Report on Plans and Priorities 2014-15

Section 1: Organizational Expenditure Overview

Organizational profile

Minister:
The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P.

Deputy head:
Andrew Treusch

Ministerial portfolio:
National Revenue

Year established: 1999

Main legislative authorities: Canada Revenue Agency Act please consult end note number 3 on page 86.

Organizational context

Raison d'être

The minister of National Revenue is responsible for the Canada Revenue Agency (CRA), and the CRA is in turn responsible for administering, assessing, and collecting hundreds of billions of dollars in taxes annually. The tax revenue we collect is used by federal, provincial, territorial, and First Nations governments to fund the programs and services that contribute to the quality of life of Canadians. We also use our federal infrastructure to deliver billions of dollars in benefits, tax credits, and other services that support the economic and social well-being of Canadian families, children, and persons with disabilities. Our mandate is to ensure that Canadians:

• pay their required share of taxes;
• receive their rightful share of entitlements; and
• are provided with an impartial and responsive review of decisions they choose to contest.

Responsibilities

The CRA has a broad range of responsibilities. In addition to the Income Tax Act and the Excise Tax Act, we administer legislation relating to the Canada Pension Plan, employment insurance, and softwood lumber. We are responsible for enforcing legislation governing charities, collecting tobacco taxes and duties, administering registered plans, and collecting non-tax debts for the federal government.

We strive to provide exceptional service to ensure Canadians find it easy to comply with their tax obligations and recipients receive their full benefit entitlements. We are working with taxpayers and other important players in the tax system to identify service gaps, further reduce the compliance burden, and develop innovative ways to deliver services and information. As the guardians of the integrity of Canada's tax and benefits system, we are also tasked with enforcing compliance. In this role, we identify, deter, and correct non-compliant behaviour.

The CRA delivers a number of benefit and tax credit programs on behalf of the federal government. In addition, we administer a number of on-going and one-time tax credits and benefits on behalf of provincial and territorial governments. By providing services on behalf of other levels of government by eliminating, we help reduce the cost of government by preventing unnecessary administrative duplication. Having one point of service delivery also helps reduce the compliance burden on benefit recipients and taxpayers.

Finally, the CRA ensures the fairness and transparency of Canada's tax and benefits system by offering an enquiry process for taxpayers who do not agree with our decisions, a formal service complaints process for those who are not satisfied with our service, and relief to taxpayers who, through no fault of their own, find themselves unable to fully comply with their obligations.

Strategic outcomes and program alignment architecture

Strategic outcomes: Taxpayers meet their obligations and Canada's revenue base is protected

Programs: Taxpayer and business assistance

Sub-programs:

• Taxpayer services - enquiries and information products
• Policy, rulings and interpretations
• Registered plans
• Charities

Programs: Assessment of returns and payment processing

Sub-programs:

• Individual returns and payment processing
• Business returns and payment processing
• Goods and services tax administration in Quebec

Programs: Reporting compliance

Sub-programs:

• Small and medium enterprises
• International and large business
• Criminal Investigations program
• Scientific research and experimental development
• Voluntary Disclosures Program

Programs: Collections and returns compliance

Sub-programs:

• Trust accounts - compliance
• Non-filer - compliance
• Collections - tax and government programs

Programs: Appeals

Sub-programs:

• Income and commodities tax objections
• Canada Pension Plan/Employment Insurance
• Service complaints
• Taxpayer relief

Strategic outcomes: Eligible families and individuals receive timely and accurate benefit payments

Programs: Benefit programs

Sub-programs:

• Benefit programs
• Benefit enquiries
• Benefit programs administration

Internal services

Strategic outcomes

Taxpayers meet their obligations and Canada's revenue base is protected.

Performance indicators	Targets	Date to be achieved
Percentage of returns filed on time, by the specified due dates, without direct intervention on the part of the CRA	90%	March 2015
Percentage of known businesses registered for GST/HST	90%	March 2015
Percentage of reported taxes (including instalments) and source deductions that are paid on time	90%	March 2015

Eligible families and individuals receive timely and accurate benefit payments.

Performance indicators	Targets	Date to be achieved
Percentage of benefits payments issued to benefit recipients on time	99%	March 2015
Percentage of Canada child tax benefit recipients who provide complete and accurate information and receive the proper entitlement	95%	March 2015
Percentage of potentially entitled benefit recipients that receive the Canada child tax benefit (reported after each census)	95%	March 2015

Organizational priorities

Organizational priorites

Priority	Type Footnote 1	Strategic outcome
Service: Improve service to make it easier to comply	Ongoing	Taxpayers meet their obligations and Canada's revenue base is protected Taxpayer and business assistance Assessment of returns and payment processing Reporting compliance Appeals Eligible families and individuals receive timely and accurate benefit payments Benefit enquiries

Description

What are the plans for meeting this priority?

• Make our secure online service portals work for taxpayers and representatives
• Continue to introduce major new e-services
• Offer direct assistance to small and medium enterprises
• Help businesses take advantage of the SR&ED Tax Incentive Program
• Explore ways to better serve seniors, new Canadians, and first-time filers
• Continue to partner with community organizations to offer the Community Volunteer Income Tax Program
• Explore opportunities for new partnerships with tax preparers

Organizational priorites

Priority	Type Footnote 1	Strategic outcome
Compliance: Make sure all taxpayers pay their required share	Ongoing	Taxpayers meet their obligations and Canada's revenue base is protected Taxpayer and business assistance Assessment of returns and payment processing Collections and returns compliance Reporting compliance

Description

What are the plans for meeting this priority?

• Conduct compliance campaigns based on advanced analytics
• Use technology to address employer non-compliance
• Make sure tax practitioners are held accountable for the advice they give their clients
• Use new sanctions to counter the use of electronic suppression of sales software
• Establish a program to reward individuals who provide us with knowledge of major international tax non-compliance
• Require banks and other financial intermediaries to report international electronic funds transfers of $10,000 or more
• Require Canadian taxpayers with foreign income or properties to give us more detailed information

Organizational priorites

Priority	Type Footnote 1	Strategic outcomes
Integrity: Maintaining Canadians' trust	Ongoing	Taxpayers meet their obligations and Canada's revenue base is protected Internal services Appeals

Description

What are the plans for meeting this priority?

• Strengthen the guidance, training, and tools we provide to our employees
• Strengthen our personnel security screening measures
• Enhance our approach to managing breaches of integrity
• Draw on the leadership of our chief privacy officer
• Use technology to tighten controls over employee access to sensitive information
• Strengthen the integrity of our programs
• Provide taxpayers with a process for recourse when they disagree with a tax or benefit-related decision

Risk analysis

Key risks

Risk	Risk response strategy	Link to program alignment architecture
Aggressive tax planning	This is one of the CRA's top risks, because of its potential to affect the achievement of the priority in the area of compliance for the three-year planning period beginning with fiscal year 2014-15. This risk has an action plan in place that will address various schemes such as offshore tax evasion schemes. Additional activities will involve having communication campaigns, closing tax loopholes, and working with international partners to share best practices and other information that will serve to strengthen our compliance activities. More details, including indicators to help measure the effectiveness of strategies, are included in the aggressive tax planning section of this document, located in reporting compliance.	Reporting compliance
Underground economy	This is one of the CRA's top risks because it has the potential to interfere with achieving our compliance priority for the three-year planning period beginning with fiscal year 2014-15. Actions over the next three years will focus on a mix of activities such as using communication strategies and undertaking research on emerging trends to help inform and target compliance actions. The CRA will also continue to collaborate with its federal, provincial, and territorial partners to share best practices and develop innovative compliance approaches. More details, including indicators to help measure the effectiveness of strategies, are included in the underground economy section of this document located in reporting compliance.	Reporting compliance
Protection of information	This is one of the CRA's top risks, because of its potential to affect the achievement of the priority in the areas of integrity and compliance for the three-year planning period beginning with fiscal year 2014-15. An action plan is in place and will focus on enhancing our approach to managing breaches of integrity and using technology to tighten controls over employee access to sensitive information to ensure the CRA's reputation as a trusted tax administration is maintained. More details, including indicators to help measure the effectiveness of strategies, are included throughout this document, with a concentration in internal services.	Internal services

The CRA operates in a dynamic environment that constantly changes. With these changes come unpredictability, uncertainty, and ultimately risk. The CRA defines a risk as the uncertainty that surrounds future events and outcomes. It is something that may or may not happen, which must be taken into account during decision-making throughout the organization.

Enterprise risk management plays a significant role in strengthening the organization's capacity to recognize, understand, and address risks. To support the use of enterprise risk management, a corporate risk profile is developed every year which identifies and analyzes the enterprise risks that may threaten the achievement of the CRA's mandate.

When identifying risks at the enterprise level, the CRA looks not only at areas of immediate concern, but also at broad areas of potential vulnerability. By identifying and monitoring a broad range of risks, the CRA ensures that it diligently and proactively manages the potential events that could affect its ability to achieve its mandate. These risks represent uncertain future events that may or may not occur, depending on the evolution of the environment.

The following is an analysis of the three risks that could have the highest impact on the CRA's ability to achieve its objectives. Addressing these areas will help to ensure that the risks associated with maintaining the CRA's commitment to service, compliance, integrity, and innovation are well managed.

Managing risks to compliance – underground economy and aggressive tax planning

This year the CRA will continue to address risks related to non-compliance. Efforts will target aggressive tax planning, a major threat for tax administrations globally. The aggressive tax planning risk poses a direct threat to the CRA's ability to collect taxes on behalf of the Government of Canada and as such it was assessed as the top risk. Given that it is heavily influenced by factors outside the CRA's control namely, taxpayer behaviour and the economy, the CRA targets areas where it can demonstrate progress. Recent federal budgets contained several important measures that will help to address aggressive tax shelters and other aggressive tax planning schemes and the CRA will continue to implement additional actions.

Another risk that poses a threat to the revenue base is the underground economy, which has been assessed as the CRA's second highest risk. Actions to address it will target a number of sectors, including those areas where cash transactions are common. The CRA will also focus on delivering communications and outreach activities to educate taxpayers and discourage them from participating in the underground economy.

Managing risks to integrity – protection of information

The Canadian tax system is based on a self-assessment model, where taxpayers are responsible for reporting their own income and taxes owing. As such, maintaining the public's trust is of the utmost importance to the CRA as it has the potential to directly influence compliance rates. While the overwhelming majority of employees act with integrity, the CRA remains diligent in ensuring that its controls are effective in deterring and detecting anyone who may behave otherwise. The CRA is committed to maintaining a strong set of internal controls to prevent the inappropriate access, use, and disclosure of information. It continues to make enhancements to system access controls including the Identity and Access Management Project and the National Audit Trail Monitoring program.

Planned expenditures

Budgetary financial resources (planned spending – dollars)

2014–15 Main Estimates	2014–15 planned spending Footnote 2	2015–16 planned spending Footnote 2	2016–17 planned spending Footnote 2
3,861,256,109	3,876,796,322	3,775,339,870	3,749,052,873

Human resources (full–time equivalents)

	2014–15	2015–16	2016–17
Canada Revenue Agency	38,220	38,040	37,784
Taxpayers' ombudsman	31	31	31
Total (planned)	38,251	38,071	37,815

Budgetary planning summary for strategic outcomes and programs (dollars)

Strategic outcome: Taxpayers meet their obligations and Canada's revenue base is protected

Strategic outcomes, programs, and internal services	Expenditures 2011–12	Expenditures 2012–13	Forecast spending 2013–14	Main Estimates 2014–15	Planned spending 2014–15	Planned spending 2015–16	Planned spending 2016–17
Taxpayer and business assistance	530,542,287	453,280,238	333,291,371	350,017,682	350,905,225	267,093,889	260,696,720
Assessment of returns and payment processing	642,056,593	643,799,856	625,842,648	597,018,261	598,411,852	619,375,174	613,033,592
Reporting compliance	1,055,758,459	1,170,473,553	1,121,187,162	1,054,502,522	1,062,102,673	1,052,259,656	1,041,278,958
Collections and returns compliance	521,505,104	512,217,726	502,878,989	440,164,211	440,670,268	441,295,370	445,886,632
Appeals	175,063,571	192,046,153	197,714,416	194,334,428	194,675,861	191,002,004	189,591,545
Strategic outcome sub–total	2,924,926,014	2,971,817,526	2,780,914,587	2,636,037,104	2,646,765,879	2,571,026,093	2,550,487,447

Strategic outcome: Eligible families and individuals receive timely and accurate benefit payments

Strategic outcomes, programs, and internal services	Expenditures 2011–12	Expenditures 2012–13	Forecast spending 2013–14	Main Estimates 2014–15	Planned spending 2014–15	Planned spending 2015–16	Planned spending 2016–17
Benefit programs	369,783,357	383,719,460	389,407,671	390,354,003	390,442,143	391,983,010	394,904,973
Strategic outcome sub–total	369,783,357	383,719,460	389,407,671	390,354,003	390,442,143	391,983,010	394,904,973

Strategic outcome: Taxpayers and benefit recipients receive an independent and impartial review of their service–related complaints

Strategic outcomes, programs, and internal services	Expenditures 2011–12	Expenditures 2012–13	Forecast spending 2013–14	Main Estimates 2014–15	Planned spending 2014–15	Planned spending 2015–16	Planned spending 2016–17
Taxpayers' Ombudsman Footnote 3	2,730,896	2,622,557	3,244,301	3,167,366	3,167,366	3,169,366	3,170,366
Strategic outcome sub–total	2,730,896	2,622,557	3,244,301	3,167,366	3,167,366	3,169,366	3,170,366
Internal services	1,053,851,359	960,308,600	1,206,114,880	831,697,636	836,420,934	809,161,401	800,490,087
Total	4,351,291,626	4,318,468,143	4,379,681,438	3,861,256,109	3,876,796,322	3,775,339,870	3,749,052,873

The reduction in forecast/planned spending over the planning period (from $4.380 billion in 2013–14 to $3.749 billion in 2016–17) is primarily attributable to:

• certain technical adjustments that are reflected only in 2013–14 – a carry–forward from 2012–13 ($299.8 million) and funding for maternity and severance benefits ($75 million);
• the planned spending in 2015–16 and subsequent years does not include a forecast of disbursements to the provinces for Softwood Lumber Products Export Charge Act, 2006, which is not yet available ($80 million in 2014–15); and
• the gradual implementation of savings measures arising from the Budget 2012 spending review as well as the Budget 2013 targeted review.

Alignment to Government of Canada outcomes

2014–15 planned spending by Whole–of–Government framework spending area (dollars), see the end note number 7 on page 86.

Strategic outcomes: Taxpayers meet their obligations and Canada's revenue base is protected

Program	Spending area	Government of Canada outcome	2014–15 planned spending
Taxpayer and business assistance	Government affairs	A transparent, accountable, and responsive federal government	350,905,225
Assessment of returns and payment processing	Government affairs	Well–managed and efficient government operations	598,411,852
Reporting compliance	Government affairs	Well–managed and efficient government operations	1,062,102,673
Collections and returns compliance	Government affairs	Well–managed and efficient government operations	440,670,268
Appeals	Government affairs	A transparent, accountable, and responsive federal government	194,675,861

Strategic outcomes: Eligible families and individuals receive timely and accurate benefit payments

Program	Spending area	Government of Canada outcome	2014–15 planned spending
Benefit programs	Economic affairs	Income security and employment for Canadians	390,442,143

Strategic outcomes: Taxpayers and benefit recipients receive an independent and impartial review of their service–related complaints

Program	Spending area	Government of Canada outcome	2014–15 planned spending
Taxpayers' Ombudsman	Government affairs	A transparent, accountable, and responsive federal government	3,167,366

2014–15 planned spending by Whole–of–Government framework spending area (dollars), see the end note number 7 on page 86.

2014–15 planned spending

Spending area	2014–15 planned spending
Economic affairs	390,442,143
Social affairs	–
International affairs	–
Government affairs	2,649,933,245

CRA spending trend

Planned spending refers to those amounts for which a Treasury Board submission approval has been received by no later than February 1, 2014. This cut–off date differs from the Main Estimates process. Therefore, planned spending may include amounts incremental to planned expenditure levels presented in the 2014–15 Main Estimates.

As shown in the planned spending trend figure on the right, the total spending includes all parliamentary appropriations (Main Estimates and Supplementary Estimates) and revenue sources. These include funding appropriated to the Canada Revenue Agency for: policy and operational initiatives arising from various federal budgets and economic statements; transfers from the Department of Public Works and Government Services Canada for accommodations and real property services; disbursements under the Softwood Lumber Agreement; responsibilities related to the administration of corporate tax in Ontario and the harmonization of sales tax in Ontario and British Columbia and the children's special allowance payments.

For fiscal years 2011–12 to 2013–14, total spending includes certain technical adjustments, such as the CRA's carry forward adjustments from the previous year and funding for maternity and severance benefits.

Planned spending trend (in dollars)

	Actuals 2011-2012	Actuals 2012-2013	Forecast Spending 2013-2014	Planned Spending 2014-2015	Planned Spending 2015-2016	Planned Spending 2016-2017
Sunset Programs				130,396,200	55,534,010	45,000,000
Total Spending	4,610,141,309	4,318,468,143	4,379,681,438	3,746,400,122	3,719,805,860	3,704,052,873

The CRA's appropriations also show a decline in fiscal years 2011–12 to 2016–17 primarily as a result of:

• the gradual implementation of savings measures arising from the Budget 2012 spending review and the Budget 2013 targeted review savings; and
• the fluctuation in the CRA's Statutory Authorities for the Children's Special Allowance payments for eligible children in the care of agencies and institutions, the disbursements to the provinces under the Softwood Lumber Products Export Charge Act, 2006, the rates for the contributions to employee benefit plans, and the spending of revenues received through the conduct of operations pursuant to Section 60 of the Canada Revenue Agency Act.

The October 16, 2013 Speech from the Throne signalled that the Government will freeze the overall federal operating budget, which is not reflected in the Main Estimates or this Plan. The CRA is preparing mitigation strategies to enable it to operate within the available operating budget.

The planned spending trend figure also depicts funding in fiscal years 2014–15 to 2016–17 that will eventually "sunset", i.e., related to the Softwood Lumber Agreement (expiring after 2015–16) and the project to upgrade the CRA's personal income tax processing system.

As depicted in the CRA activities figure, over the same period, the CRA's work volumes, as measured by totalling administered revenues and value of benefit payments processed, have been trending upward.

The Federal and Provincial Benefits payments decreased in 2012–2013 due to the sunset of the Ontario Sales Tax transition benefit.

CRA activities (millions of dollars)

	2010-11	2011-12	2012-13
Total administered revenues	310,759.9	334,731.5	346,838.3
Federal and provincial benefits payments	22,090.0	22,264.6	21,819.9

Estimates by vote

For information on the CRA's organizational appropriations, see the end note number 2 on page 86.

Contribution to the federal sustainable development strategy

The 2013–16 Federal Sustainable Development Strategy, tabled on November 4, 2013, guides the Government of Canada's 2013–16 sustainable development activities. The strategy articulates Canada's federal sustainable development priorities for a three–year period, as required by the Federal Sustainable Development Act.

The CRA contributes to theme IV – Shrinking the Environmental Footprint – Beginning with Government, as denoted by the visual identifier below.

For more details on the CRA's activities to support sustainable development, see Section II of this document and see end note number 4 on page 86. For complete details on the Federal Sustainable Development Strategy, see the end note number 1 on page 86.

Date modified:

2014-03-06