Canada Revenue Agency Annual Report to Parliament 2007-2008
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Canada Revenue Agency Annual Report to Parliament 2007-2008 RC4425 E REV08 About the CRA Who we are The Canada Revenue Agency (CRA) administers the Income Tax Act and other taxes and is the principal revenue collector in the country. We also distribute benefit payments to millions of Canadians. We strive 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 contested decisions. Our foundation of trust Building our foundation of trust is critical to achieving our mandate. Canadians respect our integrity and professionalism. Our respect and co-operation are the basis for our dealings with all Canadians and will guide us forward. Trust begins with CRA’s values that reflect our principles and beliefs and guide our behaviour and practices. These values are integrity, professionalism, respect, and co-operation. Our role in Canada’s tax and benefit systems A well-functioning tax and benefit system is essential to a healthy economy, a sustainable infrastructure, and a strong democracy. Some of the tax revenue we collect is redistributed to taxpayers by us in the form of benefit payments or tax credits. Other tax revenue is provided to our federal, provincial, territorial, and First Nations government clients to finance their programs and services for Canadians. 2007-2008 CRA in Perspective Our Mission To administer tax, benefits, and related programs, and to ensure compliance on behalf of governments across Canada, thereby contributing to the ongoing economic and social well-being of Canadians. Our 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. Our 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. 2007-2008 Highlights • We achieved filing compliance rates of 92.5% for individuals, and 95.5% for employers. • We achieved a remittance compliance rate of 93.2% for individuals, who make up the majority of Canada’s revenue base. • We now administer 77 benefit programs and services for provinces, territories, and other government clients, including the Ontario Child Benefit. • Benefit recipients received 99.99% of their payments on time. Areas for improvement • We face a challenge in increasing both filing and remittance compliance among corporations. • Levels of reporting non-compliance by individual filers who report key tax credits and deductions not subject to third party reporting remain high. • Overall results against our service standards exhibit a slight downward trend. The CRA identifies areas where improvements are required, and addresses them through various strategies and initiatives. In pursuing improved results, we balance our work to deliver changes with the requirement to maintain the integrity of our current program delivery systems. 5 Year Snapshot 2003-2004 to 2007-2008 Message from the Minister The Canada Revenue Agency (CRA) touches the lives of every Canadian, not only by collecting taxes, but by administering benefit programs on behalf of federal, provincial, and territorial governments. We are the single largest funding source for government programs and services. Our performance as an organization is key to maintaining the high levels of confidence in the government, its programs and services, and ensures that individuals and businesses are able to meet their obligations. As a demonstration of our commitment to service and accountability, in 2007-2008, the CRA introduced the Taxpayer Bill of Rights, a service complaints process, and Canada’s first Taxpayers’ Ombudsman to respond to service concerns from the public. These steps will help maintain the high level of confidence that Canadians have in the CRA. We made progress in actioning commitments to reduce the compliance burden for small and medium sized business, as identified in the Report of the Canada Revenue Agency’s Task Force on Small Business Issues, published in April 2007. The CRA is committed to implementing all of the initiatives identified in this report and sustaining the focus on burden reduction in the years to come. As Minister of National Revenue, I am proud of what we have accomplished over the past year to improve the social and economic well-being of Canadians, and I am confident that we will continue with our high level of service, accountability, and compliance in order to protect Canada’s revenue base. It is my privilege and honour to table the Canada Revenue Agency’s Annual Report to Parliament 2007-2008. The Honourable Jean-Pierre Blackburn, P.C., M.P. Minister of National Revenue CRA ANNUAL REPORT TO PARLIAMENT 2007-2008 5 6 CRA ANNUAL REPORT TO PARLIAMENT 2007-2008 Foreword by the Chair As part of the CRA’s unique governance structure, the Board of Management is responsible for overseeing the administration and organization of the CRA and the management of its resources, services, property, personnel, and contracts. The Board brings a forward-looking, strategic perspective to the CRA’s operations and fosters sound management with private sector expertise and rigour. In 2007-2008, the Board approved the Board of Management Oversight Framework, a key component of the CRA’s governance regime and one that complements the Treasury Board of Canada Secretariat’s Management Accountability Framework. The Board uses this new oversight framework to ensure that it meets its responsibilities under the Canada Revenue Agency Act. Using this framework, the Board undertakes a comprehensive annual review of CRA management processes and practices. During my term as Chair of the Board of Management, I have seen the evolution of the CRA’s business practices, emphasizing its commitment to service excellence to its clients and rewarding opportunities to its employees. As the CRA nears its first decade of existence, I am confident of the Board’s continuing value and contribution to the future success of the organization. In the past fiscal year, the Board of Management said farewell to one of its founding board members, Mrs. Bernice Buckle. We wish to thank Mrs. Buckle for her contribution to the Board since its inception in 1999. We also welcomed Mr. Robert Healey, FCA, to the Board of Management. Mr. Healey was a nominee of the province of Newfoundland & Labrador. In February of this year, along with Commissioner Baker, I was proud to represent the CRA at the Conference Board of Canada/Spencer Stuart 2008 National Awards in Governance. At this awards ceremony, the CRA received an honourable mention in the public service category for its unique governance structure and practices. On behalf of the CRA Board of Management, I am pleased to recommend this report to the Minister of National Revenue, the Honourable Jean-Pierre Blackburn, for tabling in Parliament. Connie I. Roveto, ICD.D Chair, Board of Management CRA ANNUAL REPORT TO PARLIAMENT 2007-2008 7 8 CRA ANNUAL REPORT TO PARLIAMENT 2007-2008 Table of Contents Canada Revenue Agency Annual Report to Parliament 2007-2008 Executive Summary ............................................................................................................................................................... 11 Our 2007-2008 Results ....................................................................................................................................................... 13 Achieving Our Tax Services Strategic Outcome.......................................................................................... 16 Achieving Our Benefit Programs Strategic Outcome............................................................................. 30 Our Program Activities ..................................................................................................................................................... 34 Taxpayer and Business Assistance (PA1)................................................................................................. 35 Assessment of Returns and Payment Processing (PA2) ............................................................... 41 Accounts Receivable and Returns Compliance (PA3).................................................................... 48 Reporting Compliance (PA4) .............................................................................................................................. 54 Appeals (PA5).................................................................................................................................................................. 61 Benefit Programs (PA6)........................................................................................................................................... 65 The CRA Board of Management .............................................................................................................................. 71 Management Results ........................................................................................................................................................... 75 Service Standards in the CRA – Overall Results ...................................................................................... 81 Conclusion by the Commissioner.......................................................................................................................... 87 Schedules.........................................................................................................................................................................................