Our Roadmap for the Future (1999-2000 to 2001-02)

Excerpts from Revenue Canada's 1999-2000 Corporate Business Plan
(1999-2000 to 2001-2002)

Table of Contents

• Introduction
• Corporate Profile
  • Mandate
  • Our Strategic Foundation
• Operating Environment
• Strategic Direction
  • The Canada Customs and Revenue Agency
  • Our Corporate Objectives
  • Measuring Our Performance

Introduction

This year's Corporate Business Plan sets the course that our administration will pursue for the period from 1999-2000 to 2001-2002. It reflects our past record and brings a strategic focus to the areas that will be of prime importance in the next three years. The plan is the central planning and accountability tool for senior management at Revenue Canada.

The central theme underlying the Corporate Business Plan is the creation of the Canada Customs and Revenue Agency. The creation of the Agency is significant in three ways. First, it will allow our administration to provide better service to Canadians. Secondly, the Agency will enable us to reduce overlap and duplication in Canadian revenue administration by forging stronger relationships with our provincial and territorial partners. Finally, the Agency will provide a vehicle for improving the management of our internal operations, in particular human resources management.

The main section of this document, entitled Strategic Direction , is based on a framework of six strategic and enduring goals. Our first two goals are to provide high-quality and affordable services, and to deliver responsible enforcement programs. The other four are: to treat clients fairly; to reduce the compliance burden through simplification and efficiency; to manage our human resources effectively; and to make sure management and corporate services effectively support program delivery.

In describing our strategic direction, the plan sets out 12 corporate objectives. These objectives reflect the specific gains we aim to achieve over the next three years. We have also outlined corporate strategies to show how our objectives will be achieved. In addition, each objective has a table outlining the results we expect to see from the initiatives planned or underway.

The plan describes an ambitious agenda for change that includes maximizing the benefits associated with the Agency, making significant service improvements, enhancing our compliance programs, and improving fairness. Collectively, these measures will help ensure that we give Canadians the best possible customs and revenue administration on the eve of the new millennium.

Corporate Profile

Revenue Canada's change to an agency will be shaped by two things: our well-defined mandate and strategic foundation on one hand, and the emerging challenges and opportunities in our operating environment on the other. This section describes the first of these two influences-the mandate and strategic foundation of the organization. The subsequent section examines the major trends and developments in our external operating environment that were considered when establishing the corporate objectives outlined in this plan.

Mandate

Revenue Canada draws its overall mandate from the Department of National Revenue Act. With the enactment of the enabling legislation for the Agency, our mandate will flow from the Canada Customs and Revenue Agency Act. The Agency will be responsible for administering existing program areas as described below. It will also be responsible for implementing new agreements with the provinces and territories, other government departments, and aboriginal governments.

Our mandate is and will continue to be:

• to collect revenues and administer tax laws for the federal government and for provinces and territories;
• to provide border services and administer legislation governing international trade and travel; and
• to deliver certain social and economic benefit programs to Canadians.

Revenue collection and tax administration - Revenue Canada collects government revenues totalling some $245 billion annually. The revenue programs we administer sustain other government programs and services, and contribute to national economic prosperity.

In delivering our revenue collection programs, we aim to:

• maintain the integrity of the tax system;
• promote a level playing field;
• collect all properly assessed revenue in a manner that is fair;
• provide the right information to our clients; and
• use client feedback for continuous improvement.

Our revenue collection programs are also designed to promote efficiency in our administration, facilitate voluntary compliance, and enhance effectiveness in establishing compliance.

Revenue Canada collects the following taxes: all federal income taxes; personal income taxes for all provinces except Quebec; corporate income taxes for all provinces except Alberta, Ontario, and Quebec; goods and services tax (GST) and harmonized sales tax (HST) in all provinces except Quebec, which collects the GST on behalf of the Government of Canada; provincial sales tax (PST) at the border for Manitoba and Quebec, and for Ontario starting in 1999; and customs duties. We also collect commodity taxes and levies for certain provinces, Canada Pension Plan contributions, and Employment Insurance premiums. These revenue programs sustain other government programs and services, and contribute to the social well-being and economic prosperity of all Canadians.

Border protection and trade administration - Revenue Canada implements and administers Canadian laws that govern international trade and travel. By protecting Canadians against illegal goods and inadmissible people, we contribute to safer homes and streets, and a healthy environment. By helping Canadian businesses to compete more effectively, we promote international trade and industrial competitiveness.

We conduct the following border management activities: processing commercial goods and travellers; monitoring and controlling imports of controlled and restricted goods; and preventing entry of prohibited materials and inadmissible persons. We administer border and trade legislation, including international agreements such as the World Trade Organization Agreement, the Canada-U.S. Free Trade Agreement (FTA), and the North American Free Trade Agreement (NAFTA).

Income redistribution - Revenue Canada delivers a number of social and economic benefit programs through the tax system. Our primary aim in delivering these programs is to pay the right person the right amount at the right time.

The benefit programs we administer include GST/HST credits, the Canada Child Tax Benefit, and scientific research and experimental development tax credits. In addition, we currently administer the following benefit programs on behalf of the provinces and territories: the British Columbia Family Bonus, the Alberta Family Employment Tax Credit, the New Brunswick Child Tax Benefit, Newfoundland Harmonized Sales Tax Credit. With the implementation of the National Child Benefit on July 1, 1998, Revenue Canada also administers the Nova Scotia Child Benefit, the Northwest Territories Child Benefit and the Saskatchewan Child Benefit. Revenue Canada is negotiating to administer similar programs for Newfoundland and Labrador, and the Yukon and Nunavut territories.

To deliver our mandate, we must understand, interpret, and apply the provisions of more than 185 acts, regulations, incentives, credits, surtaxes, and international tax treaties. The transactions range from simple payments to benefit recipients, such as the more than 35 million Canada Child Tax Benefit payments, to audits of the complex business transactions of multinational corporations. The chart and table below illustrate the scale of our operations and the complexity of administering our mandate.

Number of transactions
processed during 1997-98

Our Strategic Foundation

Revenue Canada is increasingly becoming an integral part of the lives of individuals and businesses in Canada. Given this scope and the regulatory nature of our mandate, we have to rely on continuing high levels of voluntary compliance to be effective. With a work force of more than 40,000 people, it is also essential that our administration be guided by corporate directions that will ensure continuing success. These directions are represented in our mission, values, and vision of the future, referred to as our strategic foundation.

Mission

Revenue Canada's mission is to promote compliance with Canada's tax, trade, and border legislation and regulations through education, quality service, and responsible enforcement, thereby contributing to the economic and social well-being of Canadians. At Revenue Canada, compliance is principally based on the concepts of voluntary compliance and self-assessment. Our most basic and enduring challenge is to maintain high levels of voluntary compliance by striking a balance between client education and quality service on the one hand, and responsible enforcement on the other.

Values

Carrying out our mission requires us to interact daily with thousands of Canadians from every walk of life. In an organization as large as ours, effective interaction among colleagues and co-workers is also a critical factor in fulfilling our mission. We strive to ensure that our behaviour toward clients and colleagues alike is guided by four core values: integrity, professionalism, respect, and co-operation. The essence of what these four values mean to us is described below:

• Integrity is the cornerstone of our administration, ensuring that we treat people fairly and apply the law fairly. Integrity requires that we act with honesty and openness.
• Professionalism is the key to success in achieving our mission, reflecting an ongoing commitment to the highest standards of achievement. Professionalism requires that we act with dedication and skill.
• Respect is the basis for our dealings with colleagues and clients, being sensitive and responsive to the rights of individuals. Respect requires that we act with courtesy and consideration at all times.
• Co-operation is the foundation for meeting the challenges of the future and building partnerships aimed at realizing common goals.

Vision and strategic goals

Our vision helps describe the character of the organization we hope to become. Our strategic goals support this vision.

Our vision of the future is to be recognized and respected by clients for our integrity, fairness, and innovation in administering high-quality, affordable programs. Our progressive stance will encourage new inter-governmental and international partnerships, fostering greater government efficiency and a stronger economic union.

We will earn our good standing with Canadians through the continued pursuit of six strategic goals.

• Quality services and client education

To provide accessible, responsive, and reliable services at an affordable cost.

• Responsible enforcement and border protection

To deliver fair, responsible, and effective enforcement programs in a manner that directly responds to changes in the environment.

• Fair administration

To apply the principle of fairness diligently and consistently in all programs to sustain public confidence and encourage voluntary compliance.

• Simple and efficient processes

To minimize the administrative cost and compliance burden imposed on our clients by streamlining and simplifying our legislation, programs, and operations.

• Knowledgeable and skilled people

To ensure that our people have the knowledge, skills, and support needed to work effectively in an environment that promotes and recognizes exemplary performance.

• Effective management and corporate services

To provide effective support for our programs and initiatives through responsive, modern, and integrated corporate policies, systems, and processes.

Operating Environment

As described in the preceding section, the mandate of Revenue Canada will remain fundamentally unchanged under Agency legislation. Our operating environment, however, is changing rapidly due to external trends and challenges. This section examines these challenges and their implications for our strategic direction.

Canada's Merchandise Imports
and Exports
(constant $ billions)

A key international trend is seen in the increase in foreign trade over the past few decades. Indeed, imports are a key workload indicator for Revenue Canada's customs programs. While growth in imports and exports has slowed in the past year due to a downturn in Asian and Latin American markets, the Conference Board of Canada predicts that foreign trade will continue to represent an important source of economic strength. Revenue Canada will be challenged to respond to the growth in trade resulting from multilateral trade policies as well as new and emerging free trade agreements with Europe, the Western Hemisphere, and members of the Asia-Pacific Economic Co-operation (APEC) community.

The increase in imports to Canada is combined with growing trends in world tourism and unprecedented levels of international migration. For Revenue Canada, the challenge is to continue to protect national borders while servicing an increase in leisure travel, business travel and indeed, commercial activity. North American countries have responded by making sustained efforts to co-ordinate the protection of borders.

Co-ordination is a necessity in meeting many of the challenges of today's global economy. Revenue Canada began a concerted effort at collaborating and partnering with foreign governments and international organizations to strengthen our understanding of the scope of international investment, finance and taxation systems. These efforts are aimed at protecting the revenue base of governments worldwide in response to the increased mobility of labour, money and capital. Measures developed to respond to these challenges include enhanced verification of foreign income, new transfer pricing legislation and promotion of principles of good tax administration.

"[The] growing legion of very small businesses will continue to play an important role in Canada and other developed economies."
Catherine Swift, President and CEO Canadian Federation of Independent Business

Continued success in protecting Canada's revenue base will also depend on the ability to assess shifts in society and the marketplace. The challenge for Revenue Canada has been and will be to develop an early understanding of societal and business trends so that we can make timely and appropriate adjustments to service and compliance programs. Revenue administrations worldwide recognize that societal attitudes about tax policy are shifting. Likewise, the growth of new industries, new ways of conducting business and shifting business attitudes contribute to an increasingly more complex business environment.

Business Investment in Computers
and Other Office Equipment
(constant $ billions)

The business environment in Canada is profoundly affected by the technological revolution. An important feature of this revolution is the growth of electronic commerce as a means of doing business. Along with the real benefits derived from its use, the threats are no less real: difficulties in tracking funds; increased propensity for the evasion of taxes through the use of offshore facilities and tax havens; and other non-compliance trends. Among the measures Revenue Canada has adopted to counter the challenges presented by electronic commerce are partnerships with international tax, customs, and police organizations and other federal and provincial departments, as well as with private sector organizations.

The Canadian governance structure is being redefined by a new relationship between the federal government and the provinces, recently outlined in the agreement on the social union. The union concerns all social programs in the social safety net including health care, all levels of education, social services, social assistance, employment insurance, personal tax policy, old age security and income supplements. Many elements of the social safety net are administered through the Income Tax Act. For this reason, the tax system, and Revenue Canada in particular, will be a key medium in co-operative federalism.

Balancing the interests and preserving the rights of citizens in a fair and equitable manner is fundamental to public service
Annual Report of the Clerk of the Privy Council, 1997

Canada's new governance structure is also influenced by shifting relationships between the state and its citizens. At Revenue Canada, and indeed throughout government, the users of public services are now characterized as clients and the administration has become more business-like. Also, fairness, openness, professionalism, respect and accountability are among the characteristics of good governance that will yield public confidence in the services offered.

Roughly, 1 in 90 Canadians in the labour force works for federal departments and agencies and 1 in 350 works for Revenue Canada.

The federal public service continues to evolve as seen through the various levels of revitalization initiatives within the Public Service of Canada. Revenue Canada will be an important element of this revitalization. With a work force of over 40,000, human resources management will be a key factor for the success of the proposed Canada Customs and Revenue Agency. The adoption of private sector practices in human resources management will be a major element of the Agency. We will need to build on the existing strengths of Revenue Canada and define new core competencies that will meet the international, domestic, social and technological challenges outlined above.

Strategic Direction

The Canada Customs and Revenue Agency

Revenue Canada is undergoing a major transformation as we change from a federal department to a government agency. To take advantage of this transformation and the opportunities it presents, we conducted a close and critical examination of our business directions, the relationships we have with our clients and stakeholders, and our investments for the future. This section presents the results of this examination, and lays out the goals, corporate objectives, and strategies we will employ to guide future progress.

The creation of the Canada Customs and Revenue Agency is not an end in itself. Rather, it will be the means for providing Canadians with the best possible tax, trade, and customs services. The Agency will help us to significantly reduce duplication in tax administration among the federal, provincial, and territorial governments. It will also foster a better working relationship between these levels of government. The innovative structure of the Agency-a more business-oriented management framework with strong ministerial accountability for program matters, as well as a Board of Management-will establish a platform for managing these changes.

How will the Agency achieve its aims?

First, the Agency will administer its programs more efficiently and provide better service if it is organized and managed according to its own tailored systems, rather than those of the federal public service as a whole. It will be better placed than a traditional government department to respond to client needs, to provincial and territorial requirements, and to a constantly changing business environment.

Secondly, one agency dedicated to administering federal, provincial, and territorial revenue programs and other related programs will have important benefits for Canada. One administration will result in significant savings to provinces and territories, and will reduce the overall cost of tax administration for Canadians. It will also lessen the cost to business of complying with our tax laws, thereby improving the competitiveness of Canadian goods and services.

How is the Agency reflected in this plan?

The Agency is based on three key themes, which guided the development of this plan:

• better service to Canadians;
• closer working relationships with other levels of government; and
• better management.

Better Service to Canadians

Improving the quality of service to our clients is our first and foremost strategic goal. The Agency gives us an opportunity to renew our commitment to quality service. We will set in place a service enhancement program to build on past achievements, focus on client needs, and take full advantage of new opportunities. This plan includes specific objectives and strategies that will pursue for improving service quality.

The Agency's Board of Management, to be made up of qualified individuals from the private sector, will be instrumental in overseeing the design and implementation of our service program. Members' breadth of experience and perspective on client service will be a strong catalyst for change, moving the organization in a direction that will have quality service at its centre.

Fairness is an essential element of our entire administration. Revenue Canada is already a world leader in treating citizens fairly. This focus will be carried over full force into the Agency. The Agency's design, with its emphasis on ministerial accountability for program administration, will make it easy to encourage fair treatment of clients. Programs begun by Revenue Canada, such as the Fairness Initiative, will continue in the Agency.

Closer Working Relationships with Other Levels of Government

Another central aspect of the Agency will be its improved accountability for the services it provides to its partners-other federal government departments, and provincial and territorial governments. In creating the Agency, the federal government is designing a vehicle that will be more responsive to provincial needs for administering existing federal-provincial programs. It will also earn new business by providing high quality services at lower costs to provinces, territories, and other federal departments.

This improved co-ordination of federal and provincial programs will lead to savings both for governments in administration, and for business in complying with the law. It will also lead to a significant reduction in paper burden for business. The overall impact will be an improved environment in the business-government relationship, which will contribute to improved compliance by business with tax and customs laws.

Better Management

A successful Agency will require significant changes in corporate support and administrative management. In addition to the required new administrative authorities, the governance structure of the Agency and its Board of Management will compel us to think in a way that is more corporate and more focussed on performance. To support this change, Revenue Canada is implementing a new integrated planning process and management framework, intended to bring together all the necessary elements of an effective corporate planning process. This includes a tighter congruence among planning, monitoring, reporting, and accountability mechanisms, and a more effective and timely approach for managing resources and making the requisite trade-offs and decisions.

The Agency will also be better positioned to support quality service through more tailored, efficient, and responsive administrative systems. Managers and staff will spend less time and effort on indirect activities, and more time and effort on primary program responsibilities. This will translate into better service to the public. The management changes will result in long-term savings, which will go directly to service enhancements.

A first-rate work force is the number one requirement for making the Agency work. To ensure that this work force is in place, the human resources management system needs a major overhaul. The Agency provides an opportunity to do this in a way which is modern, effective, and innovative.

Planned changes in the human resources structural framework will improve the Agency's ability to attract and retain the professional staff needed for compliance activities. The existing framework has created some problems in hiring and retaining auditors, computer programmers, and other professionals. While changes will be gradual as the Agency's new human resources framework is implemented over time, we expect to see improvements during the planning period.

Managing the agency transition

A key focus in 1999-2000 will be managing the transition to an agency. To do this, we have established a comprehensive transition planning and control process, focussing on several key areas, including:

• governance issues;
• human resources planning and administration;
• relations with other service providers, such as the Department of Justice and Public Works and Government Services Canada;
• changes to policies; and
• corporate identity.

Detailed plans for each of these elements will take into account the broader strategic direction set out in this document.

Our Corporate Objectives

The chart on the next page illustrates the alignment of Revenue Canada's mission and vision, six strategic goals, and related corporate objectives. We have identified 12 corporate objectives to pursue from 1999-2000 to 2001-2002. These objectives define our direction for the planning period, and provide a focus for management attention and accountability.

Each of the strategic goals and corporate objectives is discussed in detail in the pages that follow. We have included a summary of our past performance and future plans for each goal, to provide some context for our ongoing efforts to improve programs and services. We have outlined our corporate strategies and have identified the results we expect to achieve from the initiatives planned or underway.

Click here for larger version of graphic

1. Quality services and client education

Our goal is to provide accessible, responsive, and reliable services at an affordable cost.

We base our programs and operations on the belief that most people will voluntarily comply with Canada's customs and tax laws. To make it easy to comply, we help and inform people so they know and understand their Canadian legal obligations and entitlements. One of our ongoing commitments is to provide the right information to clients and to use their feedback in support of continuous improvement. We are also committed to the efficiency of our administration; the facilitation of voluntary compliance; and effectiveness in establishing compliance.

In recent years, we have followed an ambitious program of service improvement that supports the Canadian government's commitment to give people the best service it can afford. This commitment is reflected in a long list of past and current initiatives, and is being reaffirmed in the creation of the Canada Customs and Revenue Agency. The Agency will improve the services we have developed, and it will offer new services to meet the needs of Canadians.

Our Record

By understanding client needs, we can continue to develop a strong service orientation. Through extensive consultation and client surveys, we know that client satisfaction and voluntary compliance depend on our ability to give accurate, timely, accessible, and responsive service.

The services we provide cover all areas of our mandate and include:

• responding to public enquiries;
• processing and assessing income tax returns;
• processing benefit payments;
• processing travellers;
• informing importers and exporters; and
• delivering services for provinces and territories.

Over the years, we have invested resources to:

• improve the accessibility and accuracy of telephone enquiries services;
• improve consistency in service by developing and implementing standards;
• use technology in new ways for more efficient and timely service; and
• enhance service by increasing our participation in single-window and joint-window initiatives with other departments.

Throughout 1997-98, we improved our telephone service. In the 1998 income tax filing season, accessibility rates improved by 100%. We answered 1½ million more calls than in 1997. These improvements were the result of several factors including the establishment of a national 1-800 Overflow Call Centre.

Compliance Rates (%)
for Travellers

To provide better service to our commercial clients, we also launched the Virtual Customs Office, an Internet site designed to provide electronic customs services to importers and exporters seven days a week, 24 hours a day. We processed 109 million travellers in 1997-98. Our survey shows that 91% of travellers are reasonably-to-very satisfied with our service. A key outcome of our travellers program was a compliance rate of 92% for air travellers and 97% for highway travellers.

The Customs and Trade Administration Blueprint: A Discussion Paper, launched by the Minister in the fall of 1998, sets out a proposed vision for the customs program. One of the key commitments made in the Blueprint to support this vision is to continue to enhance service by providing clearer, more timely information; offering choices and convenience; and by focussing on consistency and accessibility.

Provincial Benefit Programs
Administered in 1997-98

Along with the British Columbia Family Bonus, we launched three new provincial benefit programs with Alberta, New Brunswick, and Newfoundland. We also developed new programs with the Northwest Territories, Saskatchewan, and Nova Scotia. These programs demonstrate how we are working with other levels of government to deliver income support payments. Our efforts help create efficiencies and cost savings for the public.

Number of
Commercial Releases

We use technology to improve our work, particularly advancements in electronic service. These advancements enhance accessibility and improve our consistency of service. For example, in our 1997-98 Performance Report, we referred to our use of the customs machine release system (MRS) for low-risk shipments. Participation has increased in MRS and is at almost 10% of all electronic data interchange releases.

Processing Time (days) for Individual Tax Returns

We have also used technology to offer a range of options for clients to file their income tax returns. In the 1998 filing season, about 5.5 million individual income tax returns were filed electronically (TELEFILE and EFILE). This is about 26% of all returns that individuals filed. The average processing time for TELEFILE and EFILE returns is 11 and 15 days respectively, compared to 28 days for paper returns. These options provide faster service and make our operations efficient.

Our Direction

From 1999 to 2002, we will focus on building the capacity required to take on new work, while continuing to effectively provide and improve existing services. As stated in corporate objective 1 below, we will do this mainly through a comprehensive service strategy being developed for the Agency. Partnerships with the provinces and territories, electronic service, and international relations also represent key areas for our administration over the next three years.

With respect to customs, the release of the Customs Blueprint follows a number of years of re-engineering work done in consultation with national importing and exporting organizations, the tourism industry, other government departments, broker and carrier associations, and law enforcement agencies. This comprehensive framework sets out the proposed vision for the customs program, with specific strategic objectives aimed at defining how this vision will be achieved. Future work will be guided by the outcome of our consultations on the Blueprint discussion paper. The timing of initiatives will therefore be confirmed with the issuance of the five-year action plan in the fall of 1999.

Corporate Objective 1

To have a multi-year plan for the Agency outlining its approach for providing high quality service to Canadians

The improvements in service outlined above are only a few examples of our efforts to develop a strong service orientation throughout our organization. We continually check our services for their effectiveness. Our priority will be to enhance the quality of service and to offer new services that respond to client needs by:

• taking an inventory of the programs and services we deliver;
• confirming programs and services that align with our mandate and core business, as well as areas where new services could be considered; and
• outlining a service direction for the Agency based on a plan to manage and improve our services.

The following table contains a summary of the results expected from the key initiatives that will be pursued by branches across the organization.

* Blueprint consultation process will determine priority and timing of initiatives

Corporate Objective 2

To achieve greater levels of program integration through partnership arrangements with the provinces and territories

Although our first objective focuses on developing a broad service direction for the Agency, this does not replace other efforts to improve our service. The Agency will need to strengthen partnerships with the provinces and territories to support the goal of quality service.

To integrate programs, we will:

• identify businesses and processes we have in common with the provinces and territories;
• pursue new service agreements aligned with our mandate and core businesses through an enhanced marketing and business development capacity; and
• build a consistent and strategic approach to negotiating agreements.

Outlined in the table below are the results expected from the initiatives that will be pursued over the next three years.

Corporate Objective 3

To advance the use of electronic service delivery

Electronic commerce is one of the six core elements of the Government of Canada's Connecting Canadians agenda. It aims to make Canada a world leader in developing and using electronic commerce by 2000. Electronic service will give us and our clients cost savings and efficiencies. It makes our service more accessible, speeds our processing, and reduces errors.

To increase electronic service we will:

• make electronic filing, payment, and communication so simple, inexpensive, and trusted that clients will prefer these methods;
• increase access for electronic filing, payment, and communication products and services for individuals and businesses;
• protect transaction integrity and accuracy;
• extend the use of electronic commerce everywhere to increase operating efficiency and give direct benefits to clients; and
• promote client participation in electronic services through the marketing of electronic service options to targeted client groups.

With the implementation of a broad range of initiatives, Revenue Canada expects to achieve the results summarized in the following table.

* Blueprint consultation process will determine priority and timing of initiatives

Corporate Objective 4

To enhance our level of activity and influence at an international level in support of government trade and foreign policy objectives

Supporting the ability of Canadian businesses to compete in the global economy is a key foreign policy objective for the Canadian government. We will continue to play an important role in supporting Canadian businesses through fast and efficient service, sharing our expertise, and providing technical help to foreign customs and revenue administrations.

We will increase our international activity and influence over the next three years by:

• working closely with international revenue, customs, and trade organizations to develop ways to simplify rules and procedures; and
• marketing our expertise by sharing best practices and providing technical assistance.

The following table outlines the results expected from the multiyear initiatives that our administration is planning to pursue.

* Blueprint consultation process will determine priority and timing of initiative.

** Assuming progress of legislation through Parliament.

2. Responsible enforcement and border protection

Our goal is to deliver fair, responsible, and effective enforcement programs in a way that responds to changes in the environment.

Compliance is best achieved through a balanced program of service and enforcement. Our enforcement programs contribute to the economic and personal security of Canadians, and maintain a level playing field for all Canadians and Canadian business. In today's complex environment, our approach to compliance continues to evolve in response to economic realities and changing technology. Our programs must also address changes in public expectations as Canadians increasingly want enforcement programs to target those who wilfully fail to comply.

Our Record

In 1997, we released a strategy called Compliance: From Vision to Strategy. Its essence is to:

• use risk assessment and compliance research to target high-risk areas; and
• minimize the compliance burden for those who voluntarily comply.

Our compliance strategy has guided the development of risk-management techniques ranging from the matching of information to sophisticated statistical analyses. We have also developed a corporate policy on risk management to support our enforcement programs. One of the main objectives of this policy is to ensure the effective identification and management of risks that may affect our success.

Total fiscal impact of verification and enforcement programs

Our risk-management efforts lay a strong foundation for the future. For example, the refinement of artificial intelligence techniques demonstrates our success in identifying high-risk tax returns. In 1997-1998, the dollars recovered from reviews of targeted returns were 175% more than the dollars recovered from reviews of randomly selected returns.

Our underground economy initiatives led to our completing more than 10,446 audits, and encouraging businesses to comply voluntarily and rejoin the economy. We took steps to address the compliance of unincorporated businesses and self-employed people. As stated in the 1997-98 Performance Report, 83% of audits started in this sector resulted in about $335 million in tax being assessed. The total fiscal impact of these, combined with other verification and enforcement programs, was $5 billion in 1997-98.

With respect to customs activities, the use of risk analysis resulted in the number of drug and contraband seizures increasing by 19% in 1997-98, compared to 1996-97. The increased use of x-ray systems, ionscans, and detector dogs in drug seizures resulted in:

• 60 x-ray seizures worth $35 million;
• 64 ionscan seizures worth $228 million; and
• 1,005 detector dog service seizures worth $145 million.

Contraband seizures

The Customs Blueprint builds on this progress, and proposes a number of measures to enhance the enforcement program through risk management. These measures and their timing will be confirmed on the basis of our consultations on the Blueprint discussion paper. At the same time, we will proceed with the implementation of Customs Officers Powers as well as the Firearms Act.

Our Direction

To enhance our approach to compliance, we will continue to follow the strategic directions in the Compliance Strategy, as well as the key commitments set out in the Customs Blueprint. Of continuing importance is the refinement of risk detection and management as a way of targeting high-risk areas and minimizing intrusion in low-risk areas. A second key consideration for the planning period is addressing the compliance implications of electronic commerce technology. Our work in this area will be guided by the Minister of National Revenue's September 1998 response to the report of the Minister's Advisory Committee on Electronic Commerce.

Corporate Objective 5

To increase our capacity for sound risk detection and management, and to develop effective strategies to address high-risk areas

Effective risk management and strategy development will be critical factors in ensuring the continued success of our enforcement programs. Our strategy to support this objective has three streams:

• integrate risk-management principles, techniques, and practices throughout our organization, based on our corporate risk-management policy;
• build on our Compliance Strategy by refining risk-management techniques and procedures across all enforcement areas; and
• pursue our commitment in the Customs Blueprint to enhance enforcement through a risk-management system and more effective identification of high-risk areas.

The following table outlines the results anticipated from the key activities which will be pursued over the three-year planning period.

* Blueprint consultation process will determine priority and timing of initiatives.

Corporate Objective 6

To put in place an electronic commerce action plan that addresses potential compliance risks

We must respond effectively to the growth and changes in electronic commerce. In doing so, we will follow a strategy that reflects the Minister of National Revenue's September 1998 response to the report of the Minister's Advisory Committee on Electronic Commerce:

• continuing to work closely with the Department of Finance Canada and international organizations to ensure that our administration is in step with international electronic commerce developments;
• participating in the international development of enhanced information sharing agreements and practices, while discouraging avoidance and evasion opportunities;
• working with the private sector through the four technical advisory committees created by the Minister of National Revenue (on taxpayer service, compliance and administration, interpretation and international co-operation, and consumption tax); and
• increasing our expertise through research and practice in the verification of electronic commerce transactions.

The results that we are aiming to achieve by the end of the planning period are summarized in the following table.

3. Fair administration

Our goal is to apply the principle of fairness diligently and consistently in all programs to keep public confidence and encourage voluntary compliance.

The attitude of citizens toward government is changing from what it used to be. Today, public confidence in government institutions must be earned with meaningful actions and concrete results. We try to earn the confidence of Canadians by ensuring that fairness is a core part of our operations. We strive to maintain a level playing field and to collect all properly assessed revenue in a manner that is fair. A high degree of public confidence in the fairness of our administration is a critical factor in maintaining high levels of voluntary compliance.

Amounts forgiven under the
fairness provisions

Our Record

We have built a solid record for fairness on several major fronts. As an illustration, the fairness provisions provide our employees with the discretion to cancel or waive penalties and interest in extraordinary circumstances. In 1997-98, we forgave more than $54 million in interest and penalties on income tax debts and almost $18 million in amounts relating to customs, excise, and GST/HST debts. Strengthening redress processes has been one of our priorities in recent years. In the spring of 1997, we started an appeals renewal initiative that has increased access to an open, timely, fair, and impartial redress system.

Also, we have moved to enhance fairness by maintaining a level playing field in tax and customs administration. For example, new tax reporting requirements were implemented in 1997-98 to address compliance issues related to foreign investments, government service contracts, and the construction industry. The Customs Blueprint states four key commitments for our customs operations. One of these is to ensure that business and travellers obey the rules so that no one is disadvantaged by the actions of others. The ways in which we will fulfill this commitment in the future will be confirmed following our Blueprint consultations.

Our Direction

Building on these achievements, the Minister of National Revenue launched a fairness initiative in March 1998. This initiative involved extensive consultation with clients and stakeholders, as well as a research study by the Conference Board of Canada into the fairness practices in more than 15 other countries. In February 1999, a detailed action plan entitled Setting a New Standard: A 7-Point Plan for Fairness was released to the public. Our commitment to enhanced fairness was also reaffirmed at that time through a fairness pledge. Implementing the seven-point plan, combined with a number of other initiatives, will ensure that our focus on fairness is carried over with full force into the Agency.

Corporate Objective 7

To demonstrate to the public the fairness of our customs and revenue administration

We will show Canadians our strong and continuing commitment to fairness by:

• developing a comprehensive guide on the rights of our clients;
• publishing standards for the service we provide;
• doing a better job of communicating with our clients;
• better equipping our employees to respond to client needs;
• identifying credits, benefits, and overpayments for clients;
• giving clients an opportunity to correct any omissions in their past dealings without penalty; and
• doing a better job of applying the fairness provisions in the laws we administer.

Our administration will pursue several key initiatives over the next three years, the centrepiece of which will be the implementation and monitoring of the 7-point fairness plan. The results that we intend to achieve from our program on fairness are depicted in the table that follows.

* Blueprint consultation process will determine priority and timing of initiatives.

4. Simple and Efficient Processes

Our goal is to minimize the administrative cost and compliance burden imposed on our clients by streamlining and simplifying our legislation, programs, and operations.

Although quality service and client education are key factors in encouraging compliance, designing compliance systems and procedures that are clear and simple is also important. This means having internal processes and legislative requirements that do not place an undue burden on businesses and individuals. As a result, they will be encouraged to comply with Canada's laws. Administrative costs in delivering our services will also be reduced.

Our Record

In recent years, we have made voluntary compliance easier. By streamlining and simplifying processes and procedures, we are minimizing compliance costs and the burden for clients while reducing government costs. Efficiency in administration, facilitation of voluntary compliance, and effectiveness in establishing compliance are today fundamental underpinnings of our ongoing operations.

Many of our activities aimed at simplification and streamlining fall under broader initiatives to re-engineer our major business processes. For example, we now offer clients a range of simplified individual tax returns that are tailored to their situations. Through the Business Window and Business Number initiatives, we have made it easier for business clients to update their accounts and get information using a one-stop service.

The re-engineering of customs processes has resulted in major gains in streamlining the movement of low-risk people and goods. Using ACROSS, importers and brokers can exchange cargo and release information electronically, reducing transaction time significantly. With CANPASS, we have modernized the travellers program so we can pre-approve frequent, low-risk travellers for quick and easy passage through customs.

In 1997, a national telephone contact centre started handling individual income tax and GST accounts receivable. The Collections Call Centre, which is part of a broader collections re-engineering initiative, replaced an earlier process that involved multiple routine letters. Among other things, the centre encourages compliant behaviour from GST registrants through early personal contact with those who have not filed required returns.

We have continued our efforts to simplify legislation. Our 1997-98 Performance Report discussed the simplification of the Customs Act and the new Customs Tariff. These legislative changes have resulted in savings in duties to Canadian businesses and consumers of about $90 million in 1998. Simplification included reducing and eliminating duties, removing obsolete tariff codes, harmonizing duty rates, and eliminating more than 300 tariff regulations.

In addition, the Minister of National Revenue has provided strong leadership by adopting simplification as a major priority area. In support of this priority, we made a series of legislative proposals to the Department of Finance to simplify tax rules and regulations. This work will continue in order to establish rules that better reflect the way in which individuals and businesses operate.

Our Direction

We will renew our efforts to simplify programs and processes through a newly-created centre of expertise. This centre supports, among other things, the development of new processes, and trains staff in the concepts and principles of continuous process improvement (CPI) methodology. At the same time, the Customs Blueprint will bring into greater focus a range of process improvements for customs and trade administration. Through a commitment to continue to improve service, we will try to make customs processes more convenient, and to minimize intervention for low-risk clients. Planned initiatives will be confirmed on the basis of the consultations currently underway on the Blueprint discussion paper.

Corporate Objective 8

To establish a systematic program for process improvement that will enhance the functioning of our business operations

Progress toward our objective will be helped by using CPI methodology as well as certifying certain processes under the International Standards Organization's ISO 9000 standards. These efforts will, in turn, ensure that planned simplification initiatives result in measured service improvement and increased compliance.

Our corporate strategy for process improvement over the planning period includes:

• reviewing and mapping our processes and clients, and their relationship to our core business to identify where we can improve; and
• applying process improvement methodologies (such as ISO 9000 standards and CPI initiatives) in areas that will give the best return.

The following is a list of the results anticipated from the initiatives which will be pursued over the planning period.

* Blueprint consultation process will determine priority and timing of initiatives.

5. Knowledgeable and Skilled People

Our goal is to ensure that our people have the knowledge, skills and support needed to work effectively in an environment that promotes and recognizes exemplary performance.

Profound changes in the way government delivers its services to Canadians have influenced us, and will affect us as well as our supporting human resources management regime. In the mid 1990's, the Government of Canada decided to unify the separate departments that dealt with tax, and customs and excise matters. In the following years, much effort was invested in successfully consolidating the new department to harmonize its systems, practices and organization.

In addition, reengineering of a number of business systems and processes was completed during this period. These changes, along with various changes in the workforce, have for some time suggested the need for different approaches and greater flexibilities in human resources management.

Our Record

In 1998-99, extensive consultation was done with departmental staff to develop a new human resources framework for the Agency. As part of our consultation efforts, we established five design teams composed of employees, managers and union representatives. We also established several other working teams composed alternatively of managers and union representatives, managers and employees, and managers only. The teams examined some of the key elements of a human resource management system. These included classification, staffing, recourse, training and development, employment equity, employment adjustment, other National Joint Council (NJC) directives, official languages and the management regime.

Among the themes which have emerged as a result of the work of the teams is a faster, fairer and more flexible human resources regime based on:

• emphasizing competency;
• integrating human resources planning so we can analyze our workforce and demographics, and anticipate human resource requirements; and
• automating human resource administrative processes. This would make more data available to all employees for easier decision making, more efficient administration, greater control over their careers.

Our Direction

The Canada Customs and Revenue Agency will offer big challenges and opportunities for our workforce. The Agency will have new employer status, new business, new authorities, and new approaches to resource management.

To realize the full potential of the changes, the human resources function must provide strong support to meet the business needs of the organization while respecting public sector principles. The Agency will need values- and results-driven human resources administration. This will result in an enhanced ability to attract and keep skilled employees, protect staff morale, and increase staff productivity.

Corporate Objective 9

To have in place a responsive and adaptive human resources function that will help us evolve to an employer of choice

In conjunction with the transition to Agency status, our strategy for change in relation to the human resources function is to ensure a smooth transition on "Day 1" along with a phased introduction of a complete and integrated HR regime, recognizing that the latter will require more time and effort. The new HR regime will be based on three underpinnings: planning, for support to our business lines and employees; competencies, simplifying and standardizing the identification of job requirements for use in all HR functions; and technology, in the provision of tools that will provide employees and managers with access to information, and simplified HR services and decision making.

The following is a list of the results anticipated from key activities which we will pursue in relation to the three year planning period.

Corporate Objective 10

To adopt a structured approach to change management that includes clearly defined and comprehensive transition plans

The transition to Agency presents the most obvious and significant challenge. New employment practices, new technologies and alternate work arrangements will also affect the work environment.

Over the next three years, the Agency will:

• develop a comprehensive transition plan and strategy focussing on innovations, equipping employees and managers to deal with the changes, and identifying benefits for the Agency's clients and employees;
• establish a productive labour-management relationship with labour organizations in the Agency; and
• enhance and support a strong, accountable and people-oriented management.

We will develop a structured approach to change management by following the initiatives in the table below.

6. Effective Management and Corporate Services

Our goal is to support our programs and initiatives through responsive, modern, and integrated corporate policies, systems, and processes.

We must have the right management and corporate services in place to support the delivery of the broad range of programs described in earlier sections of this plan. The management of our technological infrastructure is particularly critical, as information technology increasingly becomes an integral part of the way we do business. Also of major importance is a corporate infrastructure that allows for accountability management, performance management, and the application of modern comptrollership principles.

Our Record

Considerable strides have been made in recent years to improve our management and corporate services, particularly in the area of information technology. We have successfully built a technological infrastructure and transaction-processing capacity comparable to those of leading financial institutions. We have also made significant progress in ensuring systems readiness through the certification of all systems as year 2000-compliant. Our undertaking is to remain a leader in the use of information technology in the years to come.

Substantial progress has also been made in modernizing our management approach and strengthening underlying systems and processes. For example, we tabled the Sustainable Development Strategy in December 1997, as part of a government-wide effort to demonstrate greater accountability for sustainable development management.

In 1998-99, we implemented a new corporate planning framework called "One Plan - One Process" to streamline and integrate planning across the organization. Among the major benefits realized so far is the stronger integration of corporate, program, and resource planning. The framework also resulted in a closer alignment of planning, performance management, and accountability mechanisms, notably accountability contracts between the Deputy Minister and those who report directly to him. We will capitalize on this new corporate framework in a way that continues to support informed decision-making by senior management and eventually the Agency's Board of Management.

Coupled with the improvements noted above, significant changes have occurred in our corporate culture over the past several years. We have evolved into an administration with a strong client focus, as evidenced by the ongoing body of work designed to provide optimum service to our clients. We are an organization committed to bringing to life our values of integrity, professionalism, respect, and co-operation.

Our Direction

The next phase in the evolution of our corporate culture will be influenced by the creation of the Agency. The Board of Management will bring a new dynamic to the organization that will give us a more businesslike approach to managing our programs and services.

From 1999 to 2002, we will pursue two objectives. The first is to reshape our management framework to fit the needs of the Agency. The second is to renew our corporate culture to emphasize our four core values and inspire people to contribute to the organization's success.

Corporate Objective 11

To implement an integrated management framework for the Agency that enables effective planning, decision-making, resource management, and accountability

To achieve this corporate objective, our strategy will be based on three main streams:

• confirming the key elements of the Agency management framework;
• identifying the elements critical to Agency start-up to ensure readiness for its first day; and
• pursuing the development and implementation of an accountability management regime and a performance management regime as prerequisites to the overall framework.

The results expected from the initiatives that will be pursued during the planning period are summarized in the following table.

Corporate Objective 12

To promote a corporate culture that is vital and aligned with the Agency's values and future directions

We are faced with the challenge of ensuring that our corporate culture evolves in keeping with our core values as well as with our direction. The strategy to sustain a vibrant and dynamic culture will be pursued on four fronts:

• increasing the understanding by managers and employees of the Agency's four corporate values;
• effectively communicating our direction and the way in which managers and employees are expected to contribute to it;
• recognizing and rewarding behaviour and work performance that are in line with the Agency's values and direction; and
• ensuring that our management approach is open and transparent.

The table below outlines the results that we expect to achieve in terms of our corporate culture.

Measuring Our Performance

The Agency will develop a new program performance measurement framework. The need to demonstrate strategic progress to the Agency's Board of Management, coupled with the requirement in our legislation for high-level, auditable program performance measures, provide the context for recent work in this area.

Our goal is to establish, during 1999-2000, a framework of some 12 to 15 high-level program measures. These will be the basis of our next corporate plan and the way we will measure our achieving the goals and objectives in this plan. Once established, we will link these indicators to the performance measures we are using in our business lines and at the program delivery level in the field.

We expect that this framework will match the policy direction stated in the Government of Canada's Modernized Comptrollership initiative. We also expect to start formal consultations early this spring with the Treasury Board Secretariat and the Office of the Auditor General on both the overall framework and the nature of the program measures on which it will be founded.

In the interim, we have included tables in the preceding section that show expected results and supporting initiatives for each of our 12 corporate objectives. We will track our overall progress against each of these objectives, and their supporting initiatives, through the accountability reporting features of our senior committee structure. For example, our Departmental Management Committee devotes a meeting to each of our mid-year and end-of-year program performance reviews. This year, these reviews will be tied more tightly to the goals and objectives contained in this plan. We will work to establish opportunities with the Treasury Board Secretariat to share the results of this progress reporting.

There is also a need to measure program performance at a strategic level which includes measuring the impacts and effectiveness of the Agency's policies, programs, initiatives and the achievement of strategic goals. The measurement of these corporate areas require comprehensive measurement and analytical approaches which are normally beyond the capabilities of existing performance measurement systems.

We intend to meet these strategic information needs largely through our program evaluation function as this approach will provide broader measures of our corporate, program and strategic performance.

During the first three years of the Agency, our program evaluation activity will focus on the following:

• the establishment of pre-Agency measures of performance in order to establish a benchmark for comparison to future performance (includes service to the public);
• an evaluation of the new human resources regime to determine its success in meeting Agency requirements;
• an assessment of the effectiveness of our risk management systems in order to properly target non-compliance;
• the evaluation of our 7-Point Plan for Fairness and its impact on our appeal systems and general dealings with clients;
• the effect of technology and electronic commerce on service delivery and program compliance;
• the impacts of initiatives to reduce reporting and administrative burdens on clients; and
• an assessment of the degree to which post-Agency incremental benefits are being achieved (this study will be linked to pre-Agency benchmark study).

These studies have been selected because they support our strategic goals and focus on departmental priorities such as transformation to Agency, risk management, client service, fairness, and future program delivery through technology and electronic commerce. The results of these evaluations will be used to modify and fine tune the Agency's strategy in dealing with our clients and assessing risks in our compliance initiatives. They also present a unique opportunity for the public service to measure the cost and benefits of converting a large government department to an agency. The lessons learned will be useful for any future government initiative to convert to agency status.

In addition, evaluation studies will be conducted of those initiatives which are intended to strengthen the management capacity in the Department. This includes evaluations of the ISO 9000 pilot projects as well as the Continuous Process Improvement(CPI) initiatives outlined in the preceding pages.

These studies will produce results not only of interest to the Agency but to Treasury Board Secretariat, other government departments and other levels of government. While some of these studies can be funded internally, others will require external funding. We intend to enter into discussions with Treasury Board Secretariat to explore the possibility of working cooperatively on some of these studies, especially in those areas which impact on government administrative policies and the performance of the Agency as a whole.

The content and drafting process for this plan are the product of a new pilot planning process that we are putting in place for the Canada Customs and Revenue Agency. A key part of this pilot is a detailed evaluation designed to identify more enhancements needed to meet the needs of parliamentarians, the Agency's Board of Management, and the Treasury Board Secretariat. This evaluation will be done in the spring of 1999, and we will once again ask for input from our colleagues at the Treasury Board Secretariat.

Finally, we established last year an accountability contracting process for senior managers directly reporting to the Deputy Minister. This year, we are streamlining the process and extending it to all of our executive managers. A major part of these contracts will be supporting contributions to the strategic change agenda in this plan. In addition, we will link the first application of at-risk pay to certain of these key contributions. The contracts will also document key program output targets that are to be achieved within each of the budget lines and the related budget targets.