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Introduction

Mission

To administer tax, benefits, and related programs, and ensure compliance on behalf of governments across Canada, thereby contributing to the ongoing economic and social well-being of Canadians.

Vision

The CRA is the model for trusted tax and benefit administration, providing unparalleled service and value to its clients, and offering its employees outstanding career opportunities.

Values

• Integrity
• Professionalism
• Respect
• Co-operation

Promise

Contributing to the well-being of Canadians and the efficiency of government by delivering world-class tax and benefit administration that is responsive, effective, and trusted.

Section I: Agency Overview

Message from the Minister

Each year, the Canada Revenue Agency (CRA) administers billions of dollars in tax revenue and distributes timely and accurate benefit payments to millions of Canadians. Since becoming an agency almost ten years ago, the CRA has firmly entrenched itself as a high-performance, national organization with an unparalleled capacity for program delivery.

The CRA remains committed to implementing ambitious initiatives to simplify the tax process for small and medium-sized businesses and to sustaining the focus on burden reduction in the years to come in a manner consistent with its overall accountability for tax compliance and revenue collection. In addition, responding to feedback from its stakeholders, the CRA is taking concrete steps to improve service to Canadians to ensure that they are treated in a fair and consistent manner.

The Prime Minister has established public service renewal as a key priority for the Government of Canada. A critical part of this renewal calls for federal departments and agencies to look ahead to future business objectives so they can identify the skills and knowledge they need in their workforce. In this Report on Plans and Priorities, the CRA has taken up this challenge by further integrating human resources and business planning. The plan covers the challenges it faces and actions it will take to support the renewal of the CRA and the public service as a whole.

Maintaining the confidence of Canadians in the integrity of our tax system will always be essential to our success. The CRA’s dedication to excellence in its operations and workplace provides assurance that Canadians can continue to have confidence in the CRA as a fair and accountable tax administrator.

The Honourable Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue

Executive Summary

As the Canada Revenue Agency (CRA) approaches its tenth anniversary, it has established itself as a high-performance, national organization with a state of the art capacity and leading edge technology for program delivery. The Reports on Plans and Priorities 2009-2010 outlines the strategies we will pursue to build on this strong performance, while we strive to achieve our vision to be the model for trusted tax and benefit administration, providing unparalleled service and value to our clients, and offering our employees outstanding career opportunities.

Pursuant to our mandate, the CRA is governed by two strategic outcomes:

• Taxpayers meet their obligations and Canada’s revenue base is protected; and
• Eligible families and individuals receive timely and correct benefit payments.

Canada’s tax system is based on self-assessment and voluntary compliance. Our approach to administering Canada’s tax laws relies on effective risk management to identify compliance risks and assess them for their potential effect on the revenue base. Each service we deliver is integrated with our compliance strategies and must consider our costs and capacity as well as the needs and expectations of Canadians. In addition, fundamental to our capacity to deliver our mission-critical programs and services is a sound information technology infrastructure.

In response to the challenges and opportunities we have identified in our operating environment, our focus over the planning period will be on the following:

• Tax integrity – Making non-compliance harder by taking additional active and consistent steps to combat tax cheating and by improving communication and information-sharing with federal and international stakeholders to permit rapid response to emerging compliance threats.
• Strengthening service – Making compliance easier by integrating our Service Strategy to expand self-service options, optimizing telephone service, and fine-tuning our outreach and communication efforts.
• Business sustainability – Fostering excellence in program delivery by investing in employee development, strengthening our information technology resources, and further strengthening protection of taxpayer information.

By delivering benefit programs and related services, the CRA supports the efforts of governments to assist families and children, low- and moderate-income households, and persons with disabilities. To maintain our strong performance in benefit programs delivery, we will focus on the following over the planning period.

• Strengthening service – We will improve our communications and enhance our electronic service offerings to promote high enrolment.
• Benefits validation – We will further refine our validation program activities and work to create a credible enforcement presence while educating benefit recipients about their rights and obligations.
• Maintaining effective relationships – We will work closely with our government clients to provide services that fully respond to their needs.

In today’s ever-changing economic reality, now more than ever, Canadians expect a well-functioning tax and benefits system. Taxpayers and benefit recipients trust us with their information, and our government clients have confidence that we will be responsible in our dealings with Canadians. Implementing the initiatives indicated over the period covered by this plan will serve to enhance our ability to achieve our strategic outcomes.

Our Operating Environment

The Canada Revenue Agency (CRA) conducts environmental scans to better understand the external environment. We also conduct risk assessments to assess and address threats and opportunities that may affect our ability to achieve our strategic outcomes. Our Board of Management adds a broad public- and private-sector perspective to this process.

Government Environment

The recent Speech from the Throne outlined federal government priorities. It reiterated the Government’s commitment to renew the Public Service of Canada and to put in place an affordable compensation regime for the Government of Canada. Although the CRA is a separate employer, it is anticipated that these priorities will have some impact on the CRA. Budget 2009 announced tax relief measures that will impact the CRA’s administration of Canada’s tax system, such as adjustments to tax rates, certain withdrawal limits, and benefit thresholds, as well as the introduction of the new Home Renovation Tax Credit.

The federal government continues to deal with the residual impact of previous events on Canadians’ trust of government. The protection of information and Canadians’ perception of good service and responsible enforcement play a significant role in maintaining Canadians’ level of trust in the CRA.

Economy

Budget 2009 announced that the global economy is in the worst recession since the 1930s. Real GDP is expected to retract and the Minister of Finance announced that, based on current uncertainties, the Government of Canada has planned budget deficits for the next four fiscal years to support the economy. The benchmark Bank of Canada interest rate has dropped to its lowest level ever and recent economic declines are prompting more cautious spending by Canadians.

In light of recent global economic and financial developments, the CRA must maintain its focus on all sectors of the economy to ensure that high levels of compliance are maintained.

Compliance Challenges

Many factors contribute to compliance challenges, including the increasingly volatile international economy, the push for business integration across borders, the complexities of electronic commerce, and demographic factors. This puts pressure on the CRA’s ability to maintain high levels of compliance.

The growing level of tax debt being managed by the CRA continues to be one of its areas of risk. Recent data from Equifax showed that the average national delinquency rate of Canadians increased by 5.5% between March 2007 and March 2008.

Demographic Trends

The recent census showed, that between 2001 and 2006, Canada had the fastest-growing population among G8 countries despite a fertility rate below the replacement level. This census also shows that immigrants represent almost 20% of our population.

Recent immigrants face challenges necessitating ongoing outreach work by the CRA to ensure that new Canadians are aware of the credits and benefits to which they may be entitled. Increased immigration from countries whose tax administrations are not based on self-assessment means the CRA will need to provide more education and assistance to promote compliance with Canada’s tax laws.

The CRA will also have to adjust to meet the needs of an aging population. A decline in the size of the Canadian workforce is expected to begin in the next 10 years due to the inability to replace retiring workers through natural growth.

Technological Change

Revenue administrations of member countries of the OECD increasingly depend on information technology (IT) solutions for services to the public, risk analysis, and compliance. The CRA relies heavily on IT to deliver its programs and services, and Canadians are demanding expanded electronic service options. Thus, we must ensure that our systems and infrastructure are robust and secure, to meet current and anticipated workloads.

Meeting Our Mandate

The Canada Revenue Agency (CRA) has the mandate to administer tax, benefit, and other programs on behalf of the Government of Canada and provincial, territorial, and certain First Nations governments.

Since becoming an agency in 1999, the CRA has established itself as a high-performance, national organization with an unparalleled capacity for program delivery. As we move into our second decade as an agency, our vision will guide us and we will pursue our priorities and make investments to support the achievement of our strategic outcomes.

Model for Trusted Administration

We administer laws enacted by Parliament and legislatures across Canada. We strive to influence Canadians to meet their obligations, but high levels of compliance are also dependent on factors that are beyond our control. Thus, achieving total compliance is not a realistic expectation, and increasingly sophisticated tax avoidance schemes and fraudulent practices can stretch our capacity to preserve Canada’s fiscal integrity.

Both on our own and working with other federal government departments, provinces, and territories, we promote responsible citizenship. We take steps to raise Canadians’ awareness of their obligations and entitlements, as well as the consequences of non-compliance, and enhance their knowledge of Canada’s tax and benefits system. Constant vigilance is key to ensuring that our system of administration functions properly and that fraud, non-compliance, and tax evasion are kept to a minimum.

We are constantly adapting and updating our tactics to meet the challenges of increasing business integration across borders and the changing structure of the international economy. There is a need, however, for authoritative leadership in multinational bodies and to build relationships and capabilities to protect Canada’s interests and values. We will maintain our strong international presence to advance protocols and practices to guide the work of tax administrations around the world.

Unparalleled Services and Value to Clients

The CRA is an innovative leader in providing tax and benefits services, creating new opportunities for partnerships with interested client governments and other federal government departments to reduce duplication and enable single-window delivery. This demands not only excellence of current-day operations, but also system adaptability and sustainability over the longer term.

The cost of paying tax includes the money spent to prepare, compute, and remit taxes. The Minister’s action plan on burden reduction commits the CRA to annually review and report on ways to promote burden reduction. This must be done in a way that is consistent with our overall accountability for tax compliance and revenue collection.

Outstanding Career Opportunities

As part of a commitment to integrate human resource and business planning, we implemented our Agency Workforce Plan during 2008. The plan sets forward an agenda to address workforce challenges and build on our strengths, with the goal of attracting and keeping top-quality talent and creating a workplace culture of intelligent risk management and innovation.

Achieving Our Strategic Outcomes

The CRA is responsible for administering, assessing, and collecting billions of dollars in taxes annually. We contribute directly to the quality of life of Canadians by delivering tax services and benefit programs on behalf of the Government of Canada, provincial and territorial governments, and certain First Nations governments. Thus, we support the economic and social well-being of Canadians including families and children, low- and moderate-income households, and persons with disabilities.

The CRA’s mandate sets out two strategic outcomes that summarize its contribution to Canadian society. The achievement of these outcomes demonstrates that we are fulfilling our mandate from Parliament.

The Report on Plans and Priorities 2009-2010 sets in motion an enterprising, multi-year agenda designed to serve as a foundation to achieve our vision. Our strategic outcomes govern the priorities we pursue and the investments we make to support those priorities.

In response to the challenges and opportunities in our operating environment, our tax and benefit focus over the planning period will be on tax integrity, strengthening service, benefits validation, effective relationships, and business sustainability.

The following table summarizes the contribution and linkages of our priorities to the achievement of our strategic outcomes.

Contribution of Priorities to Strategic Outcomes

Measuring our Strategic Outcomes

Planning Summary Tables

The following table set out the total financial and human resources needed to deliver on our priorities, including a breakdown of program activities and their financial resources. The table below also shows their alignment with the Government of Canada outcomes.

Agency Resources

Alignment to Government of Canada Outcomes

Expenditure Profile

For the 2005-2006 to 2008-2009 periods, the total spending includes all Parliamentary appropriations and revenue sources: Main Estimates, Supplementary Estimates, Treasury Board Vote 5 – Government Contingencies, Vote 15 – Compensation Adjustments and Vote 23 – Paylist Requirements as well as carry forward adjustments. It also includes spending of revenues received through the conduct of CRA’s operations pursuant to Section 60 of the Canada Revenue Act, Children’s Special Allowance payments, payments to private collection agencies pursuant to Section 17.1 of the Financial Administration Act and Payments to the provinces under the Softwood Lumber Products Export Charge Act, 2006. For the 2009-2010 to 2011-2012 periods, the total spending includes the planned spending and revenues but excludes carry forward adjustments as these are unknown at this point.

Since 2005-2006, Canada Revenue Agency’s Vote 1 reference levels have increased primarily as a result of: collective agreements / contract awards; legislative, enhanced audit and enforcement measures, including policy and operational initiatives arising from various Federal Budgets and Economic Statements; the transfer from the Department of Public Works and Government Services Canada for accommodations and real property services; and the assumption of the responsibilities related to the Corporate Tax Administration for Ontario, the Softwood Lumber Agreement and Inter-Provincial Compliance.

The increases to Vote 1 have been offset by a number of reduction exercises including: the Expenditure Review and Procurement Reductions, the 2006 Expenditure Restraint Program, the 2007 Federal Budget Cost Efficiency Savings, the 2008 Federal Budget Strategic Review reductions, the Procurement Reform and Cost Efficiency Savings.

The Agency Statutory Authorities have fluctuated over the course of the 2005-2006 to 2011-2012 period as a result of: adjustments to the Children’s Special Allowance payments for eligible children in the care of specialized institutions; adjustments to the rates for the Contributions to employee benefit plans; increases to the Spending of revenues received through the conduct of operations pursuant to Section 60 of the Canada Revenue Act; the introduction from 2007-2008 to 2009-2010 of Payments to private collection agencies pursuant to Section 17.1 of the Financial Administration Act; and the Payments to the provinces under the Softwood Lumber Products Export Charge Act, 2006.

Voted and Statutory Items

The 2009-2010 Main Estimates for the Canada Revenue Agency (CRA) increased by $650.6M from 2008-2009; the changes are mainly comprised of:

A net increase of $181.3M in Vote 1 made up of:

• an increase of $63.9M related to collective agreements;
• an increase of $67.4M related to assumption of responsibility for the Corporate Tax Administration for Ontario;
• an increase of $47.0M related to the 2007 and 2008 Federal Budgets to address legislative and policy initiatives as well as operational measures;
• an increase of $29.4M related to the transfer from PWGSC for accommodation and real property services;
• a decrease of $26.4M related to 2008 Federal Budget strategic review reductions, the procurement reform cost efficiency savings in the 2007 Federal Budget and other minor adjustments.

An increase of $43.5M in Respendable Revenue related mainly to Information Technology services provided by the Canada Revenue Agency to the Canada Border Services Agency (CBSA) and for activities related to the Corporate Tax Administration for the Province of Ontario.

An increase of $12.8M in contributions to EBP related mainly to collective agreement increases and the Corporate Tax Administration for Ontario.

An increase of $2.0M to Children’s Special Allowance related to allowances for eligible children in care of specialized institutions.

A decrease of $18.0M related to the payments to private collection agencies pursuant to Section 17.1 of the Financial Administration Act.

An increase of $429.0M related to the payments to provinces under the Softwood Lumber Products Export Charge Act, 2006.

Recognizing the increasing amount of capital assets that the CRA is procuring and building, primarily IT hardware and software assets, the CRA has indicated to the Treasury Board of Canada its intention to introduce a capital vote in 2010-2011, and is actively working towards this goal.

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