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.

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.

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.