December 7, 2020
The 2012 tax year was the first time that the Canada Revenue Agency (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 indicators for the CVITP. This was part of a broader government effort launched in 2016 to have departments report annually on the results they achieve that contribute to their mandates.
Government Policy on Results
Like all government departments and agencies, the CRA is subject to the policy established by the Treasury Board Secretariat (TBS) of the government of Canada on results. This means that the CRA must:
– 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.
What’s in a Departmental Results Framework?
A department’s results framework includes its:
- core responsibilities
- results which represent the changes the department seeks to influence (these are often outside the department’s control but should be influenced by program-level outcomes)
- performance indicators for these results
Performance indicators can be:
- quantitative, in which case they should include information on data type, data collection frequency, data source, data owner, targets (where appropriate) and thresholds
- qualitative, in which case they should include descriptions
Within this context, the CRA must establish a Departmental Results Framework that sets out the CRA’s core responsibilities, results and performance indicators.
The CRA’s Departmental Plan for fiscal year 20/21 identifies two core responsibilities, each with one or more expected 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
Presently, there are 11 quantitative performance indicators related to the tax core responsibility and its expected results. And there are 3 quantitative performance indicators related to the benefits core responsibility and its expected result.
CRA Reporting on CVITP Results
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.
This is a bit surprising as most CVITP clients pay little or no tax; many clients’ tax obligations can be met very easily. The main advantage to their participation in the CVITP is to ensure they are enrolled for and maintain their access to benefits; clients are then dependent on the CRA for the receipt of their rightful benefits and in a timely manner. The government clearly recognizes this, stating that “[a]n expansion of the CVITP should increase tax filing and benefit uptake rates, improving the quality of life of vulnerable Canadians.”
Here’s how the CRA has reported to Parliament and the public on its plans and end-of-year results in managing the CVITP.
What’s Wrong With This?
TBS Policy on Results
Observations
“Be clear as to what it is trying to achieve and how it assesses success”
The above performance indicators and their targets make clear what the CRA is trying to achieve each year and how it assesses its success. But these are not sufficiently linked to the purpose which is focused on helping people of modest and low income to file their returns.
In the first two years, the emphasis is on returns, and in the next two on individuals but without identifying any characteristics of the individuals.
”Measure and evaluate its performance, using the resulting information to manage and improve programs, policies and services”
The above record on performance indicators, targets and results achieved yields a number of conclusions.
First, the record on achievements is of a very short duration. Based on the data currently available, all we can say is that, in the first year (2017), it fell short of its target and, in the second year (2018), it exceeded its target which was the same as for the previous year.
Second, while the change in the performance indicator and associated targets from returns completed to individuals helped is a shift in the right direction, it means that the basis for evaluating performance starts afresh. Given this, it is premature to make any statements about the success of the program.
Third, it is difficult to see how the information gleaned from the old or the new indicator is well suited to managing and improving the CVITP based on the stated purpose. We think this for two reasons. First, as mentioned above, the indicator says nothing about the targeted population. Yet we know that the program is intended to serve individuals of modest incomes and vulnerable groups. Second, there is no reason given why an increase in close to 10% in 2020 over 2019 is the appropriate target.
Yet recent budget increases to the CRA were intended to “double the size of the program, helping hundreds of thousands more individuals”. Again, “[a]n expansion of the CVITP should increase tax filing and benefit uptake rates”.
“Allocate resources based on performance to optimize results”
The CRA’s Departmental Results Report for 17/18 states that “[t]he CVITP has been a true Agency success story”. No reasons were given for this statement. Yet this assessment was provided when the CRA had, at most, the result based on the indicator and target for the 2017 tax year only. The result achieved fell short of the target.
Nevertheless, Budget 2018 (covering the 18/19 fiscal year) confirmed that significant new resources had been and were being allocated to the CRA’s budget for managing the CVITP: “[w]ith total annual ongoing investments of $13 million in Budget 2016 and Budget 2018, the Government has quadrupled funding to support the Community Volunteer Income Tax Program in recent years.”
Given the information above, we are unclear as to how these resources were allocated based on prior performance, or why a quadrupling of the program’s budget should give rise to a target for growth of less than 10%.
“Give Parliamentarians and the public transparent, clear and useful information on the results that it has achieved and the resources used to do so”
As we state elsewhere, we believe the above demonstrates that the CRA’s reporting on the CVITP has been weak to date and gives Parliament and the public 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.
Most importantly, the information provided to date is not useful because we do not know if the program is serving individuals and families from the intended population. Furthermore, there is no way of knowing if recent budget increases are helping the CVITP to reach a greater proportion of its intended target population.
Is there a better way of doing this? We think so. See our proposal for an alternative CVITP results framework here.