Operating context and key risks

Operating context

The CRA carries out its mandate by administering a complex set of acts, regulations, incentives, credits, surtaxes, and international treaties enacted by Parliament and provincial and territorial legislatures. Working in collaboration with the Department of Finance Canada, our legislative authorities support effective and efficient tax administration and promotes compliance through sanctions and penalties for not complying. Meanwhile, our provincial and territorial partners rely on us to deliver their tax and benefit programs. Canada's courts address tax and other disputes that cannot be successfully resolved through the CRA's administrative redress process.

The Agency counts on a wide range of intermediaries at all levels of the public and private sectors inside and outside Canada to help us serve our clients; for example, in Quebec, Revenu Québec administers the GST on our behalf. Partners outside of government, such as financial institutions, help us by providing convenient, accessible services to individuals and businesses so they can receive and deposit their refunds and pay their taxes on time. We also collaborate with multilateral agencies, such as the Organisation for Economic Co-operation and Development, the International Monetary Fund, and the World Bank—and a network of foreign governments—to develop common approaches to emerging and ongoing compliance challenges.

The Agency counts on Canadians to demonstrate a high level of voluntary compliance. The CRA works to build and maintain taxpayers' trust by being as open and transparent as possible about how it administers taxes and benefits. We also build trust by continually improving client service, by simplifying and streamlining the filing and payment process, and by communicating news about taxes and benefits to clients. We also collaborate with the Treasury Board of Canada Secretariat and other federal partners to provide ongoing support of the Government of Canada's commitment to openness and transparency, notably by making a wide range of aggregate tax data available to the public.

The Agency can best achieve its mandate by providing high-quality services to inform taxpayers of their obligations and help benefit recipients receive their entitlements. Canadians expect to interact digitally and securely with the CRA; advances in information technology drive and facilitate many of the service improvements we make to promote voluntary compliance. Through ongoing service improvements like these, we continue to increase our capacity to offer taxpayers certainty in meeting their tax obligations. We are also better able to take steps to make sure taxpayers, especially Indigenous peoples, seniors, lower-income earners, newcomers to Canada, and people with disabilities, receive all they are entitled to.

Innovation

The CRA has made it a priority to seek out opportunities to try new ideas, adapt to new technology, and continuously improve its service to Canadians, and this report highlights a number of areas in which the Agency has taken significant steps to transform our core business to better meet our mandate. Engagement has been key to developing and maintaining a culture of innovation at the CRA.

In this report, advances and areas of innovation are marked with a light bulb graphic, representing the bright ideas that are serving to keep the Agency at the forefront of meeting Canadians' service expectations and protecting Canada's revenue base.

Key indicators

The following indicators will be used to assess the CRA's performance in providing Canadians with access to timely, modern, and innovative services, while promoting and supporting compliance. These indicators are a subset of the CRA's overall performance measurement framework as described in pages 20 to 69 of the report.

Key risks

The CRA proactively monitors and addresses internal and external events that could affect whether it achieves its priorities and objectives. The CRA maintains a well-established risk process that regularly scans, identifies, and assesses key risks it must be aware of in a changing environment. The emerging trends and events that are identified can potentially affect the Agency's operations when delivering its programs and services.

Externally, several emerging global trends have affected the CRA's role in detecting non-compliance and delivering taxpayer services. Emerging digital currencies, online payment systems, and an increasing number of online platforms for businesses and services have enabled a growing trend of digitized and sharing-based economies. Also, the ever-increasing frequency and complexity of cyber attacks has prompted the CRA to make sure it has the intelligence and capacity required to detect and defend against them. In 2016-2017, the CRA received budget investments to improve client-focused services and introduce measures to prevent tax evasion and aggressive tax avoidance. The Agency has also realigned its objectives and priorities to effectively operate and address the potential impacts of these trends as they continue to evolve in the future.

Internally, several factors have influenced the CRA and the way it operates to deliver on its priorities. The CRA houses an ever expanding inventory of data assets, and managing information for tax and benefit programs is a core function of the CRA's business. Continuing to enhance how it governs and manages its data assets is critical. This includes renewing its IT infrastructure, breaking down data silos, and getting the right tools. Also, demographic changes in the CRA's workforce are requiring proactive strategies to prevent a gap between retiring employees and the workforce of the future. These shifting demographics create a need to transfer knowledge, train leaders, and recruit and retain specialized skill sets. The CRA's current priorities focus on career development, simplifying tools and processes, and transitioning to online platforms. These have expanded the CRA's ability to address the potential impacts of future changes internally.

The key risks in these areas are prioritized by their potential impact on the CRA's commitment to service, compliance, integrity, security and innovation. By making sure its risks are properly identified and managed, the CRA continues to be well-positioned to deliver on its mandate and maintain the trust and confidence of taxpayers.