The Canada Revenue Agency’s (CRA) pilot project was announced at the beginning of 2021, after the disastrous performance of the CVITP in 2020.  This was the first time the CRA offered financial support to community-based organizations hosting CVITP clinics.  It has now run for four years and is completing its fifth year in the fall of 2025.   This is a three-part series of articles, examining the project to date and what lies ahead.

1The first part, “The Evidence”, assesses the performance of the pilot project after four years (2021-2024) of implementation.  I conclude that the project has failed to meet its most important objective (and the only one for which public information is available) and that the project is a failure which the fifth and final year will be unable to rectify.

This article also offers new financial information that is quite different from what the CRA has previously reported for 2021-2023.  Together with the budget announced for 2024, it demonstrates that the pilot project has proved to be more expensive than originally planned.

2The second article, “Why Did This Happen?”, provides three reasons – the financing formula changed in an untimely way, the financing formula was not generous enough, and the assumption that financing was the main constraint to expansion was dubious – why the pilot project has been a costly failure. 

Given these considerations were known to the CRA toward the end of 2023, the third year of the original pilot, this article speculates as to why the project was extended for a fourth year.

3The third article, “What Next?”, looks at 2025, the fifth year of the pilot project as it has been extended for a second time, and beyond.  It gives different reasons for the second extension of the pilot project.

Finally, this article gives four arguments – failure of the project to achieve its most important objective, the project’s cost, the government’s current budget saving exercise and the priority it attaches to automatic tax filing – why the pilot project is unlikely to be extended yet again, for a sixth year.

Over the last three years, we’ve visited CVITP host organizations in six cities spanning five provinces.  At the risk of overgeneralizing, we see broadly two types of host organizations.  They have different objectives which lead to very different practices and sustainability in providing CVITP services.  One of the two organizations is more common and serves most of the CVITP’s clients across Canada.  Yet it is the weaker of the two types of host organizations.  If the Canada Revenue Agency (CRA) wants to expand the CVITP, the current situation presents it with some big operational challenges.

In this article, we outline the main features distinguishing the two types of organizations, show why these differences severely limit the CVITP’s potential for expansion, and suggest some ways in which the CRA could constructively meet this challenge.  Find out which of the two types of organizations yours is most alike, see if there are any defining characteristics we’ve missed, and let us know if you agree with our reasoning that this presents a problem for the CRA as well as with our proposed solution for building on these differences to the CVITP’s advantage.

This article looks at the implementation in the second year (2022) of the Canada Revenue Agency’s (CRA) three-year pilot grant project in support of CVITP host organizations.  (We reviewed the first year of implementation in 2021 here.)

The first part of this article looks at the second year of funding.  Increases to the grant amounts on offer were announced late in the calendar year, after all the second-year implementation of this pilot project was finished.  These increases were probably a response to the very low grant payments for the first year of operation.  But while the CRA’s stated objectives for the program suggest the funding is intended to serve as incentive for host organizations to ramp up their services, the timing of the announcement was strange as it would have no effect on the results obtained in the second year.  According to the CRA, 1,067 host organizations had applied for grant funding in the second year and the CRA anticipated disbursing $2.4 million (up from just over $900,000 in the first year).

The second part of the article looks at the results obtained in the second year and compares these with results from the first year.  In doing this, use is made of the objectives and performance targets the CRA identified for this pilot grant program:

1. While the first objective is to cover some of the participating (host) organizations’ administrative costs, no performance measure is given.  That said, it is strange for an element of the project design to be a stated objective of the pilot project.
2. Whereas the number of participating organizations was expected to grow by 5% per year, between 2021 and 2022 the number grew by 692%.  However, as we observed when the grant program was launched over two years ago, the CRA will have difficulty disaggregating the rebound in the numbers due to the pilot project from a return to normal after the deleterious effects of COVID in 2020 and, to a lesser extent, in 2021 as well as the natural growth in the numbers that the program has previously known.
3. Although increased retention of participating organizations is a stated objective and a performance measure is given, the CRA publishes no data which allow this to be assessed.
4. Expansion in the reach of participating organizations is listed as another objective.  But no performance measure is given so this cannot be assessed.
5. Expansion to vulnerable population segments is also listed as another objective.  But, again, no performance measure is given so this cannot be assessed.
6. Even though it is not a stated objective, the CRA identifies an increase in the number of volunteers associated with grant recipient organizations as a performance measure.  As the CRA does not distinguish in its published data between host organizations which are grant recipients and those which are not, this cannot be assessed.
7. The CRA also identifies an increase in the number of returns filed by grant recipient organizations as a performance measure.  However, this too cannot be assessed because the CRA does not distinguish in its published data between host organizations which are grant recipients and those which are not.  Surprisingly, the growth in returns filed is not a stated objective.  Yet a simple measure of success could be whether more individuals get served and, by extension, more returns get filed.

When the project was first launched, we wrote that the pilot grants needed to be targeted differently for the CVITP to better contribute to the poverty reduction objectives set out in the federal government’s 2018 Poverty Reduction Strategy.

In the intervening years, the federal government has further increased its use of the income tax and benefit return (for example, with the one-time top up to the Canada Housing Benefit, the Canada Dental Benefit and the grocery rebate) to achieve its income security and poverty reduction goals.  This has only reinforced our conviction that, upon completion of the pilot, the CRA needs to rethink the design of this program (and not just make the funding permanent and more generous) if it wants the CVITP to improve its contribution to reducing poverty in Canada.