The Canada Revenue Agency provides little data on the CVITP
Our reviews of the evolution of CVITP clients, returns, volunteers and host organizations have shown that the Canada Revenue Agency’s reporting on the numbers has been sparse. Only the number for returns filed has been consistently reported for each tax year since 2012.
We stated in the introduction to this series of articles that for a program which has existed in one form or another since 1971, it is surprising to find so little solid information available, even in recent years, on its evolution. This is because, until recently, the Canada Revenue Agency (CRA) had not made any formal commitment to providing information on the CVITP.
It is only recently that the CRA committed to providing data on the CVITP
The 2012 tax year was the first time that the CRA reported on the CVITP in its annual report. At that time, it gave only the number of returns filed. However, it was only starting with the 2017 Tax Year that the CRA introduced any performance indicator for the CVITP as part of a broader government effort launched in 2016 to have departments report annually on the results they achieve which contribute to their mandates.
Like all government departments, the CRA is subject to the policy established by the Treasury Board Secretariat of the Government of Canada on results. This means that the CRA is to:
– be clear as to what it is trying to achieve and how it assesses success;
– measure and evaluate its performance, using the resulting information to manage and improve programs, policies and services;
– allocate resources based on performance to optimize results; and
– give Parliamentarians and the public transparent, clear and useful information on the results that it has achieved and the resources used to do so.
Within this context, the CRA must establish a Departmental Results Framework that sets out the CRA’s core responsibilities, results and result indicators.
The CRA’s Departmental Plan for fiscal year 20/21 identifies two core responsibilities with concomitant results:
– Tax: Canadians voluntarily comply with their tax obligations, non‑compliance is addressed, and Canadians have trust in the CRA.
– Benefits: Canadians receive their rightful benefits in a timely manner.
The specific results measured and reported on for these two core responsibilities include performance indicators (what is to be measured) and targets (used to determine how well it is performing).
The CVITP appeared in the CRA’s results framework starting with its Departmental Plan for fiscal year 17/18 which covered the intended results for the 2017 tax year. The CVITP is covered by one performance indicator and associated target. It falls within the CRA’s performance results for delivering on its core tax responsibilities rather than those for benefits.
The CRA’s results reporting says next to nothing about the CVITP’s performance
Here’s how the CRA has reported to Parliament and the public on its plans and end-of-year results in managing the CVITP.
| Tax Year | Performance indicator | target | results achieved |
|---|---|---|---|
| 2017 | Number of CVITP returns completed | 800,000 | 736,606 |
| 2018 | Number of CVITP returns completed | 800,000 | 835,216 |
| 2019 | Number of individuals helped by the CVITP | 802,000 | – |
| 2020 | Number of individuals helped by the CVITP | 873,000 | – |
These few numbers need some explanations.
2017 Tax Year: The performance indicator was qualified in that it said the 800,000 target noted in the table above should be achieved by March 31, 2018, which was right in the middle of the tax season with barely half of the returns submitted. However, when the CRA did report on the result achieved in its Departmental Results Report for the 17/18 fiscal year, it also qualified this in a footnote, saying that “had CVITP used the old reporting method, they would have reported 793,176 returns completed, or 99% of the target [800,000].” No explanation was given as to what the “old reporting method” was. As the CRA had been reporting on the number of CVITP returns completed in the 2016 Tax Year (768,349), we know that the 2017 results achieved (786,606) represented a 2.4% growth on the previous year.
2018 Tax Year: The modest result achieved overall for the 2017 Tax Year where it missed its target of 800,000 (as noted in the table above) might explain why the CRA chose the same target for 2018. Achieving this target (800,000) would have meant a growth of 1.7% over 2017 (786,606). Not surprisingly, the 1.7% growth target was easily exceeded. The actual result for 2018 (835,216) represents 6.2% growth over 2017.
2019 Tax Year: After only two years of using the number of CVITP returns completed as the performance indicator, the CRA shifted to using the number of individuals helped by the CVITP as its performance indicator. Although the number of individuals assisted by the CVITP in previous years has not been formally reported, we know that 741,400 individuals were assisted by the CVITP in the 2018 Tax Year. Achieving the target of 802,000 for 2019 would therefore represent 8% growth over the previous year. However, given the disruption caused by COVID-19 during the 2019 Tax Year, we expect the CVITP to fall well short of this target.
2020 Tax Year: The experience with COVID-19 in 2020 has put the shape and performance of the 2020 tax season and clinics into question. We won’t learn the actual numbers until probably sometime in 2022. But we think it is fair to say that the current planned target of 873,000 for 2020 needs to be discarded.
How well does the CVITP perform in achieving the results the CRA set out for it? Based on the data currently available, all we can say is that in the first year (2017) it fell short of its target (800,000) and in the second year (2018) it exceeded its target (800,000) which was the same as for the previous year.
As noted above, for the third year (2019) and going forward, the CRA will tell us about how well it is doing in relation to a different performance indicator. (As of this date, we have no information on its performance against this new indicator although we believe the CRA will underperform against the target it set for itself for the 2019 Tax Year [802,000] for reasons partially beyond its control.)
Overall, we believe this demonstrates that the CRA’s reporting on the CVITP has been weak to date and gives Parliament too little information. It is also inconsistent, with changes in definitions from year to year that would not be considered acceptable in any other context.
Why the CRA’s lack of information on CVITP performance matters
The Government of Canada’s Poverty Reduction Strategy was launched in 2018. As we have indicated elsewhere, this strategy recognized the CVITP as a government initiative in support of poverty reduction. Yet in subsequently preparing its plans for the 2019 and 2020 Tax Years, the CRA has not made any link between the CVITP’s performance and the objectives of the Poverty Reduction Strategy.
Even with the shift from counting the number of returns filed to the number of individuals assisted, the one performance indicator the CRA uses to track the CVITP says nothing about its contribution to the reduction of income-based poverty in Canada. We still won’t know basic information like the income profile of the clients actually being served by the CVITP.
What the CRA can do to provide more information on CVITP performance
Given that the federal government has made the link between poverty reduction and the CVITP in its Poverty Reduction Strategy, we believe the CRA should follow suit. It should explicitly acknowledge this link by assessing CVITP performance in terms of how well it is contributing toward reducing income-related poverty.
We will propose a set of performance indicators the CRA could use for the CVITP which would go some way toward filling this gap. But first we need to discuss something the CRA presently treats outside of the CVITP which has the potential to make a significant contribution toward further reducing income-related poverty in Canada and which we believe the CVITP is well positioned to help in addressing: the problem of low-income non-filers. This is the subject of a separate article.