Original report submitted to the Minister of National Revenue November 2023.

CRA response to recommendations in the Taxpayers’ Ombudsperson’s 2022–2023 annual report.

Recommendation #1

The Taxpayers’ Ombudsperson recommends that the CRA proactively inform Canadians on Canada.ca of delays a program may be experiencing, to increase transparency and provide Canadians with the information they need.

CRA’s response Recommendation #1

The CRA agrees with this recommendation.

CRA’s action plan Recommendation #1

The CRA uses an established communication strategy, which includes informing Canadians proactively on Canada.ca as soon as possible once there is a known significant program delay that impacts taxpayers. The following are steps included in the strategy:

Prompt identification

Issues are usually detected by either CRA people or systems. Once an issue is confirmed, the CRA ensures lines of communication and an action plan are established.

Gathering information

Based on detailed information pulled from the various applicable data sources, specifications of the issue are determined, including cause, timeframe for a fix, and the number of clients impacted.

Communication

Using the information gathered, suitable communication is developed to inform impacted clients. Depending on the situation, communications may include direct telephone contact, phone queue messages, written acknowledgement, notice or banner posted on Canada.ca, such as benefit pages, etc. Communications are adjusted based on ongoing updates or changing circumstances.

Review process

A review is conducted to ensure the issue that caused the delay is fixed. CRA assesses the issue and its cause, in order to find a solution and prevent it from happening in the future. This includes how communication was undertaken.

The CRA recognises that enhancements can be made. To further transparency, the CRA will, by the end of Q3 2024/2025, review its approach for identifying and informing clients of significant delays, to ensure that core programs in the CRA’s program inventory communicate any significant service delays on the program’s Canada.ca webpage(s) and on the CRA’s Check Processing Time page in a timely manner, and that updates are made to these pages once updated timelines are known. CRA has already initiated such notifications, such as changes to the CRA’s Service Feedback – Complaints page, as well as the corresponding information on the Check Processing Time page, updated to show actual processing times in November 2023.

2024 Update Recommendation #1

The CRA reviewed its approach for identifying and informing clients of significant delays, to ensure that core programs in the CRA’s program inventory communicate any significant service delays on the program’s Canada.ca webpage(s) and on the CRA’s Check Processing Time page in a timely manner, where appropriate, and that updates are made to these pages once updated timelines are known.

Recommendation #2

The Taxpayers’ Ombudsperson recommends that the CRA:

• Update its Check CRA Processing Times tool to include tax returns and tax-related requests that have internal processing timeframes but no service standard; and
• Provide links from its income tax and benefit package web page and other tax-related request web pages to the Check CRA Processing Times tool.

CRA’s response Recommendation #2

The CRA agrees with this recommendation.

CRA’s action plan Recommendation #2

The CRA has been assessing the feasibility of establishing a service standard for complex adjustment requests by running a pilot starting in 2021–22, which has been finalized as of 2023–2024. The CRA has updated its Check CRA Processing Times tool to include the expected processing times for complex adjustment requests.

A link to the Check CRA Processing Times tool will be added to the Income Tax package webpage by the 2024 filing season. This page will be updated for the new year on January 23, 2024.

The CRA piloted a service standard for complex T1 adjustment requests starting in 2021–22 and has now finalized that pilot. The new service standard will be implemented for 2024–25.

There is a service standard for paper and electronic filing of the Income tax and benefit return:

For the T1 income tax and benefit return – paper, the CRA service standard is to issue a notice of assessment within 8 weeks of receiving the return and any required supporting documents.

For the T1 income tax and benefit return – electronic, CRA service standard is to issue a notice of assessment within 2 weeks of receiving the return and any required supporting documents.

The processing time is a targeted time. It applies to a return received on or before the filing due date. It does not apply to a return filed for a deceased, bankrupt, international or non-resident individual, or an emigrant. Also, the time does not apply in a situation where returns are filed for multiple tax years or the CRA has to contact an individual for more information.

2024 Update Recommendation #2

A link to the Check CRA Processing Times tool has been added to the Income Tax package webpage for the 2024 filing season as of January 23, 2024. This item has been completed.

The CRA implemented a service standard for complex T1 adjustment requests for 2024–25.

Recommendation #3

The Taxpayers’ Ombudsperson recommends that the CRA:

1. simplify the administrative process for the tax clinics and continue offering the Grant Program for the Community Volunteer Income Tax Program (CVITP) and the Income Tax Assistance – Volunteer Program (ITAVP) in Quebec; and,
2. consider making long term investments in the program for the benefit of Canadians.

CRA’s response Recommendation #3

The CRA agrees with this recommendation.

CRA’s action plan Recommendation #3

The CRA has introduced more tools and streamlining processes in order to simplify the administrative process for applying for the CVITP Grant. Based on feedback from the first year of the grant pilot, the CRA reworked the funding formula and associated administrative requirements to remove the need to list expenses on the application by providing base funding to support organizations’ costs. The CRA also provides email updates to organizations during the application period with the number of returns the organization has filed through the CVITP. The result is that organizations need only their own tombstone information in order to apply for the grant. The CRA has also provided regional employees with improved tools to more effectively assist organizations for the grant to ensure that the information they provide on registration for the CVITP is thorough and complete. This includes listing all volunteers when registering, using the Community Organization Identification Number (a number that allows the CRA to count the number of returns filed by the organization) and indicating clientele in their registration profile (for example, Indigenous). Finally, the CRA also provides annual webinars to help organizations navigate the process.

As the CRA finishes up the third year of the grant, it has approved over $8.7M in grant payments to 3,367 applicants. As recently announced by the Minister of National Revenue, the grant program will continue for a 4th year and up to $5.9M will be available to support tax clinics in communities across the country.

2024 Update Recommendation #3

The CRA continues to streamline processes to simplify the administration and application process.

The CRA also acknowledges the success of its CVITP Grant pilot and will continue to seek funding for the Grant. The CRA will be transparent with community organizations by sharing plans for the 2025 filing season as soon as possible.

Note: The Income Tax Assistance – Volunteer Program (ITAVP) is administered jointly by the CRA and Revenue Quebec.

Recommendation #4

The Taxpayers’ Ombudsperson recommends that the CRA find new ways to estimate and identify non-filers in Canada and their demographical make-up. The CRA will then be able to use this data to better educate and inform vulnerable populations who may be entitled to apply for benefits but who are not currently receiving them.

CRA’s response Recommendation #4

The CRA agrees with this recommendation.

CRA’s action plan Recommendation #4

Data on non-filers, particularly those who do not interact with government, is incomplete and in some cases does not exist. Information available to CRA on non-filers is generally limited to individuals who have not filed a tax return but for whom employment or other information slip data is available, and individuals who have filed a tax return at some point but subsequently stopped filing. As such, it is not possible for the CRA to identify all non-filers, since tax filings are the primary source for identifying and assessing client’s eligibility for benefits.

However, CRA is committed to estimating and identifying non-filers in Canada, and has a number of initiatives to identify and engage with non-filers, such as: promoting Simple File, leveraging strategies that focus on supporting newcomers, youth and Indigenous peoples, annually issuing the Non-Filer Benefit Letter, encouraging the adoption of the “Learn About Your Taxes” educational resources in schools, and working with Immigration, Refugees and Citizenship Canada to ensure newcomers to Canada are well-informed about their tax filing obligations and the benefits of filing.

CRA will also explore a new way of identifying non-filers by working with Statistics Canada to explore a complementary way to estimate non-filing rates for six vulnerable population segments (Indigenous, youth, seniors, newcomers, housing insecure individuals, and persons with disabilities) by linking Statistics Canada’s Census data to CRA’s detailed administrative income data and will publish a final joint report to the Standing Committee on Public Accounts in April 2024.

2024 Update Recommendation #4

While it is not possible for the CRA to identify all non-filers, since tax filings are the primary source for identifying and assessing client’s eligibility for benefits, CRA remains committed to estimating non-filers in Canada, and has a number of initiatives to identify and engage with non-filers, such as: the SimpleFile by Phone service offered to lower-income and non-taxable individuals in February of each year. In 2024, the CRA more than doubled the number of SimpleFile by Phone invitations, inviting more than 1.5 million lower-income Canadians with a recent filing history, to file using the simplified option. As of October 1, 2024, over 48K individuals have used the service, with 92% of all invitees having filed their tax return using a variety of filing methods available to them.

The CRA is also on track to increase the number of invitations to 2 million in 2025. In summer 2024, the CRA expanded its SimpleFile options to all provinces and territories as part of a 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.

The CRA is also promoting Simple File, leveraging strategies that focus on supporting newcomers, youth and Indigenous peoples, annually issuing the Non-Filer Benefit Letter, encouraging the adoption of the “Learn About Your Taxes” educational resources in schools, and working with Immigration, Refugees and Citizenship Canada to ensure newcomers to Canada are well-informed about their tax filing obligations and the benefits of filing.

CRA and Statistics Canada have explored a complementary way to estimate non-filing rates for six vulnerable population segments (Indigenous, youth, seniors, newcomers, housing insecure individuals, and persons with disabilities) by linking Statistics Canada’s Census data to CRA’s detailed administrative income data providing information on the sociodemographic and geographic characteristics of individuals who could be hard-to-reach or vulnerable. These findings will be published on Canada.ca in 2025. In addition, a final report to the Standing Committee on Public Accounts in April 2024 has been published Access to Benefits for Hard-to-Reach Populations (publications.gc.ca).