Bernier, Govindadeva; Cléophat, Régine

[{"label":"Home","url":"https:\/\/www.pbo-dpb.ca\/en"},{"label":"Publications","url":"https:\/\/www.pbo-dpb.ca\/en\/publications"},{"label":"International Comparison of the Canada Revenue Agency\u2019s Performance","url":"https:\/\/www.pbo-dpb.ca\/en\/publications\/RP-2122-036-S--international-comparison-canada-revenue-agency-performance--comparaison-internationale-rendement-agence-revenu-canada"}]

International Comparison of the Canada Revenue Agency’s Performance

PDF

Govindadeva Bernier; Régine Cléophat

Published on March 29, 2022 PDF

This report compares Canada’s tax administration performance with that of comparable countries with a set of indicators derived from the International survey on Revenue Administration (ISORA) 2020. ISORA is administered every two years, collecting data on the previous two fiscal years from over 150 national or federal tax administrations around the globe.

Highlights

From Budget 2016 to Budget 2021, the federal government announced over $3 billion in additional funding to the Canada Revenue Agency (CRA), over the 2016-17 to 2025-26 fiscal years, for multiple initiatives with nearly $2 billion specifically for compliance activities.
Even with all the funding announcements since Budget 2016, CRA’s spending excluding transfer payments will not have increased significantly over the 2017 to 2024 period after accounting for inflation.
The only areas where Canada significantly outperformed the comparable countries were in terms of the value of additional assessments for value added tax and the number of audits conducted per auditor. This is expected since the CRA conducts a high volume of relatively less complex value added tax audits.
Canada performed relatively poorly in terms of arrears compared to the other countries, especially with respect to corporate income tax and value added tax arrears. The ISORA survey contains no details on the type of taxpayers owing these arrears (i.e., small vs large corporations). However, Canada’s performance could be indicative of, for example, a preference from the tax administration to not pursue aggressively small business owners.
Canada is among the worst performers regarding cost of collection ratios, outperforming only Germany. However, cost of collection ratios must be interpreted with caution. An underfunded tax administration is likely to present a high-performance ratio but might be losing a lot of potential revenue because it does not have the resources to conduct audits.

Indigenous peoples