other large public and private institutions, we must increase our emphasis on recruitment and retention.

In response to these socio-demographic trends, we have set objectives that will promote a corporate culture that supports the ideals of employer of choice and have in place a modern and world-class human resource system.

These are exciting times for Canada and they hold much potential for the CCRA. Given the opportunities in our external environment, the challenge will be to use and enhance our internal strengths to make the CCRA excel domestically and internationally.

D. Planned Spending

The Agency's financial spending plan is consistent with the expenditure plan as set out in the recent February 28, 2000, Federal Budget. It reflects the $87 million in spending over the three planning years announced by the Minister of Finance for modernizing the border management. The spending for future years also reflects approved funding to implement other government policy and legislative initiatives announced in previous federal budgets.

Compared to the 1999-2000 forecast spending at $2,945 million, the net planned spending after adjustments is decreasing to $2,755 million (6%) by 2002-2003. This decrease is partly due to the 1999-2000 Supplementary Estimates items for one-time technical adjustments that are reflected in the forecast spending for 1999-2000 such as carry-forwards from previous year ($57 million), impact of collective bargaining ($19 million), and rate change in the Employee Benefit Plan contributions ($10 million). The 1999-2000 Supplementary Estimates also provided for a one time receipt of $20 million to cover transition costs to the agency and $50 million in loan funding for re-engineering with loan payments contributing to decreased spending in subsequent years.

With new funding offset by these adjustments and others such as the sunsetting of $27 million after 2000-2001 for the collection of accounts receivable and $10 million in major capital after 2001-2002, the net planned spending for future years remains relatively stable.

The Agency's financial spending profile is shown on the following page.

Agency's Financial Spending Profile

($ millions)	Forecast 1999-2000 1	Planned 2000-2001	Planned 2001-2002	Planned 2002-2003
Planned Spending Less: Respendable Revenue - Revenue Credited to Vote	3,080.4 135.4	2,948.5 140.8	2,838.6 142.0	2,832.3 140.9
Total Main Estimates	2,945.0	2,807.7	2,696.6	2,691.4
Plus: Adjustments to Planned Spending 2
Money laundering - preparatory work - TB 827875	-	1.0	-	-
Money laundering - implementation 3		5.3	6.0	6.0
Tobacco litigation - TB 827796	-	1.1	-	-
Capturing T2 - corporate tax information for tax years 1998 and 1999	-	6.0	-	-
Tax administration of retroactive lump sum payments (pay equity) - TB 827860	-	3.2	7.9	2.0
Policy and legislation initiatives - TB 827584	-	-	33.4	28.0
Other technical items (e.g., Y2K loan repayment and Summit of Americas)	-	0.5	0.1	(0.3)
Modernize border management - 2000 Federal Budget 3		44.2	24.0	18.3
Additional respendable revenue - pursuant to the CCRA Act	-	6.4	9.9	9.6
	-	67.7	81.3	63.6
Revised Planned Spending	2,945.0	2,875.4	2,777.9	2,755.0
Less: Non-Respendable revenue	284.0	256.7	257.0	258.8
Respendable Revenue - Pursuant to the CCRA Act	-	30.2	30.6	30.4
Plus: Cost of Services Received Without Charge 4	312.2	316.3	316.3	316.3
Total Cost of Program	2,973.2	2,904.8	2,806.6	2,782.1

¹ The 1999-2000 Forecast includes Main Estimates plus Supplementary Estimates and other technical adjustments.

² Excludes the impact of collective agreement signed after March 31, 1999, for 2000-2001 and future years.

³ Includes costs of other government departments currently under negotiation.

⁴ Includes $160 million for accommodation for all years. The responsibility for accommodation will transfer to CCRA from PWGSC, effective April 1, 2000. The associated resources to be transferred are currently under negotiation; following that these accommodation costs will be included in Planned Spending. ^.

Full Time Equivalents 1

44,854

44,446

43,127

43,014

¹ FTE shown reflect the Planned Spending (above) prior to adjustments to planned spending.

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Date modified:

2002-01-04