The Canada Revenue Agency (CRA) recently announced that it will, for the first time, be providing financial support to host organizations that run CVITP clinics.  As the CRA has previously denied that it could provide such support, this is an important change.  And in principle, it is one that we support.

However, the current pilot project, which offers $3.3 million a year over the next three years, is poorly designed, with no targeting (not in line with the purpose of the program), insufficient financing (unlikely to provide the intended incentive effects), and an administrative process that is burdensome (not exploiting the flexibilities available with the use of grant funding).

Recognizing that this three-year pilot project has yet to begin its first year of implementation, we make some suggested changes that we believe will significantly improve its impact.  We propose that the CRA:

• Target its grant funding to ensure host organizations are providing support to those who need it the most;
• Make the client income level a criterion, using the poverty line as the threshold;
• Set a minimum percentage for a host organization’s client returns that must meet or fall below the poverty line to qualify for any grant funding;
• Offer a larger financial incentive for returns filed by clients who had previously not filed for a number of years;
• Establish and publicize the minimum percentage and the size of the financial incentive at the outset of the grant funding period;
• Significantly increase the funding level per eligible return to provide for something approaching a real incentive;
• Use the annual registration process for the approval of host organizations to collect all of the information required to assess the host organization’s eligibility for grant funding; and
• Use the annual registration process for the approval of host organizations to notify eligible host organizations of the funding formula it will use to determine the amount of grant funding they could receive at the end of the eligible activity period.

We conclude this four-part series of short articles offering some thoughts on the challenges the CRA will face in assessing the impact of this pilot project.  Given the difficulty in surmounting these challenges, there is a risk that any growth in the numbers will be claimed as demonstrating the success of the pilot and used to justify maintaining this project with poor targeting, insufficient financial resources and cumbersome administrative arrangements.