Category Archives: CVITP

A focus on recent developments in CVITP

Canada Revenue Agency Report Deserves a Failing Grade

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Like all federal government departments and agencies, each year the Canada Revenue Agency (CRA) produces a report for Parliament after the end of the fiscal year.  This report details what the CRA has done with the money Parliament has budgeted for its operations.  This is the only report that parliamentarians and the Canadian public will see that shows what the CRA has done in the last fiscal year to meet its mandate.

This year is no different.  On December 7, 2020, the CRA published online its Departmental Results Report for fiscal year 2019-2020.  In this article, we review what the CRA has to say in the report about the results it is getting with the CVITP and its work on encouraging previous non-filers to file a return in order to access benefits to which they are entitled.  We show that there is remarkably little information.

Although the CVITP was created in 1971, fifty years later it remains next to impossible to tell what the CVITP has achieved in relation to its objective of assisting individuals and families of low and modest incomes to submit their returns and thereby become eligible for a number of benefits and credits introduced by federal, provincial and territorial legislatures aimed at reducing poverty.  The little information that is included suggests a massive failure this year; yet, there is no analysis showing the implications of this failure and how the CRA plans to avoid a similar result in the forthcoming tax season.

This is especially disappointing given that the federal government’s 2018 Poverty Reduction Strategy highlighted the role that the CVITP is supposed to be playing in contributing to reducing poverty across Canada.  We conclude with an observation: if the rest of the information contained in the CRA’s report is anything like what the CRA has included for the CVITP and its non-filer initiative, then Canadians should be seriously concerned about the bases on which parliamentarians are making decisions allocating billions of dollars from the federal budget to finance the CRA’s annual operations.

Getting Good Results

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In this series of articles, we begin by reviewing the purpose of the CVITP. While the Canada Revenue Agency publications do not give a formal purpose, we look through recent government references to the CVITP and suggest that its purpose is to help individuals on modest and low incomes, and especially vulnerable individuals, to file their income tax and benefit returns.

We then ask whether or not the CVITP is achieving this purpose.  We conclude that the information provided in the Canada Revenue Agency’s current results framework for the CVITP is not useful because it does not tell us if the program is serving the intended population.  Furthermore, the results the Canada Revenue Agency reports on, based on this framework, do not enable us to know if recent budget increases for the CVITP are helping it to reach a greater proportion of its intended population.

To address these weaknesses, we propose an alternate results framework for the CVITP.  We believe it holds more promise for providing the Canada Revenue Agency with results data which will allow for more strategic decision-making, better ensuring the CVITP lives up to its stated intention.

Client or Volunteer Error? Promoting Learning and Improving Service Quality

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Volunteers make mistakes in filling out client returns. After all, to err is human. Here is what the Canada Revenue Agency could be doing to promote learning among its volunteers while improving CVITP service quality. At the same time, it would demonstrate a commitment to further protecting the integrity and reputation of the CVITP which encompasses its host organizations and volunteers.

Supporting Host Organizations Better

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The federal government’s Poverty Reduction Strategy identifies the CVITP as one of its programs that contributes to achieving its goal of reducing poverty in Canada.  This is because the annual income tax and benefit return processed by the CVITP serves as the basis for establishing eligibility for and maintaining access to many federal and provincial/territorial benefits and credits, some of which are income-tested. 

Set up by the Canada Revenue Agency (CRA), the CVITP is a free return preparation and filing service offered, in 2019, by over 3,500 host organizations to some 741,000 low and modest-income individuals filing 835,216 returns with the assistance of over 19,000 volunteers.  Yet the CRA provides no financial support to assist host organizations with any of the costs they incur to make this possible.  Instead, it encourages host organizations to do their own independent fundraising.  This has not proven to be a successful nor sustainable solution.

To maintain and improve CVITP services, the CRA should be providing direct financial support to host organizations.  It should also spin off some of the CVITP related services it currently provides to an independent not-for-profit unit, financed through a service contract with the CRA.  This independent unit could provide these as well as other new CVITP related services not presently available to host organizations.

This proposed arrangement is in keeping with current federal government practice wherein federal services to the public delivered by independent parties receive some financial support.  In the absence of such a change, host organizations will continue to struggle to maintain the current level of service and will not be positioned to improve their CVITP services in line with CRA expectations.  Furthermore, the entire CVITP operation will remain at risk, as was evidenced this year when COVID related public health restrictions temporarily shut them down and willing host organizations moved to more labour intense “virtual clinics”.

Read here to learn more about the difficult conditions in which host organizations currently operate and why this severely limits the potential of the CVITP, one form that CRA financial support to host organizations could take, and why there is also the need for an independent unit as well as what it could be do to help fulfill the potential of the CVITP.

How well are your CVITP clinics targeted to clients who need this service the most?

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For many CVITP host organizations, the demand for free clinic services exceeds the supply of volunteer time available to prepare returns.  The income ceilings suggested by the Canada Revenue Agency (CRA) are an established way of limiting access to this free service.  This article compares the income ceilings suggested by CVITP with the incomes that make up poverty lines and finds that, with a few exceptions, the former are generally greater than the latter.  Host organizations which want to target their services to those who need it the most may wish to use income ceilings that are more closely aligned with the poverty lines for their region.

To learn more, you can read the full article here.

A Primer on Canada’s Official Poverty Line and Why It Matters to the CVITP

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Canada’s Poverty Reduction Strategy gives time-bound targets for making progress in reducing poverty linked to one indicator.  This suggests that the federal government can be held accountable for its efforts in achieving these time-bound targets.  The indicator it uses is an official poverty line.  The official poverty line is a uniquely income-based concept.  The targets are as follows:

– By 2020, the poverty rate will be reduced by 20% from its 2015 level, and

– By 2030, the poverty rate will be reduced by 50% from its 2015 level (aligned with the United Nations Sustainable Development Goals)

In other words, the official poverty line can be used to calculate the poverty rate: the percentage of the population with an annual income lying below this line at a particular point in time forms the poverty rate.

In an article entitled A Primer on Canada’s Official Poverty Line and Why It Matters to the CVITP, we explore what the official poverty line is and how it is used to determine poverty rates.  In the conclusion, we draw the CVITP’s connection with this official poverty line.  As you will see, the income tax and benefit returns processed by the CVITP play a crucial role in helping to raise clients’ incomes relative to the official poverty line.

The Evolution of the CVITP

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In a series of articles, we trace the evolution of the CVITP, using information from Canada Revenue Agency (CRA) reports and plans for Parliament. Our articles tell you about the clients served by the CVITP tax clinics, the returns that have been filed at the these clinics, the CVITP volunteers who have helped clients to file their returns and the organizations which have hosted CVITP tax clinics.

Learn why we reach the conclusion that “the CRA’s reporting on the CVITP has been weak to date and gives Parliament too little information.”

Interested? Start with the introduction to “The Evolution of the CVITP”.