Reallocation at CRA, a Case of Real Bad Management

The AFS Group has recently been notified of the Reallocation exercise completed by CRA. Essentially, this exercise results in a decrease to the Compliance Program Branch funding by 5% as follows:

• Reduction to the International and Large Business budget by $10M, mainly in the lower risk Large Files activities, and
• Reduction to the Small and Medium Enterprises budget by $27.8M, mainly in the Office Audit, Small Business and Medium Business activities.

The background:

1. The Government of Canada provides CRA with additional funding to combat aggressive tax planners in the area of International Tax, Tax Avoidance and Large Business.
2. The Office of the Auditor General has indicated more experienced employees are required to audit in the areas of International, Tax avoidance and Large business.
3. CRA indicated the Ontario auditors entering CRA (CTAO initiative) will expand The Compliance Program Branch because of all the new business, not just in Ontario but across Canada. The CTAO initiative was put in place in April 2008.
4. In Calgary, where the economy is booming, there is an insufficient number of tax auditors available to perform audits. Calgary has the highest per capita investment advisors of any city in Canada, yet CRA conducts the least number of audits in this province due to lack of auditors.
5. CRA has indicated they do not recognize retention or requirement problems anywhere in Canada.
6. There are no AU-05 Appeals officers in the field at CRA Tax Service Offices, but management has appointed two (2) AU-05 Appeals officers from the province of Ontario, contrary to the CTAO agreements.
7. CRA has two Executive Cadre individuals that came over from the province of Ontario to supervise auditors, again, contrary to the CTAO agreement.
8. The AFS Group estimated that the implementation expense for the new staffing regime within the agency, so far, at over $50 million. CRA management, when questioned on the expense related to the staffing regime, has indicated that they have no estimate. What value has the $50 million provided: a decrease in audit coverage per the CRA reallocation exercise!?
9. The AFS Group indicated to management five (5) years ago that Managed Distributed Environment (MDE) will not work. Management has now abandoned MDE, but as a result, they have lost funding for over 80 FTEs (approx 5% workforce). This loss in funding is equivalent to the saving initiative that the MDE was supposed to achieve.
10. The AFS has had to file a complaint of unfair labour practice under the Public Service Labour Relations Act against CRA because it has reneged on the CTAO agreements. CRA indicated that if any of the members would be hurt by this deal, corrective action would be taken yet they refuse to do so.
11. Then CRA applied to the Conference Board of Canada and was chosen as a top contender in the Public Sector Category of its 2008 National Awards in Governance recognizing their efforts related to the new STAFFING regime. Obviously CRA and its management believe this is the best system in the world.
12. If CRA requires funding to upgrade their computer system then they should do a business case and present it to Parliament. That’s their job and the Board of Management duties. Instead CRA has an overpriced and non working staffing system.
13. The reallocation exercise and its results are, in of themselves, are disrespectful of the professionals within the AFS Group but when considered with the lack of success and the CRA approach at the bargaining table so far this reaches a level of disrespect that is quite disturbing.

Is management at CRA just talking up the CRA values of professionalism, respect, integrity and cooperation? Does management at CRA put these values into practice? You judge from the above comments. Do CRA and its management know what they are doing? Again, you be the judge.

The AFS Group does not only preach the values, but practices them. The CTAO agreement was signed taking into consideration cooperation and trust between union and management. Obviously CRA does not hold these values in as high esteem as does the AFS Group.

This Reallocation exercise is an attack on the AFS Group. More money should be allocated to the Compliance Program Branch to ensure a fair tax system is in place. CRA’s decision to reduce audit coverage is yet another example of how CRA attacks the little guy while big business enjoys tax holidays.