September 7, 2025
Summary: I believe there are three reasons why the pilot project failed. First, the grant financing formula used by the CRA changed almost every year and was announced too late to facilitate good planning. Second, even the most generous of the financing formulas only paid a small portion of the costs incurred by most host organizations. The grant amounts were too small to convince existing host organizations to significantly increase the size of their clinics and other community-based organizations to take on hosting CVITP clinics. Third, the project was based on the dubious assumption that grant financing is the most important constraint to expanding the CVITP. But community-based organizations face many other constraints, some of which may be more important. For some organizations considering hosting a new CVITP clinic, finding suitable expertise may be a more important constraint.
Given that the pilot grant project had failed to meet its most important objective while costing the CRA far more than intended, why did the CRA announce a fourth-year extension when it could have terminated the pilot after the third year? First, after having shown community-based organizations that it could provide funding, even if only on a pilot basis, it would have proven politically difficult for the CRA to end the project without any further funding being offered. Funding needed in principle to continue to avoid any negative political fallout and potential reduction in CVITP service. Grants for third year of the pilot were only awarded in September and October 2023. Therefore, there was probably too little time between October 2023 and January 2024 for the CRA both to report internally on the results of the pilot project and to obtain ministerial approval of a new, more permanent funding mechanism.
Thus, the second reason is that it was likely more expeditious for the CRA simply to extend the pilot for a fourth year. A more permanent source of funding could be sought in 2024, well in advance of the 2025 season.
Despite this, we now know that the pilot project was extended again to 2025 for a fifth year. The third article in this three-part series speculates on why this happened and what is likely to happen after 2025.
This second article in this three part-series takes the failure of the pilot project, as outlined in the first article, as its starting point. It looks at the reasons for its failure to achieve the pilot project’s most important objective, encouraging growth in the number of CVITP participating organizations.
The CRA’s performance target was 5% annual growth. And yet, in 2021, the first year of the project, the number of host organizations declined by 8% from 2020. That decline slowed in 2022 to 2% from 2021. But it was still a further decline. In 2023, the decline stopped. But there was no growth in the number of host organizations. Finally, by 2024 the number of host organizations started increasing. But the growth was only 3% over 2023. This meant that by 2024, there were still fewer host organizations operating than had been the case prior to the pilot project.
Given the large sums of money, why did the project fail?
The CRA’s stated scope and objectives for the pilot project make it clear that the project funds were intended to serve as an incentive for existing CVITP host organizations to do more and to encourage other community-based organizations to offer CVITP clinics. As indicated above, after four years there is no public evidence to support the first and the CRA’s own data shows the second did not happen.
I believe there are three reasons for this.
First, the grant financing formula used by the CRA changed almost every year. If the community-based organizations were going to respond as the CRA hoped, the amounts that these organizations stood to get if they offered CVITP clinics had to be indicated well in advance of the season. This would have allowed new community-based organizations to plan their CVITP clinics and existing CVITP host organizations to ramp up their infrastructure.
However, the CRA’s announcements were not timed to support this approach. While the period for eligible activity (filing of returns) generally ran for 12 months (except for the first year, 2021), the CRA announcement regarding the grant financing formula was almost always made well after the eligible activity period had begun:
| year | eligible activity period | cra announcement |
|---|---|---|
| 2021 | February to May 31, 2021 | February 2021 |
| 2022 | June 1, 2021 to May 31, 2022 | October 2022 |
| 2023 | June 1, 2022 to May 31, 2023 | May 2023 |
| 2024 | June 1, 2023 to May 31, 2024 | November 2023 |
| 2025 | June 1, 2024 to May 31, 2025 | January 2025 |
The second reason for the project’s failure is that even the most generous of the financing formulas only paid a small portion of the costs incurred by most host organizations.
To illustrate this in the simplest way possible, the following table assumes that all CVITP host organizations applying for a grant received the same amount of money.[i]
| Year | number of host organizations receiving grants | amount of money spent (or available) through the pilot project | average grant amount received by each host organization |
|---|---|---|---|
| 2021 | 2,033 | $3,865,195 | $1,813 |
| 2022 | 1,560 | $5,143,120 | $3,297 |
| 2023 | 1,720 | $6,006,577 | $3,492 |
| 2024 | Not yet published | ($5,900,000) | To be determined |
The CRA funding offered to existing CVITP host organizations was no doubt welcome as the CRA had never offered any funding before so even the small amounts on offer were appreciated. Even though the average amount increased over time, these amounts fell far short of the costs incurred by most host organizations to run CVITP clinics during the March-April period (to say nothing of the rest of the year). This is not to suggest that the CRA should have covered all their costs. But these were too small to convince existing host organizations to significantly increase the size of their clinics and other community-based organizations to take on hosting CVITP clinics.
The third reason for the failure is that CRA pilot project assumed financing of CVITP operations was the most important constraint to expanding the CVITP: what was needed were small financial incentives to convince community-based organizations to become new host organizations. Yet, as a colleague pointed out to me, this was a questionable assumption.
For many community-based organizations, there are other constraints which may be more important. For some, hosting new CVITP clinics is a challenging task requiring expertise they often lack. In the absence of suitable expertise, they may be reluctant to host CVITP clinics. In another article, I suggest another approach to the use of grant funding which addresses this issue and could either complement the approach used in the pilot project or, in the absence of grant funding in its current form, prove more effective in recruiting new host organizations.
Why then did the CRA extend the project for a fourth year?
Given that the pilot grant project failed to meet its most important objective while costing the CRA more than intended, the CRA could have been expected to terminate the pilot after the third year. Yet it announced a fourth-year extension with as generous funding as was provided for the third year.
The CRA knew the figure for the number of host organizations registered for the 2023 tax season early in 2023. It could see that this number was no different from the one for 2022 which was in fact lower than the number for 2021. So, the CRA knew early enough in 2023 that it was once again not meeting its most important objective.
My hunch is that the CRA decided to extend for a fourth year for two related reasons. First, after having shown community-based organizations that it could provide funding, even if only on a pilot basis, it would have proven politically difficult for the CRA to end the project without any further funding being offered. Funding needed in principle to continue to avoid any negative political fallout and potential reduction in CVITP service.
Ideally, this would have meant putting an alternative, more permanent funding mechanism in place well in advance of the 2024 tax season. Within the third year of the pilot project, grants for the eligible activity period running from June 1, 2022, to May 31, 2023, were only awarded in September and October 2023. Therefore, there was probably too little time between October 2023 and January 2024 for the CRA both to report internally on the results of the pilot project and to obtain ministerial approval of a new funding mechanism.
Thus, the second reason is that it was likely more expeditious for the CRA simply to extend the pilot for a fourth year. A more permanent source of funding could be sought in 2024, well in advance of the 2025 season.
Despite this, we now know that the pilot project was extended again to 2025 for a fifth year. The third article in this three-part series speculates on why this happened and what is likely to happen after 2025.
[i] The Grants and Contributions page on the federal government’s Open Government portal shows this was not the case. (See the first article in this series for an explanation of how to generate the expenditures reflected in this table.) A small number of host organizations received large grants compared to most grant-receiving host organizations. Using the simplifying assumption overestimates the average grant amount received by each host organization.