Anticipated Result: Clients receive timely, accessible, reliable, and fair service that is responsive to their needs

We strive to provide a dispute resolution process that maintains high levels of transparency, accessibility, and consistency. These attributes help to promote fair and impartial treatment of our clients.

To ensure that all clients are aware of their right to redress and how to access Appeals services, we advise potential clients of the appeals process and their appeal rights through our major tax and benefits forms. In all, over 64,000 disputes were received during 2003-2004, with 69% of these from individual income tax filers.

The 2003 CCRA Annual Survey 1 indicates that 72% of Canadians are aware of their right to file a dispute if they disagree with our decisions, which is consistent with past survey results.

The On-line Internet product My Account was released in June 2003. To further enhance the accessibility of redress, we worked during the year to expand this service to allow individual Income Tax filers to request an administrative review of their assessments. We expect this to be available by October 2004.

We raised our service standard in 2002-2003 to ensure that 85% of clients from each program area who filed disputes are provided with a status update within 30 days of filing. The update gives a contact name and telephone number and can include an indication as to when an appeals officer will be in contact with the client. This year we again exceeded our target and in fact, we exceeded the targeted percentage in every program area by contacting 89% of clients overall (up from 87% in 2002-2003) within 30 days.

In 2002-2003, we significantly reduced turnaround times (Figure 17) in dispute processing and, in doing so, met our targets for timeliness in most of our program areas. In 2003-2004, internal targets were set to achieve even shorter processing times. While we did not meet them all, performance seems to have stabilized. For Income Tax files we met or mostly met seven out of 10 targets (three targets were met and four targets were mostly met). For GST/HST/Excise files we met our target.

CPP/EI failed to meet any of its three targets due to an increase in the number of complex cases received, which resulted in a shift in resources to deal with these larger files. Consequently, non-complex inventory continued to grow, resulting in slower processing times for these files. A review of the current redress process for CPP/EI is under way to identify and implement measures to improve timeliness in 2004-2005.

Figure 17 Average Time to Resolve Disputes

To assist us in continuing to meet our performance targets, the new Globus-Case system was brought on line in February 2004 to facilitate more efficient tracking and reporting of dispute and litigation workloads. Increasing management's flexibility in moving workloads to where capacity exists will also improve the utilization of resources.

A review of 2004-2005 performance results will provide us with additional data to determine whether processing times have stabilized. Future objectives will need to continue to balance timeliness and the requirement to produce a quality decision.

We are also continuing with a pilot study of a complexity calculator, which would allow screeners to determine the level of complexity of files and better predict turnaround times and required resources. We expect the calculator to be fully implemented in April 2005.

The number of intakes (new appeals received) went down this year from 75,000 to 64,000, and the number of disposals (cases completed) dropped from 70,000 to 62,000, as detailed in Figure 18.

Figure 18 Dispute Intakes and Disposals (Excluding Pay Equity Files)

An increase in the proportion of complex files received in Income Tax and CPP/EI negatively affected the number of cases resolved.

The reduction in the number of disposals resulted in an increase in workable inventory from 15,132 cases to 17,684. Although inventory increased, we did succeed in minimizing this increase in cases over a year old (Figure 19) and in fact, we slightly decreased the number of cases over 2 years old.

Figure 19 Dispute Inventory by Age – Number of Workable Files

The proportion of our inventory (Figure 20) that is in non-workable status while we await court decisions or other information now stands at 75% (51,771 of our total inventory of 69,455), as compared to 78% for 2002-2003. Over 20,000 of these files relate to the treatment of federal government pay-equity payments, a matter which is before the courts.

Figure 20 Number of Workable and Non-Workable Files in Inventory

The total value of amounts in dispute in non-workable cases is $5.88 billion, which represents nearly 78% of the overall $7.58 billion currently in dispute.

In 2003-2004, Appeals conducted a client survey 2 to measure views on service received throughout the redress process. The survey showed that 60% of respondents were satisfied with the service provided during the redress process. While we scored high in the area of impartiality (67%), time allowed to submit additional information (77%), ease of filing an objection (84%), and courtesy of employees (82%), satisfaction with objection processing times remained constant at 52%.

Fairness is applied across the Agency through the Voluntary Disclosures Program (VDP) and through the application of fairness provisions. The VDP promotes voluntary compliance with the provisions of the laws that the CCRA administers by providing clients with an opportunity to correct past omissions without penalty.

Use of the voluntary disclosures program by the public increased significantly. We completed 21% more cases in 2003-2004, with an estimated $459 million in related assessments—a 65% increase (Figure 21). However, there was a small increase in inventory from 2,706 to 3,006 files.

Figure 21 Voluntary Disclosures Program – Cases Completed and Inventory

With respect to the application of the fairness provisions, sections of the Income Tax Act and other Acts the CCRA administers permit the CCRA to cancel or waive penalties and interest payable by taxpayers who have faced extenuating circumstances.

For 2003-2004, the number of requests from clients processed under the fairness provisions increased 7% to over 68,000 and relief was provided in 65% of the cases, a proportion that is consistent with past years. The value of interest and penalties cancelled or waived increased from $166 million in 2002-2003 to $184 million in 2003-2004.

We also automatically waived $290 million in penalties and interest for over 1.6 million taxpayers. In total, an estimated $475 million was cancelled or waived by the CCRA.

We have instituted agency-wide monitoring, with Appeals as the lead branch, co-ordinating the development of monitoring plans and data for all program areas that are involved with the administration of the fairness provisions. This is the first year that there has been a “roll-up” of monitoring of the fairness provisions across all program areas. The monitoring has confirmed that, in the majority of cases, the existing policy and procedures are being consistently applied across Canada.

Risk management is essential to promoting the consistent and fair resolution of disputes and litigation within a reasonable time. Based on the work of our Quality Assurance Program, we believe that our risk management continues to improve. Using quality assurance officers to monitor the processing of files in field offices, our review of 3,396 files in 2003-2004 showed that we improved the income tax objections and fairness process in areas previously identified as being deficient. We completed and posted a Risk Management Framework on our intranet site for operational usage and identified areas for further improvement in 2004-2005, in order to be consistent with the Branch's risk management policy. We also manage risk through early identification and proposals to the departments of Finance and Justice to address needed clarifications in the laws we administer.

We demonstrated fairness, responsiveness, and cost effectiveness by resolving the overwhelming majority of appeals cases (over 95%) administratively in the Income Tax and GST/HST/Excise Tax program areas. In the CPP/EI program, the administrative resolution rate was 66%. The variance in resolution rates is the result of legislative differences in the administrative redress processes between program areas.

The CCRA attempts to resolve most cases at the administrative level, and we endeavour to proceed to court only under appropriate circumstances. For those cases that could not be resolved administratively, almost 63% of CCRA's original determinations were upheld by the courts. As this result is consistent with our goals, we remain confident in our litigation management approach.

1 See footnote on page 1-53 for further information regarding the CCRA's Annual Survey.

2 As with many opinion poll surveys, there was a low response rate (16%). Therefore, the reader should be aware that potentially the results could be biased in either direction.

Date modified:

2004-10-28