Collecting and Analyzing Data to Improve Service and Demonstrate Impact

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When personal information is stripped from client returns and the remaining information is aggregated, a host organization can make at least two uses of the ensuing data.  It can use the demographic and economic data to learn more about the population currently served and to improve targeting efforts in the design of future tax clinics.  The host organization can also use data on the benefits and credits generated for clients to demonstrate to its various stakeholders the impact of the current CVITP service on their clients’ financial situations.

Annually, the Canada Revenue Agency (CRA) strips the personal information from returns and provides the demographic and economic data to Statistics Canada for publication.  Infrequently, the CRA has also aggregated the data from returns on benefits and credits at the national and provincial levels and shared the figures publicly.  Given the advent of the CVITP Organization Identification Number or COIN in 2021, it is now technically feasible for the CRA to do all this for each individual host organization as well.

There are two reasons why we believe it is in the CRA’s own interest to do this.  First, by providing data to individual host organizations on the benefits and credits generated by their CVITP clinics for their clients, the CRA would be helping them to make the case to donors.  Increased donor funding would alleviate a serious resource constraint for many host organizations.  In turn, this could reduce some of the pressure on the CRA to provide funding while, at the same time, increase client access to CVITP services.

Second, by obtaining demographic and economic data on the clients served by its CVITP service, the host organization can learn more about the population currently benefiting from its CVITP service.  Where there is a mismatch between this data and the population the host organization wishes to serve, this information can be used to help better target CVITP services in the next tax season.  In turn, this could increase access to CVITP services by clients who need these the most.

In both instances, the provision of data to host organizations could help the CRA to better contribute to meeting the objectives of the federal government’s Poverty Reduction Strategy (PRS).

Quite apart from doing this to fulfill its obligation to support the government’s PRS, we believe the CRA has an obligation, as a good partner, to provide its host organizations with their data.  Currently, most host organizations offer CVITP clinics with little or no support from the CRA.  Providing this data would be one of the most important contributions the CRA could make to help its host organizations.

Although the CRA does not presently do this, some host organizations are collecting and analyzing client data from their CVITP clinics.   However, most are not.  This article explores five challenges host organizations face in doing this:

  • A lack of interest or understanding within the host organization about the importance of this data
  • Addressing client consent considerations
  • Handling client privacy issues
  • Finding staff or volunteer time to collect the data
  • Finding the expertise to analyze the data

Our experience is that host organizations mandated to promote their clients’ financial empowerment are the most successful at present in addressing these challenges.  As they already receive donor funding in support of this mandate, they are well positioned to tackle these challenges.

On the other hand, most host organizations providing CVITP services do not have clients’ financial empowerment as part of their core mandate.  Thus, they probably do not receive donor funding specifically to support their CVITP services.

One final reflection: our article addresses the use of anonymized data found in client returns.  To improve on the delivery of their CVITP services, host organizations also need to find ways to get data on non-filers within their potential client base.

The Evolution of the CVITP – 2021 Final Edition

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This is a follow up to our early edition on the evolution of the CVITP in 2021.  We consider the CRA’s annual Departmental Results Report the gold standard for CRA reporting because the report is submitted to Parliament.  Even then, data on all four elements – clients, returns, volunteers and host organizations – is hard to come by.  It is growing increasingly difficult for Parliament, the public and the host organizations and volunteers directly involved in making the CVITP a reality to know what’s happening.

In our article, we briefly discuss the numbers and their sources.  We show that the number of clients served rebounded by 43% from the spectacular low of the 2020 tax season.  (Remember: that was the season when host organizations had to stop offering in-person CVITP clinics due to the COVID health restrictions.)  Nevertheless, the number of clients served was still well below the peak achieved during the 2019 tax season.  As the CRA did not report consistently on the number of returns filed, we can only assume that it was greater than the number of clients served.  But we don’t know by how much.

Although the CRA did not report formally on the number of volunteers, we find a number in a statement by the Minister of National Revenue which suggests it declined substantially from the number reported for the 2020 tax season.  The number reported for host organizations represents a spectacular decline from the 2020 tax season.  We note that the numbers provided by the CRA for volunteers and host organizations in the 2020 tax season are misleading in that they likely included those registered with the CRA at the beginning of the season rather than those who were able to adapt to CVITP virtual clinics.  Furthermore, the 2021 figure for volunteers is simply too high to be credible.  In any event, the declines in the number of volunteers and of host organizations over the 2020 and 2021 tax seasons is deeply troubling.

Implementation of CRA’s Pilot Grant Program in Year 1 of 3 – A Slow Start to Missing the Mark

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In 2021, the Canada Revenue Agency (CRA) introduced a new pilot grant program that provides financial support to some CVITP host organizations.  When it was introduced, we had a lot to say about it here.

The pilot program has completed the first of its three years.  As is unfortunately typical of the CRA in its reporting on the CVITP, there is a dearth of information on the first year of this pilot.  However, there is one important piece of information cited in the CRA’s Departmental Plan for the 2022-23 fiscal year: “In the first year alone, the CRA sent just under one million dollars to qualifying organizations across Canada to support their efforts to ensure that vulnerable people have the ability to file tax returns and access the benefits and credits designed to support them.”

Remember: the budget for this three-year pilot grant program is $10 million; this amounts to an average of $3.3 million being available each year to support host organizations.  Disbursing less than $1 million in the first of the three years raises serious question about the ability of the pilot grant program to meet its stated objectives: defraying organizations’ costs of hosting CVITP clinics and encouraging more organizations to host CVITP clinics.

In the following article, we show that it has budgeted too much for this pilot or, on the basis of the current budget, it is simply too stingy with the current payments to meet its goals.  We predict that the pilot program will complete its three years well under budget.  There are two design elements we stated when the pilot program was first launched which are likely to contribute to this outcome: administrative arrangements that are burdensome, deterring some host organizations from applying for the grant, combined with grant amount limits that are too low to serve as an incentive for host organizations.

We note that the indicators the CRA has said it will use to determine the success of the pilot are likely to yield misleading conclusions.  This is because the implementation of the pilot program coincides with the period immediately following COVID, when the numbers for the CVITP had plummeted and thus could be expected to rebound anyways.

We also believe that the indicators the CRA is using are the wrong ones as none of them gets at the real purpose of the CVITP.  As noted in one of our articles assessing the pilot program when it was first launched, at its core the CVITP is about the income levels of the clients it serves.  Therefore, the pilot program should aim to increase the number of returns filed by a host organization for clients whose incomes fall at or below the poverty line, not simply the number of returns filed nor, for that matter, host organizations and volunteers enlisted in the CVITP.  Until the CRA draws a closer link between its CVITP and the objectives contained in the federal government’s Poverty Reduction Strategy, it will continue to miss the mark with opportunities like its pilot grant program.

Ambivalent Administrator: a Contradiction in the CRA’s Relationship with the CVITP

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Contradiction

Canadian residents with taxable income have a legal obligation to file a return.  But Canadian residents with no taxable income have no legal obligation to file a return.  What does the CRA do in the latter case, when a resident with no taxable income does not file a return and thus loses access to benefits that are contingent upon filing a return?

We believe the federal government has an expectation that the CRA will not be passive but will actively encourage residents to file.  This is because the federal government has identified so many of the benefits contingent upon filing a return as key to achieving the objectives identified in its Poverty Reduction Strategy.  And, as the federal government’s administrator of its system for filing returns, the CRA is the gatekeeper for gaining and retaining access to so many of these benefits.

The CRA’s current actions with respect to the CVITP suggest it has a highly ambivalent attitude toward the CVITP, its main program for assisting low-income residents to file their returns.  Why do we say this?

For two reasons.  First, we believe the CRA has adopted two approaches which, taken together, are contradictory.

On the one hand, the CRA has repeatedly stated the importance of maintain what it calls an arms-length relationship with CVITP host organizations (see 4 in diagram above) and their volunteers (see 5 in diagram).  For example, on page 41 of the 2020 report on the CVITP by the Taxpayers’ Ombudsman, the CRA states that it: “…strives to provide as much support as possible to the volunteers and partner organizations, while maintaining the arms-length relationship required to mitigate the liability risks that would be associated with any prescribed involvement in tax return preparation by the CRA.” 

Yet it is unclear what exactly the CRA means by an “arms-length relationship” in the CVITP context.  The CRA says it needs to maintain some distance from – or, to word it another way, not work too closely with – host organizations and their volunteers to mitigate any risks the CRA might run as a result of the returns these partners prepare for clients.

On the other hand, the CRA clearly states on its website that it is prepared to do the returns of those residents with a modest income and a simple tax situation who have used a free tax clinic before or are eligible to use one (see 1 in diagram). 

The CRA’s willingness to do the returns of low-income people and accept the risks this entails is puzzling.  It seems to contradict the CRA’s own argument about the need to mitigate for the liability risks associated with its involvement in the CVITP return preparation process by maintaining some distance from its partners.

Second, the main rationale for the CVITP is to help low-income people access benefits and credits to which they are entitled, not to pay income tax as most CVITP clients do not owe income tax.  Nevertheless, in the four years since the federal government’s publication of its Poverty Reduction Strategy (PRS), the CRA has never once publicly acknowledged the link the federal government has established between the CVITP and the PRS’s goals.

Events over the last three years should shake the CRA of its ambivalence.  Just as the CRA has seen its budget for the CVITP quadrupled with the aim of doubling its client numbers, it saw those numbers dip by a third from their peak.  If the CVITP is to be turned around, the CRA must get off the fence and take more initiative.

In the following article, we provide more details on all of this and options for the administration of the CVITP.

The Evolution of the CVITP – 2021 Early Edition

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CVITP figures for the number of people assisted this year and the number of volunteers registered show a second year of poor performance, well below its peak for the 2018 tax year (2019 tax season).  The poor performance last year was not surprising given the sudden imposition of public health restrictions due to COVID.

In the lead up to the 2021 tax season (2020 tax year), the Canada Revenue Agency (CRA) had ample time to plan for the operation of the CVITP under public health restrictions.  However, the CVITP’s performance this year was only marginally better than last year.  This is despite the CRA having been allocated in recent years a large administrative budget increase for the CVITP that was intended to double the number of people assisted.

What’s going on here?  We may never know the full story.  Earlier this year, the CRA indicated it will not be providing any information on the CVITP in its future reports to Parliament.  The timing of this decision may be purely coincidental.  But one can be forgiven for thinking that the CRA’s recent poor performance on managing the CVITP might have had something to do with it.

For further analysis with numbers and our sources, see our short article here.

Do you have what it takes to be a volunteer tax preparer?

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We are pleased to offer you the first article prepared by a fellow CVITP volunteer.  Alan Pearson has written a short article “for people who are considering volunteering with the CVITP and for agencies who are thinking of hosting a clinic.”  He identifies two areas where volunteers need skills, one technical and the other inter-personal.  He briefly describes what the specific skills are in each of these two areas.  Reader reactions to Alan’s article are also welcome.

We encourage volunteers and host organizations to submit articles on any topic related to the CVITP.  Simply use the “Contact Us” page to connect with us.  We do not have to agree with the views expressed by our contributors: we welcome and will publish different perspectives on CVITP issues.

CRA Data and Analysis Suggestions for a More Effective CVITP Strategy

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As mentioned in a previous article, one priority in her Supplementary Mandate Letter from the Prime Minister (dated January 2021) instructs the Minister of National Revenue to “enhance and expand the Community Volunteer Income Tax Program”.  One thing the Canada Revenue Agency (CRA) can do to help achieve this is through placing greater emphasis on another priority mentioned in the same letter, instructing Minister Lebouthillier to “improve the collection and analysis of disaggregated data related to supports and services offered by the CRA.”

Data needs to be collected and analyzed for at least two reasons.  First, to confirm whether or not the CVITP is meeting its intended objective.  And second, where the CVITP is falling short of its intended objective, to help devise strategies to ensure the program can better meet its intended objective.

We think the Canada Revenue Agency (CRA) currently has two related problems with respect to CVITP data.  First, it collects the wrong data and publishes too little of what it does collect.  Second, this means the CRA focuses on doing the wrong things.

In this two-part series of articles, we look at data and its use in formulating strategy.

In the first article, entitled “First, the CRA Needs to Collect and Analyze the CORRECT Data”, we examine the data that is collected and analyzed on clients and their returns.  We begin with the uncontroversial observation that data needs to be collected and analysed to confirm whether or not the CVITP is meeting its intended objective.  We then refer to a previous article in which we argued that the CRA presently collects and reports CVITP results data which are not aligned with the purpose and in which we offered alternative performance indicators which we believe do a better job of this.  We also look at the data the CRA currently collects on CVITP host organizations and volunteers – what we call the delivery infrastructure – and make some modest suggestions for additional data to be collected through the annual registration process just prior to the tax season.

In the second article, entitled “Then, the CRA Needs to Build a Strategy With a Focus on Improving EFFICIENCY”, we look at how all this data can be used to devise strategies to ensure the CVITP can better meet its intended objective.  The combination of analyses of data on CVITP results and delivery infrastructure can help to inform the choice of actions to be taken.  The strategic priority we focus on is increasing the number of CVITP clients.  We argue that the CRA should place greater emphasis on increasing efficiencies within the existing delivery infrastructure over increasing the size of the delivery infrastructure.  A few examples are offered to illustrate how data on results and delivery infrastructure could be used to do this.

CRA’s Newly Minted COIN: A Welcome Innovation

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This year, the Canada Revenue Agency (CRA) introduced an innovation into the CVITP.  Every host organization will be issued with a unique CVITP Organization Identification Number or COIN for the duration of its participation in the CVITP (i.e. it will remain the same from year to year).  In this article, we explain briefly why the CRA introduced the COIN and how it works.  We also identify a function for the COIN which the CRA has not yet stated but which we believe will be really important for helping to make strategic decisions about the future shape of the CVITP.

Post Tax Season Review: Initial Impressions from the CVITP Frontlines

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With the close of the tax filing season, we did an informal survey of some of our fellow CVITP volunteers, to get their first impressions of how the tax season went.  This included both new as well as returning volunteers.  This article contains a summary of their impressions as well as a few of our own.  We welcome hearing more about some of the lessons you have drawn from your own experience of the tax filing season.

Missing in Action: No Future CRA Reporting on CVITP Results

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The Canada Revenue Agency (CRA) recently released its Departmental Plan for the forthcoming fiscal year.  Since 2012, the CRA has reported to Parliament on the results obtained by the CVITP.  With the introduction of results-based performance reporting across all federal departments and agencies in 2017, the CRA has included the CVITP results within its performance indicators.

However, the new Departmental Plan has dropped any formal reporting on the CVITP; this means no data will be included on CVITP performance targets or results achieved.  Therefore, no information will be systematically made available to Parliamentarians, the public or even the CVITP host organizations and their volunteers.

In this article, we give four reasons why this is a problem:

  1. any evidence on the linkage between the CVITP and the federal government’s Poverty Reduction Strategy will be lost;
  2. Parliament will be unable to exercise any oversight over the CVITP budget increases it approved;
  3. it calls into doubt the Minister of National Revenue’s commitment to a priority identified only three months earlier by the Prime Minister; and
  4. CVITP host organizations and their volunteers who do the bulk of the CVITP work for the CRA using their own resources will now be kept in the dark as to the results of their efforts.

This is a strange way to mark the 50th anniversary of the CVITP.

PM’s Mandate Letters for Minister of National Revenue: Does the CRA “Walk the Talk” on the CVITP?

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We already know that the federal government identified the CVITP as an initiative contributing to achieving the objectives of its 2018 Poverty Reduction Strategy.  But how can one tell just how important the CVITP is currently to the government?  One way is to consult the Mandate Letter that the Prime Minister sends to the Honourable Diane Lebouthillier, the Minister for National Revenue responsible for the Canada Revenue Agency.  This letter gets issued following the Speech from the Throne and highlights the current government’s priorities.  This article highlights a few of the priorities in the Minister’s December 2019 Mandate Letter and her January 2021 Supplementary Mandate Letter which are relevant to the CVITP.  And it briefly looks at how well the Canada Revenue Agency is doing at delivering on these priorities.  The results are not promising.

Coming soon…

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With the regular tax season drawing to a close, we are planning to return to producing articles on a range of CVITP related topics that we hope will be of interest to you.  For example, in the coming weeks, look for the following articles:

  • Tax Season Post Mortem: initial impressions from the CVITP frontlines
  • CRA Minister’s Mandate Letters and the CVITP
  • CRA Ombudsman’s Report and Recommendations for Improving the CVITP
  • Case Study: lessons from filing for refugee claimants
  • CRA’s newly minted COIN (CVITP Organization Identification Number)
  • Missing in Action: CVITP and the CRA’s Departmental Plan for the 2021-22 fiscal year
  • A CRA Data Wish List for Improving the CVITP

Furthermore, we have many other article ideas planned, including:

  • Case Study: lessons from filing for workers in the gig economy
  • Implications of the Federal Government’s Budget 2021 for CVITP Clients
  • CRA’s Partnership With Host Organizations: shortcomings & opportunities
  • CRA’s Partnership With Volunteers: shortcomings & opportunities
  • Alternative Income Ceilings for CVITP Tax Clinics
  • CVITP Volunteers as Freelancers?
  • Lost in Translation: CRA Communications With CVITP Clients

If you have an article idea you would like to suggest, we’d love to hear from you.  And if you have an article you would like us to publish on a topic you think would be of interest to our readers, please do let us know.

So make sure to visit this site regularly in the coming weeks for informative analysis and ideas on the CVITP and its link to poverty reduction.

CVITP Volunteers At Work

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Like many of our readers, we are CVITP volunteers.  During the months of March and April, we turn our attention to helping clients with the preparation of their income tax and benefit returns.  Consequently, we will be posting fewer articles during the tax season.  We expect to be back posting more articles starting in May.