Report on Plans and Priorities 2016-17
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Report on Plans and Priorities 2016-17
CRA Sustainable Development Strategy
Overview of the Federal Government's Approach to Sustainable Development
The Federal Sustainable Development Strategy (FSDS) 2013-16 presents the Government of Canada's sustainable development activities, as required by the Federal Sustainable Development Act. In keeping with the objectives of the Act to make environmental decision making more transparent and accountable to Parliament, the Canada Revenue Agency supports the implementation of the FSDS through the activities in this supplementary information table.
This Departmental Sustainable Development Strategy presents the planned contributions and expected results for FSDS Theme IV – Shrinking the Environmental Footprint – Beginning with Government.
Theme IV: Targets and Implementation Strategies
Goal 6: GHG Emissions and Energy
Target 6.1: GHG Emissions Reduction
The Government of Canada will reduce greenhouse gas (GHG) emissions from its buildings and fleets by 17% below 2005 levels by 2020.
CRA Target
A minimum of 17% below 2005 levels by 2020.
| Performance Indicator | Targeted Performance Level |
|---|---|
| Updated GHG reduction implementation plan in place by March 31, 2015. | Yes-March 31, 2015 |
| GHG emissions (kt CO2 equivalent) in fiscal year 2005-06. | 403 tonnes |
| GHG emissions (kt CO2 equivalent) in fiscal year 2016-17 | 334 tonnes |
| Percentage change in GHG emissions from fiscal year 2005-06 to fiscal year 2016-17 | 17% decrease |
| Adjustments made to base year GHG emissions. | No |
Goal 7: Waste and Asset Management
Target 7.2: Green Procurement
As of April 1, 2014, the Government of Canada will continue to take action to embed environmental considerations into public procurement, in accordance with the federal Policy on Green Procurement.
| Performance Indicator | Targeted Performance Level |
|---|---|
| Departmental approach to further the implementation of the Policy on Green Procurement in place as of April 1, 2014. | Yes-April 1, 2014 |
| Number and percentage of procurement and/or materiel management specialists who completed the Canada School of Public Service Green Procurement course (C215) or equivalent, in fiscal year 2016-17. | 100% (number will be reported in DPR) |
| Number and percentage of managers and functional heads of procurement and materiel whose performance evaluation includes support and contribution toward green procurement, in fiscal year 2016-17. | 100% (number will be reported in DPR) |
| Performance Indicator | Targeted Performance Level |
|---|---|
| Number and percentage of vehicles purchased that meet the requirements in the given fiscal year | 90% (number will be reported in DPR) |
| Performance Indicator | Targeted Performance Level |
|---|---|
| GHG emissions (CO2 equivalent) in fiscal year 2008-09 | 11,572 tonnes CO2 equivalent |
| Emissions associated with business-related air travel (CO2 equivalent) in the given fiscal year | 8,679 tonnes CO2 equivalent |
| Percentage change in GHG emissions from fiscal year 2008-09 to the current fiscal year | 25% decrease |
| Performance Indicator | Targeted Performance Level |
|---|---|
| Percentage of copy paper, publications, and envelopes purchased that meet the requirements in the given fiscal year | 90% |
| Implementation Strategy Element | |
| Leverage common-use procurement instruments where available and feasible | Seeking to reach "Achieved" |
| Train acquisition cardholders on green procurement. | Seeking to reach "Achieved" |
| Increase awareness of the Policy on Green Procurement among managers. | Seeking to reach "Achieved" |
Target 7.3: Sustainable Workplace Operations
As of April 1, 2015, the Government of Canada will update and adopt policies and practices to improve the sustainability of its workplace operations.
| Performance Indicator | Targeted Performance Level |
|---|---|
| Approach to maintain or improve the sustainability of the CRA workplace in place as of March 31, 2015. | Yes—April 1, 2014 |
| Implementation Strategy Element | |
| Engage employees in greening government operations practices. | Seeking to reach "Achieved" |
| Integrate environmental considerations into corporate policies, processes and practices in accordance with departmental refresh cycles. | Seeking to reach "Achieved" |
| Maintain or improve existing approaches to sustainable workplace practices (printer ratios, paper usage, and green meetings). | Seeking to reach "Achieved" |
| Minimize the ratio of information technology (IT) assets per employee. | Seeking to reach "Achieved" |
| Select and operate IT and office equipment in a manner that reduces energy consumption and material usage. | Seeking to reach "Achieved" |
| Dispose of e-waste in an environmentally sound and secure manner. | Seeking to reach "Achieved" |
| Reuse or recycle workplace materiel and assets in an environmentally sound and secure manner. | Seeking to reach "Achieved" |
| Minimize all non-hazardous solid waste generated, and leverage service offerings to maximize the diversion of waste. | Seeking to reach "Achieved" |
| Increase the population density in office buildings, and increase space utilization in special purpose buildings. | Seeking to reach "Achieved" |
Target 7.4: Greening Services to Clients
By March 31, 2015, departments will establish SMART targets to reduce the environmental impact of their services to clients.
| Performance Indicator | Targeted Performance Level |
|---|---|
| An approach to further greening of services to clients, taxpayers, and benefit recipients is in place by March 31, 2015 | Yes–April 1, 2014 |
Strategic Environmental Assessment
The Canada Revenue Agency will report on the results of its preliminary scans and strategic environmental assessments through its Departmental Performance Report. The CRA will continue to ensure that its decision-making process includes consideration of FSDS goals and targets through the Strategic Environmental Assessment process. An Strategic Environmental Assessment for policy, plan or program proposals includes an analysis of the impacts of the given proposal on the environment, including on FSDS goals and targets.
Public statements on the results of CRA's detailed assessment will be made public when an initiative is announced. The purpose of the public statement is to demonstrate that the environmental effects, including the impacts on achieving the FSDS goals and targets, of the approved policy, plan or program have been considered during proposal development and decision making.
Details on Transfer Payment Programs of $5 Million or More
Children's Special Allowance Payments (Statutory)
Start date: August 28, 19951
End date: Ongoing
Type of transfer payment: Other transfer payment
Type of appropriation: Annually through Estimates
Fiscal year for terms and conditions: 2015-16
Strategic Outcome: Eligible families and individuals receive timely and accurate benefit payments.
Link to CRA program alignment architecture:
- Program: Benefit Programs
- Subprogram: Statutory Children's Special Allowance payments
Description: Tax-free monthly payments made to agencies and institutions who are licensed by provincial or federal governments to provide for the care and education of children under the age of 18 who physically reside in Canada and who are not in the care of their parents. Children's Special Allowance payments are equivalent to Canada Child Tax Benefit and Universal Child Care Benefit payments and are governed by the Children's Special Allowances Act, which provides that this allowance be paid out of the Consolidated Revenue Fund.
Expected Results: Not applicable
Fiscal year of last completed evaluation: Not applicable
Decision following the results of last evaluation: Not applicable
Fiscal year of planned completion of next evaluation: Not applicable
General targeted recipient groups: Persons
Initiatives to engage applicants and recipients: Not applicable
| Type of Transfer Payment | 2015-16 Forecast Spending |
2016-17 Planned Spending |
2017-18 Planned Spending |
2018-19 Planned Spending |
|---|---|---|---|---|
| Total Grants | 0 | 0 | 0 | 0 |
| Total Contributions | 0 | 0 | 0 | 0 |
| Total Other Types of Transfer Payments1 | 237,000,000 | 289,000,000 | 294,000,000 | 299,000,000 |
| Total Transfer Payments | 237,000,000 | 289,000,000 | 294,000,000 | 299,000,000 |
Disbursements to Provinces under the Softwood Lumber Products Export Charge Act, 2006 (Statutory)
Start date: October 12, 2006
End date: October 12, 2015
Type of transfer payment: Other transfer payment
Type of appropriation: Annually through Estimates
Fiscal year for terms and conditions: 2015-16
Strategic Outcome: Taxpayers meet their obligations and Canada's revenue base is protected.
Link to CRA program alignment architecture:
- Program: Taxpayer and Business Assistance
- Subprogram: Policy, Ruling, and Interpretations
Description: The export charge, to be levied by Canada on exports of softwood lumber products to the United States, is collected and administered by the Canada Revenue Agency with support from Global Affairs Canada. Under the Softwood Lumber Products Export Charge Act, 2006, the CRA is responsible for making statutory disbursements to the provinces of the charge collected over the course of the application of the Softwood Lumber Agreement, 2006. These disbursements are reduced by several factors: refunds paid to the industry, costs for the administration and implementation of the Agreement and the Act as well as the costs incurred for certain litigation resulting from the Agreement or Act. The Act applies to the following regions: British Columbia Interior, British Columbia Coastal, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. Exports from the remaining provinces and territories are excluded.
Expected Results: Disbursements to Provinces under Softwood Lumber Products Export Charge Act, 2006 are accurate, complete and made in a timely manner.
Fiscal year of last completed evaluation: January 2011
Decision following the results of last evaluation: Continuation
Fiscal year of planned completion of next evaluation: Not applicable
General targeted recipient groups: Provinces
Initiatives to engage applicants and recipients: Not applicable
| Type of Transfer Payment | 2015-16 Forecast Spending |
2016-17 Planned Spending |
2017-18 Planned Spending |
2018-19 Planned Spending |
|---|---|---|---|---|
| Total Grants | 0 | 0 | 0 | 0 |
| Total Contributions | 0 | 0 | 0 | 0 |
| Total Other Types of Transfer Payments1, 2 | 0 | 128,000,000 | N/A | N/A |
| Total Transfer Payments | 0 | 128,000,000 | 0 | 0 |
Upcoming Internal Audits and Evaluations Over the Next Three Fiscal Years
| Title of Internal Audit | Internal Audit type | Status | Expected completion date |
|---|---|---|---|
| Audit Quality Review Program (phase 1) | Service/compliance – Thematic Assurance Plan for Agency Compliance Activities | Underway | 2016 |
| Risk Assessment and Audit File Selection for Compliance Programs | Other – Thematic Assurance Plan for Agency Compliance Activities | Underway | 2016 |
| Major Project Investment Oversight Process | Other | Underway | 2016 |
| ATIP Information Management | Integrity | Planned | 2016 |
| MOU relating to mutual cooperation and joint initiatives between the CRA and the Workplace Safety and Insurance Board of Ontario | Integrity | Planned | 2016 |
| MOU relating to information sharing between the CRA and the Saskatchewan Government Insurance | Integrity | Planned | 2016 |
| Matching and/or Processing Review Programs | Service/compliance – Thematic Assurance Plan for Agency Compliance Activities | Planned | 2017 |
| Implementation of Liaison Officer Program | Service/compliance – Thematic Assurance Plan for Agency Compliance Activities | Planned | 2017 |
| Security Assessment and Authorization | Integrity/security – Thematic Assurance Plan for IT Security | Planned | 2017 |
| IT Asset Disposal | Integrity/security – Thematic Assurance Plan for IT Security | Planned | 2017 |
| CPP/EI Base 2014-2015 Year Administrative Costs | Service/compliance | Planned | 2017 |
| Financial Administration Act (FAA) Accountabilities Audit – Administered Activities/bulk disbursements (Benefits) | Other | Planned | 2017 |
| 2011 Audit on Leave Management Action Plans (follow-up) | Follow-up | Planned | 2017 |
| Management of Discipline (follow-up) | Follow-up | Planned | 2017 |
| Agency Underground Economy Initiative | Service/compliance – Thematic Assurance Plan for Agency Compliance Activities | Planned | 2018 |
| Audit Quality Review Program (phase 2) | Service/compliance – Thematic Assurance Plan for Agency Compliance Activities | Planned | 2018 |
| Records Storage and Retrieval | Integrity | Planned | 2018 |
| Contract Bidding and Awards (follow-up) | Integrity/security – Thematic Assurance Plan for Procurement (follow-up) | Planned | 2018 |
| Application Development | Service/compliance | Planned | 2018 |
| Governance of non-RIMC IT Investments | Innovation | Planned | 2018 |
| IT Service Desk | Innovation | Planned | 2018 |
| Criminal Investigations Directorate | Service/compliance – Thematic Assurance Plan for Agency Compliance Activities | Planned | 2019 |
| IT Application Incident Management | Integrity | Planned | 2019 |
| Contract Management | Integrity/security – Thematic Assurance Plan for Procurement | Planned | 2019 |
| User Access Management (follow-up) | Integrity/security – Thematic Assurance Plan for IT Security | Planned | 2019 |
| Professional Services Supply Chain (PSSC), related Task Authorisations (TA) and Qualified Suppliers List | Integrity/security – Thematic Assurance Plan for Procurement | Planned | 2020 |
| Link to CRA Program Alignment Architecture | Title of the Evaluation | Planned Evaluation Start Date | Planned Commissioner Approval Date |
|---|---|---|---|
Program: Taxpayer and Business Assistance
|
Tax Free Savings Account | Underway | 2016 |
Program: Collections, Compliance, and Verification
|
Employer Compliance Audit (ECA) | Underway | 2016 |
Program: Assessment of Returns and Payment Processing
Program: Collections, Compliance, and Verification
Program: Reporting Compliance
|
Horizontal Compliance Management – T1 Self-Employed (phase 2) | Underway | 2017 |
Program: Assessment of Returns and Payment Processing
|
Trust (T3) Returns | 2016 | 2018 |
Program: Assessment of Returns and Payment Processing
|
Electronic Services – Individual Compliance Behaviour | 2016 | 2018 |
Program: Reporting Compliance
|
Comprehensive Review – International Tax (follow-up) | 2017 | 2018 |
Program: Appeals
|
Taxpayer Relief | 2018 | 2019 |
|
Program: Assessment of Returns and Payment Processing
Program: Collections, Compliance, and Verification
Program: Reporting Compliance
|
Corporate Intelligence and Risk Identification (formerly Compliance Risk Assessment) | 2019 | To be determined |
Planned Spending and Full-Time Equivalents
| Main Estimates, Planned Spending and Full-Time Equivalents | 2015-16 Forecast |
2016-17 Planned |
2017-18 Planned |
2018-19 Planned |
|---|---|---|---|---|
| Total Main Estimates | 3,804,844,388 | 4,085,718,183 | 3,931,353,039 | 3,921,865,822 |
| Taxpayers' Ombudsman included in Main Estimates above | (3,198,657) | (3,235,854) | (3,227,940) | (3,234,541) |
| Supplementary Estimates | ||||
| 2015 Federal Budget – Legislative Measures | 30,516,460 | – | – | – |
| 2015 Federal Budget – Enhancements to Compliance Measures | 33,422,105 | – | – | – |
| 2015 Federal Budget – "Get in Writing Campaign" for Canadian Home Builders' Association | (250,040) | – | – | – |
| Transfer from Public Services and Procurement Canada for accommodation and real property services | 19,616,890 | – | – | – |
| Other Adjustments: | ||||
| Adjustment to the respendable non-tax revenues | (1,068,775) | – | – | – |
| Planned Base Spending | 3,883,882,371 | 4,082,482,329 | 3,928,125,099 | 3,918,631,281 |
| Taxpayers' Ombudsman | 3,198,657 | 3,235,854 | 3,227,940 | 3,234,541 |
| Items not yet included in outer years' planned spending | ||||
| Carry Forward from 2014-15 | 261,445,115 | – | – | – |
| Maternity and Severance payments | 73,000,000 | – | – | – |
| Total Planned Spending5 | 4,221,526,143 | 4,085,718,183 | 3,931,353,039 | 3,921,865,822 |
| Respendable non-tax revenues pursuant to the Canada Revenue Agency Act | (168,397,480) | (166,604,106) | (161,082,878) | (160,234,943) |
| Cost of services received without charge | 448,893,534 | 452,470,955 | 452,350,893 | 451,280,463 |
| Total CRA Spending | 4,502,022,197 | 4,371,585,032 | 4,222,621,054 | 4,212,911,342 |
| Human Resources (Full-Time Equivalents) | ||||
| Canada Revenue Agency | 39,289 | 37,847 | 37,444 | 36,971 |
| Taxpayers' Ombudsman | 31 | 31 | 31 | 31 |
| Total Full-Time Equivalents | 39,320 | 37,878 | 37,475 | 37,002 |
| Planned Spending by program and Full-Time Equivalents | 2015-16 Forecast |
2016-17 Planned |
2017-18 Planned |
2018-19 Planned |
|---|---|---|---|---|
| Taxpayer and Business Assistance | 290,364,894 | 412,286,804 | 280,544,765 | 281,256,789 |
| Assessment of Returns and Payment Processing | 687,698,295 | 503,182,149 | 496,115,166 | 493,780,046 |
| Reporting Compliance | 1,092,386,302 | 1,067,140,214 | 1,062,160,684 | 1,054,616,518 |
| Collections, Compliance and Verification | 491,303,158 | 632,051,666 | 618,542,264 | 616,220,531 |
| Appeals | 182,669,682 | 185,568,739 | 185,234,324 | 185,573,890 |
| Benefit Programs | 389,834,229 | 434,832,503 | 441,578,904 | 447,739,404 |
| Internal Services | 1,084,008,294 | 847,420,254 | 843,948,992 | 839,444,103 |
| Taxpayers' Ombudsman | 3,261,289 | 3,235,854 | 3,227,940 | 3,234,541 |
| Total Planned Spending5 | 4,221,526,143 | 4,085,718,183 | 3,931,353,039 | 3,921,865,822 |
| Respendable non-tax revenue pursuant to Canada Revenue Agency Act | (168,397,480) | (166,604,106) | (161,082,878) | (160,234,943) |
| Cost of services received without charge | 448,893,534 | 452,470,955 | 452,350,893 | 451,280,463 |
| Total CRA Spending | 4,502,022,197 | 4,371,585,032 | 4,222,621,054 | 4,212,911,342 |
| Human Resources (Full-Time Equivalents) | 39,320 | 37,878 | 37,475 | 37,002 |
Sources of Respendable Non-Tax Revenue and Non-Respendable Non-Tax Revenue
| Respendable Non-Tax Revenue | 2015-16 Forecast Revenue |
2016-17 Planned Revenue |
2017-18 Planned Revenue |
2018-19 Planned Revenue |
|---|---|---|---|---|
| Taxpayer and Business Assistance | 3,361,751 | 2,789,619 | 2,726,500 | 2,510,566 |
| Assessment of Returns and Payment Processing | 15,735,348 | 11,844,140 | 11,828,153 | 11,857,536 |
| Reporting Compliance | 30,235,754 | 30,221,930 | 30,246,250 | 30,264,170 |
| Collections, Compliance and Verification | 5,942,109 | 9,662,139 | 5,606,644 | 5,197,033 |
| Appeals | 4,521,570 | 5,620,327 | 5,215,027 | 4,708,536 |
| Benefit Programs | 20,736,560 | 20,670,754 | 21,084,169 | 21,505,852 |
| Internal Services | 87,864,388 | 85,795,197 | 84,376,135 | 84,191,250 |
| Total respendable non-tax revenue | 168,397,480 | 166,604,106 | 161,082,878 | 160,234,943 |
| Details | ||||
| Refund of Previous Year's Expenditures | 1,038,478 | 1,038,478 | 1,038,478 | 1,038,478 |
| Advance Income Tax Ruling Fees | 1,659,259 | 1,416,519 | 1,416,519 | 1,416,519 |
| Advance Pricing Agreements | 348,849 | 348,849 | 348,849 | 348,849 |
| Other Services of a Regulatory Nature | 97,530 | 38,471 | 38,471 | 38,471 |
| Administration of Provincial Programs6 | 111,356,125 | 110,977,196 | 105,626,379 | 105,000,085 |
| Other Services of a Non-Regulatory Nature | 305,446 | 306,214 | 306,386 | 306,565 |
| Sales of Goods and Information Products | 172,616 | 161,792 | 161,792 | 161,792 |
| Other Fees and Charges | 387,929 | 388,223 | 388,223 | 388,223 |
| Services to Other Government Departments7 | 53,031,248 | 51,928,364 | 51,757,781 | 51,535,961 |
| Total Respendable Non-Tax Revenue | 168,397,480 | 166,604,106 | 161,082,878 | 160,234,943 |
| Non-Respendable Non-Tax Revenue | 2015-16 Forecast Revenue |
2016-17 Planned Revenue |
2017-18 Planned Revenue |
2018-19 Planned Revenue |
|---|---|---|---|---|
| Taxpayer and Business Assistance | 9,071,603 | 8,613,707 | 8,556,357 | 8,550,456 |
| Assessment of Returns and Payment Processing | 6,592,250 | 6,300,063 | 6,191,352 | 6,172,628 |
| Reporting Compliance | 8,652,818 | 8,608,030 | 8,024,290 | 7,923,754 |
| Collections, Compliance and Verification | 28,533,012 | 25,956,924 | 25,465,057 | 24,823,837 |
| Appeals | 2,754,261 | 2,540,714 | 2,504,873 | 2,498,700 |
| Benefit Programs | 2,126,124 | 2,091,954 | 1,954,779 | 1,931,153 |
| Internal Services | 8,828,264 | 9,598,753 | 9,613,144 | 9,786,134 |
| Total Non-Respendable Non-Tax Revenue | 66,558,332 | 63,710,145 | 62,309,852 | 61,686,662 |
| Details (Other Fees and Charges) | ||||
| Recovery of Employee Benefits Costs | 66,111,083 | 63,262,895 | 61,862,603 | 61,239,413 |
| Miscellaneous | 447,249 | 447,250 | 447,249 | 447,249 |
| Total Non-Respendable Non-Tax Revenue8 | 66,558,332 | 63,710,145 | 62,309,852 | 61,686,662 |
| Services Received Without Charge | 2015-16 Forecast Spending |
2016-17 Planned Spending |
2017-18 Planned Spending |
2018-19 Planned Spending |
|---|---|---|---|---|
| Contributions covering employer's share of employees' insurance premiums and expenditures (excluding revolving funds) and employer's contribution to employees' insured benefits plans and expenditures, both paid by Treasury Board of Canada Secretariat | 229,888,767 | 234,038,643 | 233,729,031 | 232,739,698 |
| Salary and associated expenditures of legal services provided by Justice Canada | 31,363,597 | 31,009,862 | 31,310,926 | 31,310,926 |
| Audit services by the Office of the Auditor General | 2,594,000 | 2,594,000 | 2,594,000 | 2,594,000 |
| Workers' compensation coverage provided by Employment and Social Development Canada | 1,287,502 | 1,223,126 | 1,161,970 | 1,103,872 |
| Payroll services provided by Public Services and Procurement Canada | 4,285,880 | 4,131,536 | 4,081,178 | 4,058,179 |
| Information technology services – Shared Services Canada | 179,473,788 | 179,473,788 | 179,473,788 | 179,473,788 |
| Total Services Received Without Charge | 448,893,534 | 452,470,955 | 452,350,893 | 451,280,463 |
| Summary of Capital Spending by program | 2015-16 Forecast Spending |
2016-17 Planned Spending |
2017-18 Planned Spending |
2018-19 Planned Spending |
|---|---|---|---|---|
| Taxpayer and Business assistance | 903,185 | 1,710,300 | 1,809,663 | 1,533,730 |
| Assessment of Returns and Payment Processing | 14,778,630 | 9,759,850 | 8,595,800 | 7,041,000 |
| Reporting Compliance | 6,253,000 | 1,860,572 | 1,299,568 | 951,893 |
| Collections, Compliance and Verification | 1,015,000 | 1,000,250 | 886,376 | 2,709,500 |
| Appeals | 415,000 | 59,000 | 25,000 | 25,000 |
| Benefit Programs | 1,284,000 | 1,446,000 | 1,878,000 | 2,881,000 |
| Internal Services | 104,044,022 | 21,230,028 | 38,521,459 | 16,698,548 |
| Taxpayers' Ombudsman | – | – | – | – |
| Total of Capital Spending | 128,692,837 | 37,066,000 | 53,015,866 | 31,840,671 |
Future-Oriented Statement of Operations
Statement of Management Responsibility
We have prepared the accompanying Future-oriented Statement of Operations of the Canada Revenue Agency (CRA) according to the accounting principles consistent with those applied in preparing the financial statements of the Government of Canada. Significant accounting policies are set out in note 4 to the Future-oriented Statement of Operations. The Future-oriented Statement of Operations is submitted for Part III of the Estimates (Report on Plans and Priorities). The information will also be presented in the CRA's Departmental Performance Report to compare with actual results.
Management is responsible for the integrity and objectivity of the information contained in this Future-oriented Statement of Operations and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of governmental priorities and consistency in the CRA's mandate and strategic objectives. Much of the Future-oriented Statement of Operations is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of this Statement of Operations, management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.
The actual results achieved for the fiscal years covered in the accompanying Future-oriented Statement of Operations will vary from the information presented and the variations may be material.
Approved by:
Original signed
Andrew Treusch
Commissioner of Revenue and Chief Executive Officer of the CRA
Original signed
Roch Huppé
Chief Financial Officer and Assistant Commissioner, Finance and Administration
Ottawa, Ontario
January 7, 2016
Canada Revenue Agency
Future-oriented Statement of Operations – Agency Activities
| Agency activity | Estimated results 2016 |
Planned results 2017 |
|---|---|---|
| Expenses (note 6) | ||
| Internal services | 1,286,989 | 1,220,307 |
| Reporting compliance | 1,144,173 | 1,164,486 |
| Collections, compliance, and verification | 803,421 | 858,143 |
| Assessment of returns and payment processing | 601,705 | 590,640 |
| Taxpayer and business assistance | 355,083 | 366,525 |
| Appeals | 236,583 | 244,464 |
| Benefit programs | 157,753 | 157,512 |
| Taxpayers' Ombudsman | 3,422 | 3,516 |
| Total expenses | 4,589,129 | 4,605,593 |
| Non-Tax Revenues (note 7) | ||
| Internal services | 155,015 | 158,189 |
| Reporting compliance | 38,889 | 38,830 |
| Collections, compliance, and verification | 200,260 | 187,484 |
| Assessment of returns and payment processing | 56,731 | 46,684 |
| Taxpayer and business assistance | 62,927 | 60,407 |
| Appeals | 20,134 | 22,042 |
| Benefit programs | 23,404 | 23,171 |
| Revenues earned on behalf of Government | (66,558) | (63,710) |
| Total non-tax revenues | 490,802 | 473,097 |
| Net cost of operations | 4,098,327 | 4,132,496 |
The accompanying notes are an integral part of this future-oriented statement of operations.
Notes to the Future-oriented Statement of Operations – Agency Activities
1. Authority and objectives
The Canada Revenue Agency (CRA) is an agent of Her Majesty in right of Canada under the Canada Revenue Agency Act. The CRA is a departmental corporation named in Schedule II of the Financial Administration Act and reports to Parliament through the Minister of National Revenue.
The mandate of the CRA is to support the administration and enforcement of tax legislation and other related legislation. The CRA provides support, advice, and services by:
(a) supporting the administration and enforcement of program legislation;
(b) implementing agreements between the Government of Canada or the CRA and the government of a province, territory or other public body performing a function of government in Canada to carry out an activity or administer a tax or program;
(c) implementing agreements or arrangements between the CRA and departments or agencies of the Government of Canada to carry out an activity or administer a program; and
(d) implementing agreements between the Government of Canada and First Nations governments to administer a tax.
The CRA collects revenues, including income and sales taxes and employment insurance premiums, administers tax legislation, delivers a number of social benefit programs to Canadians for the federal, provincial, territorial, and First Nations governments, and collects amounts, including Canada Pension Plan contributions, for other groups or organizations. It is responsible for administering and enforcing of the following acts or parts of acts: the Air Travellers Security Charge Act, the Canada Revenue Agency Act, the Children's Special Allowances Act, Part V.1 of the Customs Act, section 2 of the Energy Costs Assistance Measures Act, the Excise Act, the Excise Tax Act (including the goods and services tax (GST) and the harmonized sales tax (HST) except for GST/HST on imported goods), the Excise Act, 2001, the Income Tax Act, the Softwood Lumber Products Export Charge Act, 2006, the Universal Child Care Benefit Act, and others including various provincial acts.
In delivering its mandate, the CRA operates under the following program activities:
(a) Internal services: Provides internal services across the CRA, such as human resources management, financial management and information technology, to support the needs of programs and corporate obligations;
(b) Reporting compliance: Verifies complete and accurate disclosure by taxpayers of all required information to establish tax liabilities;
(c) Assessment of returns and payment processing: Processes and validates taxpayer returns; registers, establishes, and maintains taxpayer accounts; and, receives payments;
(d) Collections, compliance, and verification: Identifies and addresses non-compliance with taxpayer filing and remittance requirements;
(e) Taxpayer and business assistance: Assists taxpayers in meeting their obligations under the self-assessment;
(f) Appeals: Provides a dispute resolution process for taxpayers who disagree with decisions taken by the CRA;
(g) Benefit programs: Provides Canadians certain income-based benefits, credits and other services on behalf of federal, provincial (except Québec), and territorial governments;
(h) Taxpayers' Ombudsman: Addresses requests for reviews made by taxpayers and benefit recipients with respect to service matters.
2. Methodology and significant assumptions
The Future-oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Report on Plans and Priorities.
The information in the estimated results for fiscal year 2015-2016 is primarily based on actual results as at October 31, 2015 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2016-2017 fiscal year.
The main assumptions underlying the forecasts are as follows:
(a) The CRA's activities will remain substantially the same as for the previous year;
(b) Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
3. Variations and changes to the forecast financial information
While every attempt has been made to forecast final results for the remainder of 2015-2016 and for 2016-2017, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing this Future-oriented Statement of Operations the CRA has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Factors that could lead to material differences between the Future-oriented Statement of Operations and the historical statement of operations include:
(a) Implementation of new collective agreements.
(b) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
(c) The timing and amount of acquisitions and disposals of tangible capital assets may affect amortization expense and gains/losses.
Once the Report on Plans and Priorities is presented, the CRA will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.
4. Summary of significant accounting policies
For financial reporting purposes, the activities of the CRA have been divided into two sets of financial statements: Agency Activities and Administered Activities. The Future-oriented Statement of Operations – Agency Activities include only those operational revenues and expenses which are managed by the CRA and utilized in running the organization. The purpose of the distinction between Agency and Administered activities is to facilitate, among other things, the assessment of the administrative efficiency of the CRA in achieving its mandate. No future-oriented financial statements were prepared for Administered Activities because it is analogous to information presented by the Department of Finance.
The Future-oriented Statement of Operations – Agency Activities has been prepared using Government's accounting policies in effect for the year ending March 31, 2016 which are based on Canadian public sector accounting standards. A summary of significant accounting policies follows:
(a) Parliamentary appropriations
The CRA is financed by the Government of Canada through Parliamentary appropriations. Accounting for appropriations provided to the CRA does not parallel financial reporting according to Canadian public sector accounting standards, as they are based in large part on cash flow requirements. Consequently, items recognized in the Future-oriented Statement of Operations may be different from those provided through appropriations from Parliament. Note 5(b) provides a high-level reconciliation between the two bases of reporting.
(b) Expenses
Expenses for the CRA's operations are recognized, on an accrual basis, when goods are received and/or services are rendered.
(i) Services provided without charge from other government agencies and departments
Costs for services received without charge from other government agencies and departments are included in expenses and are recognized at their estimated cost (see note 8).
(ii) Vacation pay and compensatory leave
Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
(iii) Employee benefits
(iii.1) Pension benefits
All eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The CRA's contributions reflect the full cost as employer. These amounts are currently based on a multiple of an employee's required contributions and may change over time depending on the experience of the Plan. The CRA's contributions are expensed during the year in which the services are rendered.
(iii.2) Health and dental benefits
The Government of Canada sponsors an employee benefit plan (health and dental) in which the CRA participates. Employees are entitled to health and dental benefits, as provided for under labour contracts and conditions of employment. The CRA's contributions to the plan, which are provided without charge by the Treasury Board Secretariat, are recorded at cost based on a percentage of the salary expenses and charged to personnel expenses in the year incurred.
(iii.3) Severance benefits
Some employees are entitled to severance benefits, as provided for under labour contracts and conditions of employment. The cost of these benefits is accrued as employees render the services necessary to earn them.
(iii.4) Sick leave benefits
Employees are eligible to accumulate sick leave benefits until retirement or termination according to their terms of employment. Sick leave benefits are earned based on employee services rendered and are paid upon an illness or injury related absence. These are accumulating non-vesting benefits that can be carried forward to future years, but are not eligible for payment on retirement or termination, nor can these be used for any other purpose.
(iv) Allowance for doubtful accounts
An allowance for doubtful accounts is recorded where the recovery of account receivables and advances is considered uncertain.
(v) Amortization of tangible capital assets
All initial costs of $10,000 or more incurred by the CRA to acquire or develop tangible capital assets are capitalized. Similar items under $10,000 are expensed. Tangible capital assets are amortized on a straight-line basis over the estimated useful lives of assets as follows:
| Asset class | Useful life |
|---|---|
| Machinery, equipment, and furniture | 10 years |
| In-house developed software | 5-10 years |
| Vehicles and other means of transportation | 5 years |
| Information technology equipment | 5 years |
| Purchased software | 3 years |
Assets under construction/development are not amortized until completed and put into operation.
(vi) Provision for contingent liabilities
Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded.
(c) Revenues
Non-tax revenues are recognized when the services are rendered by the CRA.
Non-tax revenues that are not available for spending cannot be used to discharge the CRA's liabilities. While management is expected to maintain accounting control, it has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the CRA's gross revenues.
5. Parliamentary appropriations
The CRA receives most of its funding through annual Parliamentary appropriations. Items recognized in the Future-oriented Statement of Operations in one year may be funded through Parliamentary appropriations in prior, current, or future years. Accordingly, the RA has different net results of operations for the year on a government funding basis than on an accrual accounting basis. These differences are reconciled below.
| Reconciliation of Parliamentary appropriations to be provided and requested | Estimated results 2016 (in thousands of dollars) |
Planned results 2017 (in thousands of dollars) |
|---|---|---|
| Parliamentary appropriations — to be provided: | ||
| Vote 1 – Operating expenditures, contributions and recoverable expenses on behalf of the Canada Pension Plan and the Employment Insurance Act | 3,259,182 | 3,212,721 |
| Vote 5 – Capital expenditures | 128,693 | 79,760 |
| Spending of revenues received through the conduct of its operation pursuant to section 60 of the Canada Revenue Agency Act | 168,397 | 166,604 |
| Statutory expenditures: | ||
| Contributions to employee benefit plans | 428,172 | 432,846 |
| Children's Special Allowance Payments9 | 237,000 | 289,000 |
| Disbursements to provinces under the Softwood Lumber Products Export Charge Act, 20069,10 | – | 128,000 |
| Statutory expenditures: Minister of National Revenue – Salary and motor car allowance | 82 | 84 |
| Sub-total | 4,221,526 | 4,309,015 |
| Less: | ||
| Appropriations available for future years11 – Vote 1 | (180,603) | – |
| Appropriations available for future years11 – Vote 5 | (42,694) | – |
| Expenditures related to Administered Activities | (237,000) | (417,000) |
| Sub-total | (460,297) | (417,000) |
| Total Parliamentary appropriations to be requested | 3,761,229 | 3,892,015 |
| Reconciliation of net cost of operations to Parliamentary appropriations requested | Estimated results 2016 (in thousands of dollars) |
Planned results 2017 (in thousands of dollars) |
|---|---|---|
| Net cost of operations | 4,098,327 | 4,132,496 |
| Expenses not requiring the use of current year appropriations: | ||
| Amortization of tangible capital assets | (87,407) | (95,613) |
| Loss on disposal/write-off of tangible capital assets | (3,889) | (3,078) |
| Services to be provided without charge from other government agencies and departments (note 8) | (448,894) | (452,471) |
| Severance benefits paid | (4,981) | (472,299) |
| Other | (4,352) | (29,206) |
| Sub-total | (549,523) | (1,052,667) |
| Use of current year appropriations not affecting expenses: | ||
| Tangible capital assets acquisitions | 102,461 | 96,841 |
| Sub-total | 102,461 | 96,841 |
| Changes in future funding requirements: | ||
| Salary, vacation pay and compensatory leave | (66,680) | 158,799 |
| Employee severance benefits | 12,982 | 395,377 |
| Employee sick leave benefits | (4,735) | (5,435) |
| Sub-total | (58,433) | 548,741 |
| Non-tax revenues available for spending | 168,397 | 166,604 |
| Total Parliamentary appropriations to be requested | 3,761,229 | 3,892,015 |
6. Expenses by category
| Expenses by category | Estimated results 2016 (in thousands of dollars) |
Planned results 2017 (in thousands of dollars) |
|---|---|---|
| Personnel: | ||
| Salaries | 2,449,476 | 2,346,272 |
| Personnel: Other allowances and benefits (including employee benefits) | 934,679 | 981,458 |
| Sub-total | 3,384,155 | 3,327,730 |
| Professional and business services | 554,241 | 572,464 |
| Accommodation | 306,101 | 344,949 |
| Transportation and communications | 130,387 | 134,968 |
| Amortization of tangible capital assets | 87,408 | 95,614 |
| Equipment rentals | 33,994 | 35,193 |
| Materials and supplies | 19,799 | 20,492 |
| Interest on average accrued benefit obligations | 19,755 | 19,955 |
| Other services and expenses | 19,322 | 20,000 |
| Equipment purchases | 19,308 | 20,003 |
| Advertising, information and printing services | 8,159 | 8,444 |
| Loss on disposal/write-off of tangible capital assets | 3,889 | 3,078 |
| Repair and maintenance | 2,611 | 2,703 |
| Total expenses | 4,589,129 | 4,605,593 |
7. Non-tax revenues by category
| Non-tax revenues | Estimated results 2016 (in thousands of dollars) |
Planned results 2017 (in thousands of dollars) |
|---|---|---|
| Non-tax revenues credited to Vote 1 | ||
| Fees for administering the Employment Insurance Act | 179,196 | 175,771 |
| Fees for administering the Canada Pension Plan | 143,209 | 130,722 |
| Sub-total | 322,405 | 306,493 |
| Non-tax revenues available for spending | ||
| Administration fees – provinces and territories | 110,605 | 109,427 |
| Services fees | 55,280 | 54,692 |
| Miscellaneous respendable revenues | 2,512 | 2,485 |
| Sub-total | 168,397 | 166,604 |
| Non-tax revenues not available for spending | ||
| Recovery of employee benefit costs relating to non-tax revenue credited to Vote 1 and revenues available for spending | 66,111 | 63,263 |
| Miscellaneous non-tax revenues | 447 | 447 |
| Sub-total | 66,558 | 63,710 |
| Total non-tax revenues before revenues earned on behalf of Government | 557,360 | 536,807 |
| Revenues earned on behalf of Government | (66,558) | (63,710) |
| Total non-tax revenues | 490,802 | 473,097 |
8. Related party transactions
The CRA is related in terms of common ownership to all Government of Canada departments, agencies, and Crown corporations. Transactions with Crown corporations entered into by the CRA are in the normal course of business and on normal trade terms applicable to all individuals and enterprises. Transactions with other Government of Canada departments and agencies are conducted on a cost recovery basis.
| Related party transactions | Estimated results 2016 (in thousands of dollars) |
Planned results 2017 (in thousands of dollars) |
|---|---|---|
| Employer's contribution to the health and dental insurance plans – Treasury Board Secretariat | 229,889 | 234,039 |
| Information technology services– Shared Services Canada | 179,474 | 179,474 |
| Legal services – Justice Canada | 31,364 | 31,010 |
| Payroll services – Public Works and Government Services Canada | 4,286 | 4,131 |
| Audit services – Office of the Auditor General of Canada | 2,594 | 2,594 |
| Workers' compensation benefits – Employment and Social Development Canada | 1,287 | 1,223 |
| Total | 448,894 | 452,471 |
Table Notes
1 Other Transfer payments are based on legislation or an arrangement that normally includes a formula or schedule as one element used to determine the expenditure amount.
2 Disbursements related to export charges collected in 2015-16 will be paid in June 2016 to ensure all costs are appropriately reflected before final amounts are disbursed to the Provinces.
3 The results of the CRA's audits are posted on our Web site to promote public accountability and transparency. The planned engagements and dates are subject to change based on the 2016-2019 annual planning exercise.
4 The results of the CRA's evaluations are posted on our Web site to promote public accountability and transparency. The planned engagements and dates are subject to change based on the 2016-2019 annual planning exercise.
5 The reduction in Forecast and Planned Spending over the planning period (from $4.222 billion in 2015-16 to $3.922 billion in 2018-19) is primarily attributable to:
- certain technical adjustments that are reflected only in 2015-16 including: a carry-forward of funds from 2014-15 and funding for maternity and severance benefits;
- the sunset of funding received for special projects and the conclusion of the Softwood Lumber Agreement, as well as adjustments for accommodation and real property services, the Canada School of Public Service, and funding for the Government advertising program; and
- the implementation of initiatives to improve efficiency.
6 Comprised mainly of a basic fee charged to the provinces for recoveries provided under tax collection agreements and other provincial cost recovery initiatives (for example refund set-off and benefit programs).
7 Comprised mainly of information technology services provided to the Canada Border Services Agency.
8 This table reflects the approach taken in the Audited Financial Statements of the Agency where a clear distinction is made between Agency Activities and Administered Activities. Interest and penalties collected for personal, corporate and other taxes, which are part of the Agency’s Administered Activities rather than Agency’s Activities, are excluded.
9 In accordance with the division of activities for financial reporting purposes outlined in note 4, the payments under the Children's Special Allowances Act and the Softwood Lumber Products Export Charge Act, 2006 are reported as federal administered expenses on the Statement of Administered Expenses and Recoveries of the CRA's Financial Statements – Administered Activities.
10 The Department of Finance has estimated an amount of $128 million for the Softwood Lumber disbursement to the provinces for 2016-17. This is due to the market price of softwood lumber declining to as low as $315 US per thousand board feet, which is below the reference price of $355 US per thousand board feet, in the first part of 2015-16 and continuing at those levels until the end of the agreement in October 2015. As a result of the timing of the final audits, these payments will be disbursed in 2016-17.
11 Pursuant to section 60(1) of the Canada Revenue Agency Act, the CRA has a two-year period to utilize parliamentary appropriations.
Footnotes
1 Responsibility for Children's Special Allowance Payment was transferred from Employment and Social Development Canada, effective August 28, 1995 (P.C. Order 1995-342).
- Date modified:
- 2016-03-07