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.
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.
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.
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.
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:
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.
In case you missed it, back in May 2020 the Canada Revenue Agency’s (CRA) Ombudsman released a detailed report examining the CVITP. The report concluded with 15 recommendations for expanding and enhancing the CVITP. In this brief article, we give two reasons why we think anyone with a strong interest in the CVITP should look at this report.
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.
As we reported here, in the 2020 tax season the CVITP served only 55% of the clients it had served in the previous year. The Canada Revenue Agency (CRA) attributes the dramatic decline to the public health restrictions introduced in 2020 to deal with COVID.
In preparing for the forthcoming tax season, the CVITP tax clinics will be subject to similar COVID related public health restrictions. Furthermore, as of now, the CRA has given no indication that it will change the traditional filing deadline of April 30th to ensure the continuity beyond June 2021 of the many benefits which are conditional upon filing an up-to-date return. Significant changes in practices and procedures are needed to avoid an outcome similar to last year’s.
What can be learned from the experience last year which can be applied to this year’s tax season and to future years when the public health restrictions are no longer an issue?
This article identifies 16 lessons. We also invite our readers to share additional lessons drawing on their own experiences.
The Canada Revenue Agency (CRA) recently announced that it will, for the first time, be providing financial support to host organizations that run CVITP clinics. As the CRA has previously denied that it could provide such support, this is an important change. And in principle, it is one that we support.
However, the current pilot project, which offers $3.3 million a year over the next three years, is poorly designed, with no targeting (not in line with the purpose of the program), insufficient financing (unlikely to provide the intended incentive effects), and an administrative process that is burdensome (not exploiting the flexibilities available with the use of grant funding).
Recognizing that this three-year pilot project has yet to begin its first year of implementation, we make some suggested changes that we believe will significantly improve its impact. We propose that the CRA:
Target its grant funding to ensure host organizations are providing support to those who need it the most;
Make the client income level a criterion, using the poverty line as the threshold;
Set a minimum percentage for a host organization’s client returns that must meet or fall below the poverty line to qualify for any grant funding;
Offer a larger financial incentive for returns filed by clients who had previously not filed for a number of years;
Establish and publicize the minimum percentage and the size of the financial incentive at the outset of the grant funding period;
Significantly increase the funding level per eligible return to provide for something approaching a real incentive;
Use the annual registration process for the approval of host organizations to collect all of the information required to assess the host organization’s eligibility for grant funding; and
Use the annual registration process for the approval of host organizations to notify eligible host organizations of the funding formula it will use to determine the amount of grant funding they could receive at the end of the eligible activity period.
We conclude this four-part series of short articles offering some thoughts on the challenges the CRA will face in assessing the impact of this pilot project. Given the difficulty in surmounting these challenges, there is a risk that any growth in the numbers will be claimed as demonstrating the success of the pilot and used to justify maintaining this project with poor targeting, insufficient financial resources and cumbersome administrative arrangements.
The Minister of National Revenue, the Honorable Diane Lebouthillier, is responsible for the Canada Revenue Agency (CRA). We recently wrote to her to express our concern about the forthcoming tax season. Without significant changes from the procedures and practices adopted in 2020 for the 2019 tax year, we worry that the CVITP experience this year will not be materially different from that of last year when CVITP operations were severely disrupted by COVID and many fewer clients were served than in recent years.
CVITP clinics will be operating under the same COVID related public health restrictions as in 2020. Furthermore, as of now the CRA has given no indication that it will change the traditional filing deadline of April 30th to ensure the continuity beyond June 2021 of the many benefits which are conditional upon filing an up-to-date return.
In light of this, we make a number of suggestions. Read our letter to the Minister here.
We find two sources of 2020 data from Canada Revenue Agency (CRA) publications that allow us to update CVITP trends on the numbers of individuals assisted, returns filed, volunteers employed and host organizations offering free tax clinics.
In this article, we show and briefly discuss: (1) the dramatic decline in individuals assisted; (2) the continuing modest upward trend in the average number of returns filed per client; (3) a modest decline in the number of volunteers registered, which may mask a collapse in the number of volunteers who were actually employed in providing services in virtual clinics; (4) a modest increase in the number of host organizations registered which may similarly mask a collapse in the number of host organizations which actually offered services through virtual clinics; and (5) a continued decline in the average number of volunteers employed per host organization. This last trend may be an early sign of future capacity constraints within the CVITP.
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.
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.
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.
