Thematic Briefings

The filing experience

By providing an easy filing experience, the CRA promotes compliance within Canada's tax system, which is primarily based on self-assessment.

Key facts and figures 2023-24

• $662.6B total administered revenues and pension contributions
• 32.9M individual income tax returns filed with 92% filed digitally
• 19.68M times electronic filers used the Auto-fill my return function
• 3M (approximately) corporation income tax returns filed with 94% filed digitally
• 343K trust returns were assessed with 49% filed digitally
• 286.5M Slips processed with 99.6% filed digitally

All figures are approximate

Recent and planned improvements

CRA content on Canada.ca

Webpages were updated with features that addressed user feedback, including targeted educational and outreach products for specific client segments, and improved search features.

Automatic Tax Filing

Since 2022, the CRA has been experimenting with simplified filing options (phone, digital and paper) modelled after SimpleFile by Phone (formerly File my return). SimpleFile by Phone is an automated telephone service that allows eligible individuals to auto-file an income tax and benefit return over the phone, for free. The service is by invitation only and is available to individuals with lower-income and simple tax situations. For the 2024 tax season, the CRA sent out more than 1.5 million invitation letters, which is an increase from approximately 700,000 in 2023. As announced in Budget 2024, the CRA will increase the number of eligible individuals to 2 million by 2025.

This past summer, the CRA expanded its SimpleFile options (phone, digital and paper) to all provinces and territories as part of an automatic tax filing pilot, where over 500,000 invitation letters were sent to lower-income and non-taxable individuals who had either never filed a tax return, or had a gap in their filing history. Again, the CRA offered simplified phone, digital, and paper options to file. These services are available until the end of the filing year, with results expected in March 2025.

Contact centre infrastructure

The systems were enhanced to increase the number of simultaneous agents that could be supported by the systems, partly in response to an increased volume of calls at the start of the pandemic.

Charlie the Chatbot

Launched in March 2020 as a pilot, Charlie the chatbot initially provided Canadians with information on COVID-19 related benefits and now continues to be updated with certain tax information, programs and benefits administered by the Agency. As of March 31, 2024, the chatbot has responded to over 12.5 million questions during 4.5 million conversations. We are currently developing the next iteration of the CRA’s chatbot, scheduled for deployment before the end of fiscal 2024-25.

Online chat

On March 1, 2022, the CRA deployed its first online chat service which provided Canadians a channel through which they could chat with agents to ask general questions on a limited number of non-account specific topics. As of March 31, 2024, our agents have responded to over 300,000 chats. We are currently enhancing the service to respond to a limited number of account-specific questions, set to launch in fall 2024.

Auto-fill my return

This service was updated to include an additional tax year and associated information to automatically populate parts of an income tax and benefit return in certified tax software for the 2024 tax season. Tax slips and information are available for 2016 and subsequent tax years.

Digital filing

The CRA introduced the EFILE service for trust income tax returns as of March 2022 for the 2021 and 2022 tax years. An additional tax year was added for T1 income tax returns so that individuals and their representatives can file for the current year and previous six tax years (instead of four). The CRA also made changes to enable Canadians with a mailing address outside Canada to file their tax return through a digital filer using EFILE. For the 2023 tax year, returns can be filed using Netfile with a non-Canadian address, and Non-Resident filing Section 116 and Emigrant returns can be filed using EFILE.

Context

The tax filing experience is a visible source of interaction with the Government of Canada for individuals, businesses and trusts. It typically includes provincial and territorial taxes, as the CRA administers these for all provinces and territories except Quebec, which has its own tax administration – Revenu Québec; and Alberta, which administers its own corporation tax. While the majority of the revenue the CRA collects is from income tax, the CRA does administer several other taxes - including value added taxes, fuel charges, and excise tax - each with their own filing and reporting requirements.

Canada's tax system is based on the principle of self-assessment. This means that individuals generally complete an income tax and benefit return each year to report their annual income, claim all deductions or credits that apply to their situation, and calculate whether they owe tax or are eligible to receive a refund. The CRA then validates this information and strives to issue taxpayers' notices of assessment within two weeks of receiving the digital individual tax returns and within eight weeks of receiving the paper individual tax returns. Although the majority of tax returns are assessed within service standards, there is a small percentage that fall outside of the standards, as additional processing time is required to complete the assessment.

The CRA processes tax and benefit filings from a wide variety of clients such as individual income tax and benefit returns, corporation income tax returns, value added tax (GST/HST) returns, and specialty business returns among many others. With individual personal tax and benefit returns (T1) and corporation income tax returns (T2) being the most significant, this briefing focuses on the T1 and T2 filing experience. Last fiscal year, over 92% of individual income tax returns and 94% of corporation income tax returns were filed digitally, a figure that remains constant. Providing a fast and easy filing experience, regardless of the filing method, is essential to support compliance within Canada's self-assessment system.

Considerations

Filing methods and platforms

The following table includes statistics for the 2023-2024 fiscal year. More than 32.9 million individual income tax and benefit returns and 2.9 million corporation income tax returns were filed. Almost 343,000 trust returns were assessed, with 49% filed digitally.

Filing methods and platforms

Filing method	Individual income tax returns (T1)	Corporation income tax returns (T2)	Trust returns (T3)	GST/HST returns	Other levies/partnership information returns
Digital	30.4 million	2.8 million	169,000	7.9 million	140,814
Paper	2.5 million	178,560	174,000	318,168	56,801

The CRA is focused on innovation in tax filing and refining business processes to deliver services to Canadians efficiently and effectively. The CRA works closely with software developers to make sure Canadians have access to high quality tax preparation software products, some of which are free for taxpayers. The CRA is also working to improve the filling experience through My Business Account and has recently enabled clients to view more of their tax information digitally through the platform.

Under Canada's self-assessment tax system, taxpayers or tax intermediaries must perform calculations to determine taxes owing, with some exceptions for eligible individuals for whom the CRA performs the calculations. When the CRA verifies a tax return, additional documentation may be required to ensure the correct information is on file. Taxpayers are able to send supporting documents digitally via a secure online portal to validate information provided on their tax returns or in their benefit claims.

Each year, the CRA processes over 2.8 million information returns containing over 286 million individual slips. These are transmitted electronically by various filers including financial institutions, employers, trust administrators, and other various businesses across the country.

Making tax filing easier

The CRA continually introduces new services and improvements to filing processes.

Recent improvements include:

• Allowing tax representatives to update client information, provide estate documents digitally, register online for trust accounts, and file certain trust return types digitally using EFILE
• Adding additional information to the Auto-fill my return service, and increasing the number of tax years that can be imported from five to six to automatically populate parts of an income tax and benefit return in certified tax software
• Partnering with financial institutions to allow clients to share their direct deposit information with the CRA, which allows real-time updates of their banking information and quicker access to their tax and benefit returns
• Enhancements to Change my return and ReFILE services making it easier for taxpayers to file adjustment requests

While continuing to promote digital services, other filing methods such as paper filing will continue to be supported so that no one is left behind. Vulnerable segments of the population who filed paper in the previous year now receive the following year's income tax package by mail, ensuring they have what they need to file.

Commitment to service transformation

Since 2018, the CRA has undertaken an ongoing service transformation, led by its Chief Service Officer (CSO), with the goal of putting people first so that clients experience their interactions with the CRA as trusted, fair and helpful. The CRA’s CSO leads the CRA’s service transformation agenda through an integrated, client-focused approach, with the goal of delivering better service outcomes for Canadians across its programs.

The CRA launched a national public consultation exercise in September 2024, engaging individuals, non-professional representatives, and tax professionals to learn about their service experiences with the CRA. These consultations will help the CRA further understand the challenges people are facing while interacting with our programs and services and play an important role in helping us design and improve our services. This research will dive deeper into the experiences of client segments that are underrepresented in tax filing and benefits uptake, including seniors, youth, housing insecure individuals, and newcomers to Canada. This exercise is set to end in December 2024, with a final report to be created shortly thereafter.

The CRA is supportive of and well positioned to align with the Government of Canada’s renewed vision of integrated, client-centered service delivery, with its focus on client‑centricity, digital enablement, data, trust, and effectiveness and efficiency. Concepts related to inclusiveness, accessibility, human-centered design, integrated digital-first solutions, privacy protection, cyber security, data-driven strategies, as well as seamless, effective, and efficient service delivery, have consistently been identified as priorities by the CRA in our plans and strategies going back several years. Through a bilateral agreement, the CRA and Service Canada work together closely to make services more seamless for Canadians through joint outreach, direct referrals and client-approved sharing of data. At the Government of Canada level, work has been underway over the past several months to strengthen Service Canada’s governance and leadership role in this space – the CRA has been actively engaged in these discussions and is continuing to seek opportunities to deepen its collaboration with Service Canada.

Support for vulnerable population segments

Vulnerable segments of the population can face barriers in filing their taxes and receiving the benefits and credits to which they are entitled. The CRA assists members of these groups through various programs and services including:

• SimpleFile by Phone, which allows individuals with low or fixed incomes to auto‑file their income tax and benefit returns by answering a series of short questions through an automated phone service.
• Through the Community Volunteer Income Tax Program (CVITP), community organizations host free tax clinics where volunteers complete tax returns for people with a modest income and a simple tax situation. The CRA offers support to those community organizations, such as help with their registration and of their affiliated volunteers, accreditation to the capability of filing tax returns digitally, tax software training (also via tools and products created for volunteers).
• The Northern Service Centres (NSC) provide a year-round presence in the territories, providing filing assistance to individuals in the Yukon, Northwest Territories, and Nunavut, ensuring that northern and Indigenous communities in the North can fully participate in the tax and benefits system. Continued support through the NSCs is necessary to address the unique needs of northern residents. 
• “Let us help you get your benefits!” (LUHYGYB) credit and benefit short paper tax return is a simplified tax solution for Indigenous peoples with low to modest and tax-exempt incomes. The form is designed to reduce barriers to tax filing faced by Indigenous peoples, including lack of technology in remote areas. To increase accessibility of the form among Indigenous peoples the LUHYGYB short return form has been shared with Service Canada and Indigenous Services Canada.
• Outreach factsheets that have been translated into 17 Indigenous languages and 9 third languages that provide information on tax filing, benefits and credits.
• Through upcoming engagements with external stakeholder organizations, the CRA will explore opportunities to collaborate on improving services to Indigenous communities and organizations that support Indigenous peoples.
• Focusing on increasing the number of Super Clinics which are multi-stakeholder events that include CVITP organizations, the CRA, at least one other stakeholder organizations including federal, provincial/territorial, municipal governments, and/or Indigenous community partners. 

Next Steps

The CRA continues to evaluate the effectiveness of current service offerings to determine the changes required for the next filing season. 

Benefit and credit administration

The Canada Revenue Agency (CRA) administers benefits and credits, many of which are income‑tested, on behalf of the federal government and provinces and territories, to contribute to the economic and social well-being of Canadians.

Key facts and figures 2023-24

• $52.7B issued in benefits by the CRA
• 205 federal, provincial, and territorial benefit and credit programs and services were administered by the CRA
• 869.6K income tax and benefit returns were filed for vulnerable individuals through the Community Volunteer Income Tax Program (CVITP) tax clinics
• 200K letters were issued by the CRA to Canadians who had not submitted their 2019 return to inform them of the benefits and credits to which they are entitled.

All figures are approximate

Recent and planned improvements

Simplified forms for Indigenous peoples

The CRA launched a simplified tax return and Canada child benefit (CCB) form for First Nations individuals with modest and/or tax-exempt incomes, which is now available to all Indigenous peoples. In addition, the CRA is promoting use of the Let us help you get your benefits (LUHYGYB) form in Indigenous and northern communities, by making the forms and applications available to Service Canada officers as well as Indigenous Services Canada, local friendship centres, community representatives, band council offices, Northern Service Centres, and other service organizations.

Disability tax credit (DTC)

The CRA has made it faster and easier than ever for persons with disabilities and their medical practitioners to complete the DTC application form, by introducing a new fully digital application process.

CRA Progress Tracker

The Progress Tracker service was launched in the My Account portal in February 2022. This service enables users to track the progress of requests related to the DTC, Taxpayer Relief, and Objections. The CRA has since expanded the service within My Account to track the progress of CCB applications, T1 Returns and T1 Reassessments. In addition, the Progress Tracker service is also available within the My Business Account portal and tracks the status of various business-related requests including T2 Returns/Reassessments and Goods and Services Tax / Harmonized Sales Tax (GST/HST) Returns/Reassessments.

DTC Navigators

The CRA implemented DTC Navigators in each of the tax centres in April 2022. This role was established to assist persons with disabilities and their authorized representatives on complex DTC issues. The Navigators act as a liaison between the Agency and the taxpayer.

Canada Carbon Rebate

The Canada Carbon Rebate (formerly known as the Climate action incentive payment) is a tax-free amount to help eligible individuals and families offset the cost of the federal pollution pricing in applicable provinces. The Canada Carbon Rebate is issued quarterly in April, July, October and January. The name was updated to the Canada Carbon Rebate to clarify its function, and make its meaning and relationship to the carbon pricing system more intuitive for Canadians.

Advanced Canada workers benefit (ACWB)

Starting July 2023 and based on the 2022 taxation year, the ACWB replaced the applications for advance payments of the Canada workers benefit (CWB). The ACWB provides advance payments equivalent to 50% of the CWB across three quarterly payments. The first payment was issued on July 28, 2023.

Context

The CRA administers taxes, benefits and credits. Benefits are amounts paid to those who are entitled to them. They are targeted to modest income individuals through income-testing. The CRA administers several federal benefits, such as the CCB, the GST/HST credit, the Canada Carbon Rebate, the ACWB and Children's special allowances.

The CRA administers many refundable and non-refundable tax credits. Refundable tax credits, such as the CWB, reduce the amount of federal tax an individual must pay, where the total of these credits is more than the federal tax owed, and may result in refund, even when no taxes are owed. Non-refundable tax credits, such as the DTC, reduce or eliminate the amount of federal tax an individual must pay. However, if the total of the credits is more than the federal tax owed, there will not be a refund for the difference.

In addition to federal benefits and credits, the CRA administers provincial and territorial benefits and credits. The CRA also plays a key role in supporting provinces, territories and other government departments in administering programs under their control through information exchange programs, primarily for income verification, including the Guaranteed Income Supplement, Old Age Security, and the Canadian Dental Care Plan.

The CRA works to ensure that Canadians obtain the support and information they need to know what benefits and credits they may be eligible to receive, receive their benefit payments in a timely manner, and have avenues of redress when they disagree with a decision on their benefit eligibility.

As part of the Government's COVID-19 Economic Response Plan, the CRA was called on to support Canadians through the delivery of a number of critical emergency benefit programs, which are taxable benefit payments. These benefits helped Canadian individuals and businesses cope with the economic impacts of the pandemic. The CRA demonstrated its capacity and agility by rapidly launching significant, new benefits in a matter of weeks and subsequently adapting these new benefits while introducing new ones.

Considerations

Many benefit and credit recipients are vulnerable individuals (for example, persons with disabilities, adults 65 and older, Indigenous peoples, newcomers to Canada, students and youth, housing-insecure individuals, and modest-income individuals). Accordingly, any payment and eligibility issue, real or perceived, has the potential to attract significant attention and public commentary from social advocacy groups, the media, parliamentarians, and Canadians in general. The CRA's primary goal is to ensure people receive the benefits and credits to which they are entitled. As part of its mandate, the CRA has also put in place safeguards and up-front verification and security measures to ensure only those who are entitled to benefits and credits receive them. Consequently, benefits administration is an area that tends to draw both political and media interest, and the CRA seeks to demonstrate it is responsive, improving, and effective.

Outreach activities

The Benefits Outreach Program ensures that Canada's vulnerable population segments (Indigenous peoples, newcomers to Canada, adults 65 years and older, students and youth, persons with disabilities, housing insecure individuals, and modest-income individuals) are aware of the benefits and credits to which they are entitled. This is achieved primarily through in-person benefits outreach activities, where CRA outreach officers deliver information sessions to raise awareness of the importance of filing taxes to access benefits and credits, answer questions, and promote the free tax filing support offered through the CVITP. 

The Benefits Outreach Program utilizes information materials in multiple formats and languages to maximize content accessibility to vulnerable Canadians. Benefits Outreach information materials include factsheets, posters, webinars, videos, promotional cards, marketing products, and presentations, many of which can be made available to session participants. Some of these materials are offered in various third languages including Arabic, Dari, Pashto, Ukrainian, Russian, Spanish, Punjabi, Tagalog, and Simplified Chinese. Factsheets are also available in the following Indigenous languages: Swampy Cree, Plains Cree, Ojibway, North Slavey, South Slavey, Mohawk, Michif‑Cree, Michif French, Mi’kmaq, Innu-Aimun, Tlicho, Dene, Inuinnaqtun, Oji-Cree, Stoney and Inuktitut (Nunavik) and Inuktitut (Nunavut).  

The Benefits Outreach Program collaborates with other government departments and third-party organizations to help them learn about the benefits and credits available to their clients by doing their taxes as well as leveraging their communication networks and resources to extend the reach of program messaging. 

The CRA works to support Indigenous peoples through Northern Service Centres where outreach officers provide year round support to individuals located in all three territories. The CRA has developed various toolkits that help outreach officers effectively raise awareness of benefits and credits in Indigenous communities in a safe and culturally sensitive manner.

The CRA has also tailored services and information for Indigenous peoples with the creation of an Indigenous web page that specifically provides tax and benefit information for Indigenous peoples. The CRA has also worked with Aboriginal Financial Officers Association Canada, an organization that helps Indigenous peoples better manage and govern their communities and organizations, to create a podcast on tax and benefits.

The CRA is using business intelligence to develop tools to identify underserved populations in Northern and Indigenous communities and is committed to building trust and relationships with Northern and Indigenous communities through increased engagements and delivery of service. Outreach information sessions in Northern and Indigenous communities include information that is pertinent for community members, such as the northern residents deductions and tax-exempt income.

Next steps

The CRA will continue to:

• Proactively reach out to clients who are eligible for but not receiving benefits and credits
• Work with vulnerable segments of the population, including Indigenous peoples, to better understand their needs through public opinion and ethnographic research and client experience testing, and help them receive the benefits and credits to which they are entitled
• Build trust and relationships with Northern and Indigenous communities through increased engagements, delivery of service, and a co-design with a focus on increasing the presence of the CVITP
• Review and validate the applications of benefit recipients whose eligibility is in question using a risk-based approach
• Work with stakeholders to continue to develop and implement free, automatic tax‑filing services for simple returns to ensure Canadians receive the benefits they need
• Work with provincial, territorial and federal partners to develop and administer new programs and provide ongoing data support for the effective delivery and administration of their programs

The compliance continuum: Helping Canadians meet their tax obligations

The Canada Revenue Agency (CRA) approaches its work with the underlying premise that most people – given the opportunity and the right services – will meet their tax obligations. As such, the CRA focuses on helping clients comply by using an education-first approach. As a responsible administrator, the CRA also strives to identify and actively enforce compliance in cases where taxpayers, through neglect, avoidance, evasion, or fraud, do not meet their tax obligations.

Key facts and figures 2023-24

• 94% of Canadians participated in the tax system.
• 68.9K audits completed by the CRA, including audits preventing refunds from being erroneously issued. These audits resulted in $15.3B in fiscal impact.^{Footnote 1} 
• 13 convictions with court imposed fines totaling $2.9M, as a result of criminal investigations. These taxpayers were sentenced for willfully evading payment amounts totaling $13.5M in federal tax.
• 7 individuals were sent to jail for a total of 16 years.

All figures are approximate

Recent and planned improvements

Sharpening focus on emerging tax risks

The CRA is making better use of available information to select the appropriate level of compliance or collection intervention for clients by improving data analytics and business intelligence.

Sharing information for better compliance

The CRA is increasing engagement and information sharing with domestic and international partners and, when appropriate, with law enforcement agencies to better target its compliance activities.

Helping Canadians when they need it most

With the increasing frequency and severity of weather-related disasters, the CRA has developed a streamlined disaster relief approach to improve the consistency and timeliness of support for affected taxpayers. In alignment with international best practices, the CRA has developed a Playbook to coordinate the Agency’s response to disasters and apply proactive, pre-defined relieving measures to support Canadians when they need it most.

Improving service experience of taxpayers owing money

The CRA continues to develop additional training, tools and resources to assist collections program employees on using an empathetic approach when assisting clients and negotiating payment arrangements.

Context

The CRA organizes its activities and programs along the compliance continuum. This runs from facilitating and promoting compliance continuously, through education and outreach, to enforcing compliance through a series of steps that include verification and audit, collection, and criminal investigations. This continuum is designed to secure revenues on behalf of the government cost-effectively, while minimizing disruption to taxpayers.

The vast majority of Canadians comply with their tax obligations. The ease of compliance, the CRA's reputation for trustworthiness, and impressions of the fairness of the tax system can all impact compliance. As such, the CRA is always striving to make compliance easier and to build confidence in the fairness of the tax system. However, the CRA deals with a range of clients: those who want to comply but need help to understand their obligations; those who require a nudge due to a misunderstanding of the rules or a lack of appropriate information; and those who willfully choose not to comply.

The CRA recognizes that despite a willingness to comply, many Canadians and businesses can experience challenges with the complexity of the tax system. The CRA seeks to introduce new tools and simplify processes to reduce the compliance burden. The CRA works collaboratively with the Department of Finance to create legislation that allows it to keep up with the changing landscape of non-compliance and to also have the necessary tools to enforce compliance. It also pursues outreach and education strategies to address gaps in clients' awareness of their tax obligations.

To protect the integrity of Canada's tax and benefit system, the CRA takes action to resolve non-compliant behaviour using a variety of measures that are adapted to the circumstances and the level of risk identified. This enables the CRA to treat each case based on the seriousness of the non-compliant behaviour. Tackling willful non‑compliance is a costly endeavour. However, the CRA has demonstrated that it can leverage spending in this area to generate significant tax revenues.

Considerations

Progressive interventions

The CRA manages non-compliance using a range of progressive interventions, addressing non-compliance as early as possible through the least disruptive means.

In line with its People First philosophy that emphasizes the need to deliver convenient and user-centric services, the CRA has undertaken extensive education and outreach activities that have guided a variety of service improvements to support everyone’s ability to comply with their tax obligations. The CRA provides education services and tools, including the sharing of easy to understand information in guides and publications, as well as proactive outreach to ensure Canadians have the information they need to comply.

While Canada's tax system is based on self-assessment, the CRA reviews returns to ensure taxpayers are entitled to the claims they make and that the amounts reported are correct. These reviews are an important part of maintaining the integrity of and Canadians’ confidence in the tax system. They also promote taxpayer education by identifying common areas of misunderstanding.

The CRA takes action to resolve non-compliant behaviour using sophisticated risk assessment tools and practices to guide its reviews, audits and debt collection. The CRA seeks to reserve its audit activities for taxpayers who try to avoid meeting their tax obligations, while exploring other interventions to deal with lower risk non-compliance issues. The application of penalties are considered for repeat offenders. The CRA selects cases of tax fraud, tax evasion and other serious violations of the tax laws for criminal investigation based on priority and impact on compliance. Where appropriate, cases are referred to the Public Prosecution Service of Canada for possible criminal prosecution.

Collections

Most Canadians will pay their tax debt in a timely fashion upon filing. In more difficult circumstances, the CRA works with the taxpayer to find a workable solution such as a payment arrangement. In cases where the taxpayer deliberately chooses not to pay, the CRA applies a range of progressive interventions to collect those tax debts. Despite the CRA's efficiency in resolving debt, the tax debt continues to grow.

Tools

To support compliance efforts, the CRA uses various information and data sources and analytical approaches to maximize the ability to detect and deter the most serious instances of non-compliance, and takes responsible compliance actions where necessary. It strives to ensure that non-compliance is detected and addressed as early as possible, using sophisticated risk assessment tools and practices to guide reviews, audits and debt collection. The CRA is investing in significant information technology projects and enhancements to support its ongoing compliance efforts.

The CRA engages its domestic and international partners to better understand and address areas of common concern and to achieve effective and fair tax administration across jurisdictions. For example, Canada is the lead on the Organisation for Economic Co-operation and Development's Large Business and International Programme. The CRA also participates in various international forums and partners with other tax administrations to combat international tax evasion. For example, the CRA is an active member of the Joint Chiefs of Global Tax Enforcement (J5), who are committed to combatting transnational tax crime through increased enforcement collaboration.

Recourse and relief

Canadians have the right to disagree with CRA decisions regarding their tax or benefit situation. Canadians can use the objection or appeal process to request an impartial review. If Canadians disagree with the outcome, they can formally appeal through the court system. In recent years, the number of appeals to the Tax Court of Canada has decreased, however, on the whole the complexity of the subject matter under dispute has increased.

The CRA administers legislation, commonly called the taxpayer relief provisions, that give the CRA discretion to cancel or waive penalties and interest when taxpayers cannot meet their tax obligations due to circumstances beyond their control. These circumstances can include financial hardship, actions of the CRA such as delays, extraordinary circumstances such as illness, and other circumstances outside the taxpayer’s control.

Media, Parliament and public perception

Media coverage tends to focus on concerns that the CRA is not doing enough to respond to aggressive tax planning by wealthy individuals and large businesses. There is often a perception that the CRA is cracking down on the average Canadian more than wealthy Canadians and businesses. There is also a common misperception that the CRA is not doing enough to implement legislative changes to address gaps in compliance, despite tax policy being a Department of Finance responsibility. Media coverage also gives rise to attention to issues raised in Parliament. What the CRA can say publicly in response about specific taxpayers is limited due to legislated confidentiality provisions.

Measuring the Tax Gap

In June 2022, the CRA published Canada’s first overall tax gap report. It found that, from 2014 to 2018, the tax gap had remained stable at approximately 9% of federal tax revenue. Canada is one of the leading countries that estimate and publish tax gap estimates and was recently asked by the Organization for Economic Co-operation and Development’s Forum on Tax Administration (FTA) to take on the role of Chair of the FTA’s first Community of Interest on Tax Gap. The CRA plans to publish the next overall tax gap report in 2025, which will cover up to tax year 2022, and will publish one every three years. This approach is aligned with the proposal in Bill S-258, tabled by Senator Percy Downe in March 2023 (First Reading). The Bill is currently placed on the order of precedence in the House of Commons.

Next steps

The CRA's approach to compliance, like that of all advanced tax administrations, is dynamic. The fundamentals remain consistent, but the expectation for agility is always present. Changing taxpayer expectations and emerging issues will continue to require an increase in the responsiveness, empathy, and tailoring of the CRA's approach in order to balance the statutory requirement to administer Canada's tax laws fairly. The CRA will continue to strengthen the continuum while taking the necessary steps to transform for the future.

Information and data privacy and security

Canadians place their trust in the Canada Revenue Agency (CRA) to protect their information and data from unauthorized access, use, or disclosure and to ensure that its services are delivered securely and without interruption. That trust is crucial to promoting Canadians’ compliance with their tax obligations.

The CRA is committed to protecting all information and data, including personal information from internal and external misuse. This is enabled through rigorous protection controls and policies as guided by legislation, including the Privacy Act and the Income Tax Act. These controls help to prevent, detect, and respond to internal and external threats. The CRA is vigilant in monitoring the environment to ensure controls remain effective and that they are available to respond to new and emerging threats. The CRA also safeguards its facilities and infrastructure to ensure that its people, information, and assets are adequately protected, thereby supporting the delivery of CRA programs.

Key facts and figures 2023-24

• The CRA is responsible for one of the largest repositories of personal and financial information in the country.
• The CRA promotes security and privacy awareness among employees through various awareness products, which help them understand their responsibilities and enable them to do their job efficiently and in a secure manner. The CRA also promotes scam and fraud awareness externally. This ensures Canadians are aware of the risks, know how to protect their accounts, and how to report incidents of scams, identity theft, and fraud.
• A multi-layered approach to security, including system and business controls and safeguards, protects against potential internal and external threats and privacy breaches.
• Threats in the external environment are increasing in number and complexity, driving the CRA to increase its measures to identify, analyze, and mitigate potential threats.
• The federal Budget 2021 committed over $300M for the Agency, which is  nearing its end. The Security Branch invested in new technology, tools, and specialized resources, but continues to look for further funding to sustain new essential programs in safeguarding taxpayer information.

All figures are approximate

Recent and planned improvements

Mandatory access to information and privacy training

As part of the CRA-wide privacy and access to information training and awareness strategy, mandatory Access to Information and Privacy training was implemented for all CRA employees during the 2023-24 fiscal year. This supports the Treasury Board of Canada Secretariat’s (TBS) policy requirement that all federal government employees receive training on their obligations related to the Access to Information Act and the Privacy Act.

Management Action Plan to respond to the Office of the Privacy Commissioner investigation into the summer 2020 cyber attacks

Following the February 2024 tabling of the Office of the Privacy Commissioner’s (OPC) special report on the summer 2020 cyber attacks, the CRA submitted a management action plan to the OPC, which includes actions the Agency has taken or will take to strengthen identity assurance practices, cyber security threat and risk management processes, vulnerability scanning and penetration testing, and privacy breach management processes. All recommendations to be completed within six months have been completed. All other recommendations are on track for completion. The CRA is working with partner departments, including Employment and Social Development Canada, Shared Services Canada, and TBS to respond to the OPC’s recommendations.

Reporting cases of unauthorized use of taxpayer information by third parties

With respect to unauthorized use of taxpayer information and data by third parties, a priority for the Agency is to address the current delays in identifying and reporting these breaches so that the OPC, TBS, and affected individuals are advised of them in a timely manner. To this end, the Agency is clarifying roles and responsibilities to improve detection, containment, mitigation, and reporting of such incidents. These types of breaches are very complex and involve multiple branches in the Agency.

Privacy Management Framework

The Privacy Management Framework was developed to demonstrate the CRA’s commitment to protecting personal information. To support this, a privacy management key performance measurement dashboard, which maps to the framework, was developed to monitor the state of privacy management in the Agency. Both are scheduled for a review this year to demonstrate this commitment.

Fraud detection

The adoption of new models and tools has expanded the proactive monitoring of user actions on CRA systems to better detect potentially fraudulent employee transactions and information and data misuse.

Data and artificial intelligence (AI) ethics

The CRA's AI Enablement Plan has six pillars, two of which (Ethics and Governance and Oversight) act as guardrails, ensuring AI is used responsibly and the trust of Canadians is maintained. The Ethics pillar embeds ethical considerations in every step of the design, deployment, and ongoing auditing of AI and automated decision-making solutions. The Governance and Oversight pillar provides a line of sight and facilitates horizontal information and data sharing, reporting, and risk assessment. Further, AI stewardship is a mandatory element of all AI projects at the CRA. It ensures factors such as privacy, biases, accountability, and legal considerations are taken into account

Agency Security Officer (ASO)

The security of each federal department or agency is overseen by a designated Chief Security Officer (CSO). The CSO is responsible for safeguarding the organization’s information, assets, and people. They take the lead in ensuring that senior management is aware of security risks and recommend initiatives to enhance the organization’s security culture and program. The position within the CRA was elevated to the Assistant Commissioner level to further centralize and formalize management of the security program.

Security Branch

Security functions were centralized under one management team to enable the CRA to manage security risks proactively and continuously. The security portfolio was expanded to include new resources to strengthen CRA’s posture against external fraud risks and threats to the security of taxpayer accounts. We also expanded to include Risk Governance as a new encompassing function, in line with the National Institute of Standards and Technology framework on governance.

Context

Maintaining public confidence in the integrity of the tax system is of paramount importance to the CRA. As one of the largest holders of personal and financial information and data in the GC, Canadians place their trust in the CRA to protect their information and data from unauthorized access or disclosure. That trust is crucial to ensure compliance with Canada’s tax system.

Public concerns with privacy and the protection of information and data continue to grow, informed by an increasing number of public and private sector privacy breaches. In addition, the threat landscape is constantly shifting and evolving, with fraud in benefit programs, increases in digital services, foreign state actor threats, renewed interest in government on the side of hackers, new intelligence being gleaned from the dark web, and emerging technologies for hackers. Canadians expect that their personal information and data is safe with us, so the CRA continues to adapt to this changing privacy and security landscape. We are building to not only meet the needs of today, but to also strategically position ourselves to address future threats.

The CRA is aware of the necessity to adapt its privacy management program as this landscape evolves. With the launch of the CRA Privacy Management Framework (PMF) in 2020, the CRA committed to enhancing its privacy practices, based on Privacy by Design principles, where privacy is systemically embedded into business practices and systems.

Considerations

For the CRA's tax and benefit administration to be most effective, it is imperative to have high-quality information and data. The CRA's ability to use its information and data and that of third parties allows for improved service, better-targeted compliance interventions, and the timely and accurate provision of benefits.

Current privacy and security prevention control measures include account identity validations, security screening, internal and external fraud risk assessments and internal audits. Proactive external fraud risk management activities as well as a coordinated holistic approach to addressing complex suspicious activities when they occur are new functions that were recently established to combat the ever changing fraud threat landscape. For example, the CRA is actively working with GC partners to introduce robust identity and access management controls that can be used across government platforms. The CRA’s detection control measures include an anonymous tip line and systems that monitor information and data access. As with any organization, despite the range of the CRA's existing controls, personal information and data can be inappropriately used or released. For those instances, the CRA has established response and mitigation controls to inform affected individuals and minimize the impact.

The CRA continues to leverage third-party assessments and benchmarking against peer organizations to enhance security. As threat trends change and gaps are identified, the CRA will adapt to effectively meet future privacy and security challenges.

Systems

The CRA Cyber Security Strategy is a strategic, risk-based approach for continuously assessing threats and opportunities in a volatile security environment. The relationship between information technology (IT) security and business is key to ensure "security by design", meaning when solutions are developed that security controls are built in from the start.

A multi-layered approach is used for IT security, with responsibilities for these layers spread across multiple organizations. The CRA also collaborates with other government departments, law enforcement, the Canadian Anti-Fraud Centre and the provinces and territories to protect taxpayer accounts and personal information.

Systems that are created and maintained with a proper security posture provide the basis for trust in CRA systems. Mitigation measures for security risks related to the protection of the confidentiality, integrity, and availability of CRA systems are in place. These mitigation measures provide assurance that security risks are identified and appropriately managed for all systems used by the CRA.

Information and Data

The CRA recognizes that while information and data carry tremendous value, their increasing volumes can impact their quality and use, resulting in potential risks related to transparency, accuracy, integrity, security, and privacy. The CRA is committed to mitigating these risks by enhancing quality, effective usage, and management of information and data. This is supported by the governing roles of the Chief Data Officer (CDO) and Information Management Senior Official (IMSO). CDO responsibilities include establishing and implementing data quality measures, validating tax and benefit data for external release, building standard data practices, creating a strong data infrastructure, and leading the data stewardship and Open Government initiatives. In collaboration with the IMSO, the CDO oversees, develops, administers, and monitors information and data policies as well as enables related awareness activities, frameworks, and strategies.

In collaboration with the Chief Information Officer, Chief Privacy Officer (CPO), Agency Security Officer (ASO), and the IMSO, the CDO oversees the implementation of information and data management, security, and privacy requirements within all systems and environments in a consistent manner.

The CRA provides both aggregate and microdata to external partners and stakeholders where required by legislation or where formal data sharing agreements exist, as well as through other various processes (media, Access to Information and Privacy, ad hoc requests, etc.). Various standards, controls, checks, and balances (including the application of various confidentiality standards) are in place to ensure privacy and security, data quality, and encryption standards are met.

Oversight

Maintaining a mature security posture requires continuous investment as well as ongoing monitoring and enhancement/adjustment of security controls. With the increase in frequency and sophistication of security threats, the CRA elevated the role of ASO to report directly to the Commissioner in January 2021 and created the new Security Branch in April 2022. The ASO is responsible for providing strategic leadership, coordination and oversight for all CRA security obligations, including the Agency’s Security Plan, which details strategies for the implementation of current and future priorities. This improves management of the CRA's security program, enhances collaboration, and formalizes roles and responsibilities to fully integrate security considerations into decision-making across the Agency.

In addition, the CRA has a CPO with a mandate of overseeing decisions related to privacy, including privacy assessments. To fulfill this mandate, the CPO champions personal privacy rights, including managing internal privacy breaches, and reports to the CRA's senior management on the state of privacy management at least twice a year.

The ASO and CPO work together and jointly chair the Agency Security and Privacy Executive Council (ASPEC) which oversees the governance, management and risk mitigation activities relating to security and privacy at the CRA.

Next steps

The CRA is bolstering its privacy and security posture by leveraging emerging approaches and technologies and making further improvements in information and data security, risk mitigation, fraud detection, and more. Ongoing assessments of processes and systems, as well as monitoring of systems and tools, will help the CRA identify and address emerging issues and trends as they arise, although there could be financial impacts if risks materialize. These activities will continue to ensure the protection of personal information and data and ensure trust in the tax system.

The CRA also ensures that employees are aware and have access to the essential training and resources necessary to fulfill their responsibilities regarding the use and management of information and data, including personal information with respect to their security and privacy requirements and considerations.