July 14, 2021
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. This is the subject of this first article.
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. This is the subject of the companion article, entitled “Then, the CRA Needs to Build a Strategy With a Focus on Improving EFFICIENCY“.
Collecting and Analyzing Data on the CVITP’s Results
First, data needs to be collected and analyzed to confirm whether or not the CVITP is meeting its intended objectives. It may seem obvious to state but data needs to be collected that is actually relevant to the results that the CVITP is trying to achieve.
We think the CRA collects, analyses and publishes the wrong data. The problem is that the data the CRA publishes on the results it achieves through the CVITP are not relevant to the intended objectives of the CVITP.
The purpose of the CVITP is to help individuals on low and modest incomes, and especially vulnerable individuals, to file their income and benefit returns.
To show how well the CVITP meets this objective, in 2012 the CRA started reporting on the number of returns completed through the CVITP. In 2017, following on a policy decision affecting all federal departments and agencies, the CRA chose the number of returns completed as its performance indicator for the CVITP. In 2019, the CRA switched to the number of people assisted as the performance indicator for the CVITP.
We have explained elsewhere why we think data on the number of returns completed and the number of people assisted are ill-suited for telling the CRA anything about how well the CVITP is performing with respect to its purpose.
The CRA needs more suitable performance indicators that can tell it how well the CVITP is performing. We have already identified four indicators that we think fit the bill:
- The percentage of the population falling below the official poverty line which is not filing a return
- The percentage of CVITP clients falling below the official poverty line which was classified the previous year as a non-filer
- The percentage of CVITP clients falling below the official poverty line
- The percentage of the population falling below the official poverty line which is not a CVITP client
There are two sources for the data which lie behind these indicators. One is Statistics Canada, based on census information. The other is the CRA itself, based on information in the income tax and benefit returns it collects.
Trends would emerge from the data collected year over year on each of these indicators. Analysis of these trends would reveal if the CRA is making headway in:
- reducing the percentage of people below the poverty line classified as non-filers
- increasing the percentage of CVITP clients falling below the poverty line who were classified the previous year as non-filers
- increasing the percentage of CVITP clients who fall below the poverty line
- reducing the percentage of people falling below the poverty line who are not CVITP clients
Results over time on these four indicators could help to clarify the priorities for future CRA actions (i.e. strategy) to better ensure the CVITP will meet (or continue to meet) its intended objective. This will be especially important at the subnational level, in pinpointing locations where performance falls short. (The use of numbers as well as percentages to help guides decisions will be important as some regions with low percentages but high numbers may warrant greater attention than others with high percentages but low numbers.)
This is the first data priority for the CRA: to start collecting and analyzing the correct data on the CVITP’s clients on the basis of information in their returns and Statistics Canada census information. Until the CRA starts doing this, the CRA won’t know if it is achieving the CVITP’s purpose.
Furthermore, we think the CRA needs to publish this data to show the results being obtained by the CVITP. In another article, we give four reasons why we think it should be doing this.
However, the CRA is moving in the wrong direction, even on this front. Surprisingly, starting in fiscal year 2021-22, the CRA has indicated it will no longer use any performance indicator for reporting on CVITP related results. This means there will be no data publicly available on the CVITP.
Collecting and Analyzing Data on the CVITP’s Delivery Infrastructure
For the CVITP to achieve its results, the CRA relies almost entirely on the free services offered by host organizations and their volunteers. We will refer here to the group of host organizations and their volunteers as the CVITP’s “delivery infrastructure”.
If the CVITP is falling short of its objectives, changes need to be made to this infrastructure. For example, analysis at the subnational level of the results achieved on the four indicators mentioned above can help to pinpoint locations where the CVITP’s performance falls particularly short of expectations. These locations could then be the focus of interventions aimed at making improvements to the local delivery infrastructure.
As a first step toward making such improvements, the CRA needs to know the characteristics of the CVITP’s current delivery infrastructure. This means collecting and analyzing data on the characteristics of the host organizations and volunteers who currently provide CVITP services.
During the annual CVITP registration process which takes place before the start of the new tax season, the CRA currently collects a lot of useful information on host organizations and volunteers. Below, we show make some suggestions on the collection of information and give reasons for our suggestions.
No doubt, the CRA is already analyzing some of this data to pinpoint trends in the composition of one or more characteristics of host organizations and/or volunteers.
For example, by combining data on host organizations by location and period of year in which CVITP services are offered, the CRA may have gained an understanding of how well served a location is throughout the year with CVITP services. Over time, the CRA can ascertain if an increasing number of host organizations in a specific location are offering these services year-round.
Again, by combining data on volunteers by host organization, the CRA may have identified which volunteers are affiliated with multiple host organizations, and thus determined which host organizations’ CVITP services would be in greatest jeopardy were they to lose these volunteers.
This, then, is the second data priority for the CRA: to improve on its collection and analysis of data on the CVITP’s delivery infrastructure on the basis of the information provided in host organization and volunteer registrations.
The CRA is already doing some of this work. However, it is impossible to assess the quality of this work. Unlike with its results data, we do not believe the CRA is under any obligation to publish its data and analysis on host organizations and volunteers. Although, of course, it would be useful to all those with an interest in the CVITP if the CRA did this.
In principle, then, the CRA collects and analyses data to better understand the CVITP’s current delivery infrastructure. The CRA must do this, in turn, to able to identify the improvements it needs to facilitate within the delivery infrastructure. The choices of improvements it makes form its strategy for the CVITP.
In a companion article, entitled “Then, the CRA Needs to Build a Strategy With a Focus on Improving EFFICIENCY“, we look at how the CRA’s data analysis can inform its choices. We argue that even if the CRA were to collect and analyze the correct data, we believe it is making the wrong strategic choice for enhancing and expanding the CVITP.