Tax Services

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

To help clients meet their obligations under the law and to foster high levels of voluntary compliance, the CRA continued in 2004-2005 to provide timely, accessible, reliable and fair service and education to its clients. To inform and educate our clients, our services include Internet-based information and transactions; telephone and face-to-face communications; plain language forms, guides and publications; technical interpretations; rulings; and specialized problem resolution services.

Maintain effective communications and implement legislative changes accurately and within required timeframes

Our client services, combined with our partnerships with other government and non-governmental organizations, allow us to provide updated and coordinated information to our clients in a timely and accessible fashion. During 2004-2005, we continued to successfully implement major legislative changes within required timeframes through our rigorous and highly structured annual publications review process. We ensured that any new or changed information and legislation were accurately incorporated in time to meet our critical delivery targets for more than 1,000 tax-related publications--all of which are available on or through our website. Our visually impaired clients can also obtain these publications in alternative formats, including Braille, large print, audio cassette and diskette.

Expand the range of our alternative electronic services

We believe that our clients are more likely to participate in a tax system that is accessible and provides responsive service. We face the ongoing challenge of responding to clients' needs, while at the same time using their tax dollars effectively. One cost-effective measure is to focus our resources on electronic services, which our studies have shown to be, on average, more than 20 times less expensive than in-person services.

Our goal is to encourage clients to choose more affordable access channels, such as TELEFILE and the Internet. To support the move to electronic services over more traditional service options, we continued to move towards assisted self-service in 2004-2005.

The Internet is our primary electronic service channel. In line with our strategy to increase Internet use by clients, this year our home page was redesigned to make it easier to find information. Clients can now get answers to their questions by topic, client type, or through our secure online application, ‘My Account'. We also enhanced the security and protection of confidential client information by requiring clients to register for a Government of Canada epass prior to logging onto ‘My Account'. In addition, we introduced a new feature in November 2004; ‘Change my Return', of which 3,871 returns were changed between November 2004 and March 2005. Clients can also update their address or phone number. These transactions are completed without the help of a CRA agent and without mailing a request. The ‘My Account' application will soon be linked to the Government of Canada website through the ‘My Government Account' service, and our expertise is being shared with other federal departments to allow them to develop similar services.

Improve take-up rate of alternative electronic information services

We implemented a marketing strategy to encourage the use of our website for obtaining information and conducting transactions with the CRA. In 2004-2005, our website registered more than 24 million visits, an increase of 27.6% over the previous year.

Marketing activities were aimed at reaching a greater number of individuals and businesses and further increasing take-up rates for electronic filing. As a result, take-up rates for electronic filing have steadily increased in recent years.

In 2004-2005, we exceeded the target for Internet-filed corporate (T2) returns by 18,416, resulting in 93,416 Internet-filed T2 returns. This represents an increase of more than three times the amount of T2 Internet-filed returns received in 2003-2004. In addition to T2 Internet filing, in the past fiscal year, GST/HST Internet filing doubled; T4 Internet filing rose by 41%; and electronic payments increased by 19%.

Increase participation in electronic filing to 50% of T1 returns by 2004-2005

Participation in electronic filing for individual (T1) returns has grown each year since 2001 (see Figure 2). In 2004-2005, we almost met our target of 50% participation for T1 electronic filing, with more than 800,000 new electronic filers, bringing the total to more than 11.5 million electronic filers for the fiscal year. We achieved a rate of 49.4% for our filing season, up from 47.7% in 2003-2004.

Figure 2 Take-Up of Electronic Filing for Individual Income Tax Returns

Our studies show that approximately 8% of returns cannot be filed electronically because of CRA-imposed exclusions. We continue to pursue initiatives to increase the percentage of individual returns that are filed electronically.

Meet our service standards and internal performance targets

The telephone remains the most popular service channel for client enquiries. Through a toll-free network of call centres, our telephone enquiries services provide clients with a wide range of tax information. We are striving to improve overall client service, as well as balance caller accessibility ¹ and the service level. Under the Government of Canada's Service Improvement Initiative, we implemented a new service standard for all calls answered ² within two minutes (previously an internal target). We met the 80% target set for this service standard, and achieved an 81% result for both general and business enquiries (see Figure 3).

Figure 3 Percentage of Telephone Calls Answered Within Two Minutes ³

During 2004-2005, we achieved our caller accessibility target, attaining 83% for both general and business services. We strive to provide better overall service to our clients by balancing accessibility and timeliness (see Figure 4).

Figure 4 Telephone Caller Accessibility ⁴

A variety of tools help ensure that clients find our services reliable and responsive. One tool is our quality assurance program, which evaluates the reliability of our telephone services. Results for 2004-2005 indicate that agent accuracy remained high in comparison to our benchmark year.

In 2004-2005, four new Tax Services service standards were introduced. To establish an equivalent comparison with last year, we compared our performance against the service standards, excluding the four new standards. The results showed that our performance improved by almost 18 percentage points, to 87.8%, over the previous year. Including the four new service standards, we met or mostly met 89% of all service standards for Tax Services programs this year. We met or mostly met seven of the nine most important service standards, involving high impact or high volume activities, and exceeded our timeliness targets for processing both paper and electronic T1 returns, as well as our target for processing GST/HST returns.

Our commitment to mail out 95% of Statements of Arrears and Statements of Interim Payments on time in accordance with our service standards fell short this year. For Statements of Arrears, we achieved a 63% success rate. For Statements of Interim Payments, the figure was only 49%. We are currently implementing a plan to improve these results.

Assess returns accurately

The primary tool for determining whether we assess returns accurately is our T1 Quality Evaluation Program, which reviews initial assessments of tax returns for individuals for each processing year. Our review for the 2004 processing year found that processing errors with a direct impact on a client's refund or balance due declined to approximately 1%, which demonstrates an improvement over the 1.4% rate found the previous year. Although taxable processing errors that directly impacted a client's refund or balance due were relatively rare, the amounts involved, on average, were significant--typically, $300 to $400 per error; this amount has remained stable over the past six years.

Considering the complexity of tax legislation, it is not surprising that we find errors made by clients on their tax returns. While some client errors could result in additional tax owing ⁵ , others could result in clients paying more tax than required. Our objective is to collect the correct amount of tax. The CRA strives to be fair in all aspects of its activities because we believe that fairness is crucial to maintaining integrity in our tax administration. Under our Beneficial Client Adjustment program in 2004-2005, we refunded over $68 million to more than 343,500 individuals who under-reported at-source tax deductions or Canada Pension Plan contributions on their returns.

Maintain or increase client satisfaction levels

All CRA activities undertaken within this expected result apply to maintaining and increasing client satisfaction levels. In addition, we have a client-focused annual survey to determine first-hand the level of client satisfaction with our services.

The CRA's 2004 Annual Survey puts client satisfaction with the CRA as a whole at 62%, a result similar to that of the previous year ⁶ . Clients' overall satisfaction rating of Tax Services fell slightly, from 70% in 2003-2004 to 67% in 2004-2005. On the other hand, 94% of clients were either somewhat satisfied or very satisfied with the time it took to receive their Notice of Assessment or refund (compared to 88% in 2003-2004). Overall, we have maintained client satisfaction levels.

Continue growth in programs and services administered by the CRA on behalf of the provinces and territories

The CRA is a key service provider for other federal agencies and departments, as well as for Canada's provinces and territories. We administer individual and corporate taxes for most provinces and territories. In 2004-2005, the Government of Canada renewed Tax Collection Agreements with nine provinces and territories. To improve accountabilities with the provinces, we also finalized a new Service Management Framework (SMF) with the Government of Manitoba. This will serve as a model for future SMFs with other provinces and territories, since it is the first to refer to the updated Tax Collection Agreements.

In April 2004, we signed a memorandum of understanding with the Government of British Columbia to establish an integrated business registration system accessible by clients on the Internet. This online business registration system will use the CRA Business Number as a common business identifier. The streamlined registration system reduces the administrative burden on businesses located in British Columbia, and simplifies their interactions with federal and provincial governments.

We worked towards an agreement with the Government of Ontario to implement a single administration for corporate tax, simplifying the filing process and reducing the compliance burden on businesses. We hope to conclude the agreement during 2005-2006.

The trend towards self-government has increased opportunities for greater business relationships with First Nations. During 2004-2005, we supported the Department of Finance Canada in its negotiations with First Nations on establishing new tax administration agreements. Agreements were finalized with nine Yukon First Nations on collecting First Nations GST. The Kluane First Nation also signed a First Nations Personal Income Tax Agreement, joining the eight others that had signed such agreements in previous years. In addition, the Whitecap Dakota First Nation in Saskatchewan became the 10th First Nation to sign an agreement allowing the CRA to collect First Nations tax related to fuel, tobacco and alcoholic beverages sold on reserve.

¹ See ‘Schedule E - Glossary' on page 84 for a definition of “caller accessibility”.

² Answered calls are calls handled by an agent, as well as calls from clients who abandon their call within two minutes of entering the queue.

³ During the six weeks of the fall 2004 labour disruptions with fewer phone lines staffed, we believe that we mostly met these standards. We have excluded these results, because they do not fairly represent the reduced level of service available to Canadians during this period.

⁴ See footnote for Figure 3 Percentage of Telephone Calls Answered Within Two Minutes.

⁵ Results from our matching and related programs that relate to underreporting of income can be found on (see Figure 9).

⁶ The survey is administered by telephone to a national random sample of adult Canadians. For the 2004 CRA Annual Survey, 3,051 interviews were completed across Canada, representing an 11% response rate. The response rate was calculated using the Professional Marketing Research Society's standard format. This response rate is similar to those reported for phone surveys by major private survey research firms in Canada. While the CRA had taken a number of steps in its survey design, there remains the potential for nonresponse bias.

Date modified:

2005-10-26