Supplier Name: Phoenix SPI
Contract Number: CW2298200 Award Date: 2023-03-27
Contract Value: $149,915.00 (including applicable taxes)
Delivery Date: October 2023
Registration Number: POR #147-22
For more information, please contact: cra-arc.media@cra-arc.gc.ca.
Ce rapport est aussi disponible en français.
Prepared for the Canada Revenue Agency
Supplier name: Phoenix Strategic Perspectives Inc.
October 2023
This public opinion research report presents the findings from qualitative research conducted to assess the perceptions and experiences of taxpayers, decision-makers of small businesses, and professionals involved in assisting individual and small business clients on tax-related or payroll matters in the following areas: views of the CRA; income tax filing and interactions with the CRA; service expectations of the CRA; protection of personal information; and compliance related activities. To meet the objectives, 25 focus groups and five in-depth interviews were conducted across the country. Eleven focus groups and five in-depth interviews were conducted online, and the remainder (14 focus groups) were conducted in person. The fieldwork took place between June 5 and July 6, 2023.
Cette publication est aussi disponible en français sous le titre :
Recherche d’entreprise annuelle de l’ARC de 2022 - 2023 - Constatations qualitatives
Permission to Reproduce:
This publication may be reproduced for non-commercial purposes only. Prior written permission must be obtained from the Canada Revenue Agency. For more information on this report, please contact the Canada Revenue Agency at: cra-arc.media@cra-arc.gc.ca.
Catalogue number: Rv4-126/1-2024E-PDF
International Standard Book Number (ISBN): 978-0-660-49953-6
Related Publication (Registration Number: POR 147-22):
Catalogue number: Rv4-126/1-2024F-PDF (final report, French)
ISBN: 978-0-660-49954-3
The Canada Revenue Agency (CRA) commissioned Phoenix Strategic Perspectives (Phoenix SPI) to conduct qualitative public opinion research (POR) as part of the Agency’s annual corporate-wide issues public opinion research.
The purpose of the research was to assess the perceptions and experiences of taxpayers, decision-makers of small businesses, and professionals involved in assisting individual and small business clients on tax-related or payroll matters in the following areas: views of the Agency; income tax filing and interactions with the CRA; service expectations of the CRA; protection of personal information; and compliance-related activities.
To meet the objectives, 25 focus groups and five in-depth interviews were conducted across the country. Eleven focus groups and five in-depth interviews were conducted online, and the remainder (14 focus groups) were conducted in person. In-person sessions were held in Calgary, Toronto, Montreal, and Halifax. Online sessions were held with taxpayers residing in the Territories, tax intermediaries working in the Greater Toronto Area, as well as tax intermediaries and small business decision-makers working in western Canada and Atlantic Canada, as well as in smaller communities across the country. In total, 196 individuals participated in the research: 85 taxpayers, 57 decision-makers of small businesses, and 54 tax intermediaries. All sessions were conducted in English, except for the focus groups in Montreal and the five in-depth interviews conducted with taxpayers living in the North. All participants received an honorarium. The fieldwork took place between June 5 and July 6, 2023.
Impressions of Canada’s tax system tend to be critical with a focus on its perceived complexity. So too were top-of-mind views of the CRA—participants routinely focused on service-related issues when asked what first comes to mind when thinking about the CRA.
The most common impression of Canada’s tax system, and the most widespread was its perceived complexity. Asked what words they would use to describe Canada’s tax system, participants routinely used terms expressing variations on this theme. This included the following: ‘challenging’, ‘complex’, ‘confusing’, ‘convoluted’, ‘cumbersome’, ‘difficult to understand’, ‘frustrating’, ‘onerous’, ‘over-complicated’, ‘overwhelming’, ‘rule-heavy’, and ‘scary’.
In addition to complexity, the other impression about Canada’s tax system expressed with some frequency was a perceived lack of fairness, which was conveyed through the use of the term itself (i.e., ‘unfair’), but also through expressions such as ‘unjust’, ‘taxes too high’, ‘middle class overtaxed’, ‘benefits the rich’, ‘big firms getting away with a lot’, ‘predatory’, ‘overburdening’, and ‘inequitable’. This was an impression widespread among taxpayers, but much less frequent among representatives of small businesses and intermediaries.
When asked what first comes to mind when thinking about the CRA, participants tended to focus on service-related issues or problems. This included difficulty getting through to an agent by phone, and difficulty resolving an issue or getting a definite answer to questions. The only other thing that came to mind with any frequency when thinking about the CRA was its customer service agents. For the most part, impressions about agents tended to be positive, with a focus on staff being helpful, polite, empathetic, and patient. On occasion, however, participants’ impressions were either mixed, describing service as ‘inconsistent’, or critical, describing service agents as being ‘aggressive’, ‘not nice to deal with’, ‘not helpful’, ‘not proactive’, or ‘unreasonable’.
While top-of-mind views of the CRA tended to be critical, overall impressions of the CRA ranged from neutral to moderately positive.
Impressions of taxpayers and representatives of small businesses tended to range from neutral or mixed to moderately positive, while overall impressions of tax intermediaries tended to be neither positive nor negative. Neutral to mixed assessments focused on service interactions, with an emphasis on uneven or inconsistent service from CRA agents. In other words, service delivery was sometimes good and sometimes not good. Negative impressions focused on two things: the time it takes to get through to an agent, and difficulty getting consistent information and/or resolving an issue in one service interaction.
Digital services and efficient processing of tax returns are viewed as things the CRA does well and reducing wait times was the most frequently identified thing the CRA needs to improve.
There was widespread agreement that the CRA offers good online services and processes returns quickly and efficiently. This includes the Agency’s website as well as its digital services: My Account (for individuals) and My Business Account/Represent a Client. Members of all three audiences most often identified reduction of wait times when calling the CRA as something the Agency needs to improve. The only other area of improvement identified frequently was improving the overall knowledge of agents, with a focus on ensuring consistency in the information provided.
The CRA is perceived as trustworthy by most participants, primarily because there is no reason to think that the Agency is not trustworthy. Most, moreover, described their level of trust in the Agency as unchanged over the last few years—that is, nothing has affected their trust in the CRA by either increasing or diminishing it.
Based on their personal experience, or what they may have seen, read, or heard, most participants view the CRA as trustworthy. The most common reason for trusting the CRA was lack of any reason not to. Those who did not express outright trust in the Agency were more likely to have mixed feelings about this than to express outright lack of trust. Mixed assessments were almost entirely based on service interactions with the Agency—specifically, mixed experiences dealing with agents, but also mistakes made by the Agency that had to be brought to its attention, a perceived lack of proactivity on the part of the CRA in terms of providing information, and the need to revisit the same issue periodically.
Client-focused service and digital services are seen as being key features of a modern tax organization. The CRA, overall, was more often characterized as more traditional than modern. However, from the perspective of digital services, the CRA was described by many as modern or in the process of modernizing.
Most participants described a modern tax organization as being characterized by two things: client-focused service and technology/online services designed to deliver it. Client-focused service considered ‘modern’ was seen to include service that is consistent, timely, efficient, available 24/7, and tailored to meet the needs of the individual or business in question. ‘Modern’ technology/online services were routinely described as being ‘cutting-edge’, user-friendly, and secure. With an emphasis mainly on the view that a modern tax organization is technologically focused, participants tended to characterize the CRA as a modern tax organization, or expressed mixed views about this, including the impression that it is developing in that direction or trying to modernize.
When asked about the CRA adopting modern processes and new technologies to be responsive to a changing world, participants supported the CRA leveraging artificial intelligence (AI) to be an efficient and responsive organization.
There was widespread, but qualified, support for the use of AI by the CRA. Support for the use of AI was routinely conditional and premised on its use as a support mechanism rather than a decision-making tool. Specifically, AI should be used for such things as providing information, research, and assistance (e.g., answering questions), but not for making decisions and determining complex issues, such as an audit and eligibility for benefits (which should continue to involve/be subject to human oversight). In addition, even where AI is used in a supportive role, many participants felt that it should be implemented gradually and tested through pilot projects, and that any security-related issues be thoroughly addressed (e.g., protecting personal information) before such systems are implemented. A few participants did not support the use of AI by the CRA, even in a supportive role, because of concerns or apprehensions that it might not be controllable through human oversight.
Most taxpayers describe the process of completing and filing their tax returns as easy, and among representatives of small businesses and tax professionals, there was a widespread impression that the process of filing business taxes has become easier in recent years, primarily because of digital services.
Most taxpayers characterized the process of completing and filing their tax returns as easy or relatively easy, and there was a widespread impression that the process has become easier over time (or has not become more difficult). Reasons included the uncomplicated and/or unchanging nature of one’s tax situation, the use of tax software and e-filing, the use of a tax professional, and experience. Reasons for characterizing the process as complicated or difficult usually involved complexities or issues resulting from personal or family circumstances, but also included difficulty keeping track of tax-related documents, finding the correct forms, and understanding some of the language, terms or expressions used in various forms.
Representatives of small businesses and tax professionals felt that the process of filing business taxes has become easier in recent years, primarily because of their access to digital services, but also because of technology and software. What has become more complicated to some are new rules and regulations and/or changes to rules and regulations, as well as the use of unclear language in explaining rules and regulations.
There was widespread awareness and use of CRA’s digital services, and impressions of these services tended to be positive.
Awareness of My Account for individuals and My Business Account and Represent a Client is widespread as is registration for these services. Reasons for using My Account included receiving email, tracking refunds, setting up direct deposit, viewing the status of one’s return, viewing previous tax returns, checking RRSP limits, viewing notices of assessment, viewing tax information slips, submitting documents, and changing personal information, such as one’s address. Reasons for using My Business Account and Represent a Client included viewing mail, checking balances, setting up direct deposit, submitting documents, getting tax slips, making payments, and authorizing representatives.
Assessments of these digital services ranged from positive to very positive. Based on their experience, intermediaries routinely observed that Represent a Client makes the process of meeting client’s tax filing obligations less burdensome because of its speed, ease of use, and comprehensiveness.
The main perceived challenge of small businesses when dealing with the CRA is the time it takes to reach an agent, followed by unmet information needs. According to tax professionals, being accessible and providing tailored information for small businesses are the top ways in which the CRA can improve relations with small businesses.
The most frequently identified ‘biggest’ challenge of small businesses when dealing with the CRA was the time it takes to get through to an agent. Another challenge identified relatively frequently was uneven or inconsistent service from CRA agents regarding various issues, i.e., receiving different information from different agents. Other challenges were identified less frequently and included not always knowing where to start/what to ask/what one needs to know when contacting the CRA, difficulty finding information on the Agency’s website that is designed for small businesses, and a general sense that the CRA does not understand small businesses.
Asked what the CRA can do to improve its relationship with small businesses, intermediaries identified the following: provide dedicated phone lines for small businesses; provide a chat service; include notes on business owners’ files to help track and resolve issues; provide video tutorials or workshops for entrepreneurs, especially those just starting a business; provide tax-related information to entrepreneurs when registering their businesses; and provide consistent information in response to questions/information needs.
Getting through to an agent is also the main challenge tax intermediaries face when dealing with the CRA.
The most frequently identified challenge intermediaries said they face when dealing with the CRA is getting through to an agent, specifically the amount of time spent waiting on the phone to speak to an agent. Another frequently identified challenge dealing with the Agency was inconsistency of service, specifically the challenge of getting through to a knowledgeable agent.
Among research participants, there was a widespread impression that personal and business information is safe with the CRA. Confidence in the CRA’s ability to keep information safe is linked to how it communicates/acts.
There was a widespread impression that information is safe with the CRA. Asked if their feelings about this have shifted over the years, most participants said they had not. Some said that they have been thinking more about safety of information in general, given the increase of (or increased reporting of) incidents of hacking and identity theft, but that this has not affected their feelings regarding the safety of their information with the CRA. Some said their feelings have changed in the direction of increased confidence. This was either because of their direct experience with the CRA’s safety measures, or because of the impression that the CRA has increased and/or improved its security measures over time.
Asked if they would feel more or less confident about the CRA’s ability to keep information safe when the Agency communicates about events related to vulnerabilities with its tax database, participants observed that it depends on the way in which the Agency communicates and acts. A few said that, regardless of how the Agency reacts, their confidence in it would be shaken because a breach indicates that there are vulnerabilities. Some explained that their confidence in the Agency would likely be affected by factors such as: how quickly the breach was detected, the extent of the breach, the kind of information/data that was compromised, and the speed with which the problem is resolved, and the frequency of such events.
Staff knowledge and prompt service were identified as the most important service attributes when interacting with the CRA. Impressions of CRA staff tend to be mixed, with participants often specifying that the quality of service depends on the agent.
Asked what service qualities are most important to them when they interact with the CRA, participants most often identified the competence and knowledge of CRA agents and the ability to obtain answers and information promptly. Additional service attributes were also identified with some frequency, either on their own or as linked/associated with the latter. These included the ability to complete transactions in one service interaction and consistency in information (identified on their own or associated with the competence/knowledge of staff), and ease of access (identified on its own or associated with quick/efficient service).
Overall impressions of CRA staff tended to be mixed. Among taxpayers, impressions of CRA staff were routinely positive, but there was also a fairly widespread impression that service can vary depending on who one is dealing with. Differences in service were usually associated with the agent’s level of knowledge, not their willingness to be helpful, their politeness, or their empathy. Feedback from representatives of small businesses and intermediaries tended to be similar. Impressions of CRA staff were routinely positive when it came to such things as helpfulness, empathy, respect, and politeness (with a few exceptions), but there was a relatively widespread impression that knowledge varies depending on who one is dealing with.
There were differences in opinions about whether most people follow tax rules and pay their fair share of taxes. The main effects of some not paying their fair share of taxes were seen to be the unfair burden placed on others to pay taxes and fewer public services resulting from less income tax revenue.
Taxpayers tended to be divided on this issue between those who felt most pay their fair share and those who felt they do not or who have their doubts. Among those who felt that most people do not, some suggested that the likelihood of paying one’s fair share of taxes varies by income level, with the assumption being that the middle-class carries the main burden when it comes to paying taxes.
As a follow-up to this, taxpayers were asked about the impact, if any, of people not following tax rules and not paying their fair share of taxes. In response, the most frequently identified impacts were an inordinate tax burden placed on others (mainly the middle class), a decline in the nature and quality of public services, as well as a decline in benefits (e.g., rebates, credits).
For their part, representatives of small businesses and intermediaries generally agreed that it is sound for the CRA to proceed on the assumption that most people will meet their tax obligations (though some who thought this also recognized that ‘many’ will try to avoid fully complying with their obligations if they can).
According to representatives of small businesses and tax intermediaries, the CRA should provide information to help businesses learn about meeting their tax obligations.
Participants emphasized the CRA’s role in providing information to businesses with a focus on ensuring that the business information it provides through its agents and on its website is correct and current; that information for and about businesses is accessible/easy to find; and that such information is clear, with a focus on avoiding ambiguity, clarifying grey areas, and keeping language simple. Although representatives of small businesses and tax intermediaries see a role for the CRA in helping businesses learn about meeting their business tax obligations, there is virtually no awareness of any products or services offered by the Agency to help businesses comply.
There was a difference of opinion on whether tax cheating or benefitting from loopholes is the bigger problem for the rest of Canadians who pay their fair share of taxes. Opinions also differed on the perceived effectiveness of the CRA at addressing issues of non-compliance and on whether the CRA treats everyone equally in addressing non-compliance in meeting tax obligations.
Those who identified loopholes as the bigger problem often noted that they privilege the wealthy (with representatives of small businesses sometimes specifying that they favour large companies), and result in massive sums of lost tax revenue (taxpayers sometimes adding that this results in an unfair burden being placed on the middle class). Those who identified cheating as the bigger problem often noted that loopholes, though regrettable, are not illegal while cheating is a blatant disregard of the law. Some also felt that, while the existence and use of loopholes is a problem, they are not available to most people whereas cheating is more widespread (e.g., the underground economy/accepting cash for services).
Opinions on the effectiveness of the CRA at finding and addressing issues involving people not paying their fair share of taxes varied across all three audiences. Among taxpayers, the difference of opinion tended to be more clear-cut between those who felt the CRA is effective in this regard and those who felt it is not. Among representatives of small businesses and intermediaries, opinion tended to be more mixed, divided between those who described the Agency as effective, those who described it as ineffective, and those who said they do not know.
The reason provided most often to explain why the CRA is perceived as effective in this regard was the impression that the Agency has the power and resources to do this—for example, sophisticated means of tracking and monitoring and the authority to impose penalties or conduct audits. Opinion that the CRA is not effective in this regard was routinely based on a perceived lack of evidence that it is effective, exemplified mainly by the existence of tax havens and the underground economy.
Most participants did not think that the CRA treats everyone equally when it comes to addressing non-compliance. The most frequently given reason for believing that the CRA does not treat everyone equally was the impression that the Agency’s approach varies by income level. Specifically, there was a widespread assumption that the CRA tends to focus its enforcement activities on middle- and lower-income Canadians because they are easier to target. On the other hand, the wealthy and powerful were seen as having ways to avoid compliance, such as loopholes to exploit and offshore accounts to hide earnings.
Opinion was divided as to whether knowing about the CRA’s enforcement practices would result in greater trust that the CRA is making sure that everyone is paying their share of taxes.
Most taxpayers did not think that knowing more about the CRA’s enforcement practices would not result in greater trust that the CRA is making sure that everyone is paying their share of taxes. A few explained that such trust could only be increased by knowing that the Agency is implementing its enforcement practices. Conversely, most representatives of small businesses and intermediaries think that knowing about CRA enforcement practices would increase their trust that the Agency is making sure everyone pays their share of taxes.
Participants were usually aware of the underground economy, though some were not aware of it by this designation, and a few confused it initially with the black market. The main perceived effect of the underground economy is dealing with a tax shortfall.
There was widespread awareness of, and agreement about, the types of activities that characterize the underground economy. The most frequently provided example was paying cash for goods and services to avoid paying taxes. Ways of characterizing this kind of activity or transaction included ‘not declaring revenue’, ‘not charging tax’, and ‘providing cash for service’. Factors that taxpayers felt contribute to participation in the underground economy included increases in the cost of living, the impression that people are always looking for deals, a perception that taxes are too high, and a perception that the tax burden falls mainly on lower- and middle-income Canadians. In the opinion of taxpayers, the main effects of the underground economy include the tax burden being unevenly distributed—specifically, that those participating in the underground economy are not paying their fair share of taxes.
Most believe participation in underground economy has become more socially acceptable and that people who participate in these activities will not get caught.
Most participants believe that participation in the underground economy has become more socially acceptable over time. That said, this belief was more widespread among taxpayers, while there was more difference of opinion about this among representatives of small businesses and tax intermediaries. Reasons for believing that it has become more socially acceptable to do so included things like increases in the cost of living, a desire to save money and/or have more disposable income, the feeling that taxes are too high, and a decline in respect for authority/government, among other reasons.
Not only are these activities viewed as more socially acceptable by most participants, most also think it is unlikely that people who participate in the underground economy will get caught by the CRA. Reasons routinely provided to explain why included the perceived difficulty of monitoring such activities, the impression that the underground economy is willfully ignored, and the fact that one never hears anything about people being caught. The small number of business representatives and tax intermediaries who think it is likely that people who participate in the underground economy will get caught by the CRA usually pointed to the Agency’s growing technological sophistication and analytical capabilities to detect involvement in the underground economy.
Few have heard anything recently about offshore tax havens or CRA efforts to stop use of them, and many do not believe the CRA is doing enough to stop offshore non-compliance.
Only a few participants recall having heard anything recently in the media about offshore tax havens. Similarly, very few had heard anything about any measures, tools, or projects the CRA has put in place to stop individuals or businesses from hiding their revenue abroad to avoid paying taxes in Canada. Asked if they believe the CRA is doing enough to stop offshore non-compliance, participants either said no or that they do not know. Taxpayers were more likely to say they believe the Agency is not doing enough, while representatives of small businesses and intermediaries were more likely to say they do not know.
Reaction to the Voluntary Disclosures Program was positive. In addition, participants believe options for paying tax amounts owed should be available.
Perceived benefits of the Voluntary Disclosures Program (VDP) included retrieving tax revenue; incentivising ‘doing the right thing’; encouraging honesty in reporting; fostering trust in the tax system; saving the CRA time and resources in pursuing the non-compliant; and providing a cooperative instead of an adversarial approach to compliance. Participants collectively identified a variety of options that should be available to taxpayers when it comes to paying the tax amounts that are owed to the CRA through the VDP. The most frequently identified consideration was financial ability to pay, with participants occasionally suggesting that this could include accommodations, such as repayment plans and lower interest rates (or none at all).
Qualitative research is designed to reveal a rich range of opinions and generate directional insights rather than to measure what percentage of the target population holds a given opinion. The results of these focus groups and in-depth interviews provide an indication of participants’ views about the issues explored, but they cannot be quantified nor generalized to the full population of taxpayers, small businesses, and tax professionals. As such, the results may be used by the CRA for the following: to gauge trust in, and satisfaction with, the Agency; to provide evidence-based information for strategic decision-making; and to provide information for reporting on engagement and reputation management.
The contract value was $149,915.00 (including applicable taxes).
I hereby certify as a Senior Officer of Phoenix Strategic Perspectives that the deliverables fully comply with the Government of Canada political neutrality requirements outlined in the Communications Policy of the Government of Canada and Procedures for Planning and Contracting Public Opinion Research. Specifically, the deliverables do not contain any reference to electoral voting intentions, political party preferences, standings with the electorate, or ratings of the performance of a political party or its leader.
Alethea Woods
President
Phoenix Strategic Perspectives Inc.
In 2005, the CRA launched an annual survey that focusses on corporate-wide issues, with the aim to provide a public opinion context for strategic planning and reporting. An in-depth review of the methodology was conducted in 2010 and, in 2011, the Annual Corporate Research (ACR) was redesigned to include a core survey each year along with annually rotating modules and focus groups, featuring expanded target audiences. The fiscal year of 2011-2012 saw the first iteration of the ACR’s new cycle. In 2013, new questions were added to examine experiences with the CRA website. The 2013, 2016, 2018, and 2020 editions [1] repeated the service-focused module and the 2017 iteration was the first compliance module, repeated in 2019.
In 2021, another in-depth review of the methodology was conducted, and the ACR was again updated to reflect changes in corporate priorities and tax-related themes as well as changes in technology. The redesigned format of the ACR involved a change in design, where following the completion of the quantitative component of the research, a separate qualitative component would be conducted annual covering both service and compliance subject-matter. The annual addition of service and compliance groups will help the Agency explore in greater detail results from the survey component within a qualitative context in the spring following tax-filing season, where participant recall of their filing experiences will be based on recent experiences.
In this context, the CRA was interested in assessing perceptions of taxpayers, decision-makers of small businesses, and professionals involved in assisting individual and small business clients on tax-related or payroll matters (i.e., tax intermediaries). The specific objectives of this research were to explore the following:
The results provide the CRA with better contextual information regarding public and business perceptions of the CRA. With this information, the CRA may gauge factors such as trust in, and satisfaction with, the CRA, contextualize other study information, provide evidence-based information for strategic decision-making, and provide information for reporting on engagement and reputation management.
There were three target audiences:
Individual taxpayers: Those aged 18 who have lived in Canada for a minimum of one year
Small and medium-sized businesses (SMEs): Businesses of less than 100 employees. Participants included the business decision-makers or individuals involved in decisions related to the business tax matters, payroll, GST/HST preparation, or bookkeeping. Acceptable job titles included:
President/CEO/Owner
CFO/Comptroller
Accountant
Payroll Manager/Officer
Manager
Bookkeeper
Financial Officer
Tax Intermediaries (TIs or Intermediaries): Those who work with small and medium size business clients (<100 employees) on tax-related or payroll matters.
To meet the objectives, 25 focus groups and five in-depth interviews were conducted across the country. Eleven focus groups and five in-depth interviews were conducted online, and the remainder (14 focus groups) were conducted in person. In total, 196 individuals participated in the research: 85 taxpayers, 57 decision-makers of small businesses, and 54 tax intermediaries. Nine focus groups and five in-depth interviews were conducted with taxpayers and eight focus groups each were conducted with representatives of small businesses and tax intermediaries. The distribution of the groups was as follows:
|
Location |
Audience |
|||
|---|---|---|---|---|
|
Taxpayers |
Small businesses |
Tax intermediaries |
||
|
Calgary |
In person |
2 groups |
-- |
-- |
|
Toronto |
In person |
2 groups |
2 groups |
1 group |
|
Online |
-- |
-- |
1 group |
|
|
Montreal |
In person |
2 groups |
2 groups |
2 groups |
|
Halifax |
In person |
2 groups |
-- |
-- |
|
North |
Online |
1 group 5 interviews |
||
|
Western provinces |
Online |
-- |
1 group |
1 group |
|
Small communities (west) |
Online |
-- |
1 group |
1 group |
|
Small communities (east) |
Online |
-- |
1 group |
1 group |
|
Atlantic provinces |
Online |
-- |
1 group |
1 group |
All session were conducted in English, except for the focus groups in Montreal and the five in-depth interviews conducted with taxpayers living in northern and smaller communities which were conducted in French. The sessions with each audience were segmented, with one session focused on service-related issues and the other on compliance-related issues. To ensure an appropriate mix of participants for each of the issue areas, participants were segmented according to their views on taxation and compliance. All participants received an honorarium. The fieldwork took place between June 5 and July 6, 2023.
This section reports on overall impressions of the Canada Revenue Agency and Canada’s tax system. For the most part, these issues were explored in all focus groups and in-depth interviews. Where this was not the case, the relevant specifications are identified.
Top-of-mind impressions of Canada’s tax system tended to be critical. The most common impression of Canada’s tax system, and the most widespread among members of all three audiences, was its perceived complexity.[2] Asked what words they would use to describe Canada’s tax system, participants routinely used terms expressing variations on this theme. This included the following: ‘challenging’, ‘complex’, ‘confusing’, ‘convoluted’, ‘cumbersome’, ‘difficult to understand’, ‘frustrating’, ‘onerous’, ‘over-complicated’, ‘overwhelming’, ‘rule-heavy’, and ‘scary’.
In addition to complexity, the only other impression about Canada’s tax system expressed with any frequency was a perceived lack of fairness. This was an impression widespread among taxpayers but much less frequent among representatives of small businesses and intermediaries. This impression was conveyed through the use of the term itself (i.e., ‘unfair’), but also through expressions such as ‘unjust’, ‘taxes too high’, ‘middle class overtaxed’, ‘benefits the rich’, ‘big firms getting away with a lot’, ‘predatory’, ‘overburdening’, and ‘inequitable’.
Impressions of Canada’s tax system identified infrequently, i.e., by no more than a small number of participants, ran the gamut, from positive to negative. Positive impressions included the perception that Canada’s tax system is …
Critical impressions included the opinion that the system is redundant (in the sense that it requires one to provide information the government already has on record), and that it does not provide adequate services across the country given the amount of taxes paid by Canadians.
Mixed impressions included the perception that the system is challenging but fair, and that taxes are high but used to ensure public benefits.
Top-of-mind impressions of the CRA also tended to be critical among participants from the three research audiences, with a focus on service-related issues. Two particular issues routinely came to mind among participants when thinking about the CRA. This included difficulty getting through to an agent by phone (i.e., long wait times), and difficulty resolving an issue/getting a definite answer to questions. The latter was seen to involve getting different answers from different agents, being passed from one agent to another, and having to revisit the same issue periodically (i.e., ‘wasn’t this resolved during the last phone call’?). Representatives of small businesses and tax professionals also typically thought about tax collection or paying taxes (including the obligation to do so) when thinking about the CRA.
The only other thing that came to mind with any frequency when thinking about the CRA was its customer service agents. For the most part, impressions about agents tended to be positive, with a focus on staff being helpful, polite, empathetic, and patient. On occasion, however, participants’ impressions were either mixed, describing service as ‘inconsistent’, or critical. Those with negative impressions attributed them to agents being ‘aggressive’, ‘not nice to deal with’, ‘not helpful’, ‘not proactive’, or ‘unreasonable’.
Additional things common to members of all three audiences included the following, though none was identified with any frequency:
Other things that came to mind when participants thought about the CRA varied by audience.
Among taxpayers/members of the general public, several individuals thought about the following when thinking about the CRA:
Among representatives of small businesses, a few thought about the following when thinking about the CRA:
Among intermediaries, a few thought about the following when thinking about the CRA:
Members of the general public (i.e., taxpayers) were asked to explain, in their own words, what it is that the CRA does. Perceptions of what the Agency does routinely included collecting taxes and processing returns, distributing benefits and rebates, enforcing rules and regulations, and administering the tax system in general. The only other thing identified with any frequency was providing tax-related information.
Other things associated with the CRA that were identified by no more than a few participants included the following:
All participants were asked for their overall impression of the CRA, using a scale ranging from negative to positive. In response, impressions of taxpayers and representatives of small businesses tended to range from neutral or mixed to moderately positive, while overall impressions of intermediaries tended to be neither positive nor negative. Smaller numbers across all audiences placed themselves at the negative end of the scale, holding critical overall impressions of the Agency.
There were two consistent findings across all three audiences when it came to overall impressions of the CRA:
Beyond these, reasons underlying overall assessments of the CRA tended to vary by audience or were not mentioned with a similar frequency by various audiences. These differences are presented below.
Among members of the general public, positive impressions of the CRA tended to focus on efficient/timely processing of returns as well as a general lack of problems/issues when dealing with the Agency. The only other reason for positive impressions identified with any frequency was the ease of filing one’s income tax return. Other reasons informing positive impressions of the Agency included the following:
In addition to uneven or inconsistent service from CRA agents, middling impressions of the CRA were based on the following:
In addition to wait times to get through to an agent and difficulty resolving an issue in one service interaction, critical overall impressions of the CRA were based on the following:
Among representatives of small businesses, positive overall impressions of the CRA most often focused on lack of problems/issues when dealing with the Agency and the ease of use of the Agency’s electronic services. Other reasons informing positive impressions of the Agency included the following:
In addition to uneven or inconsistent service from CRA agents, middling or neutral impressions of the CRA were based on the following:
In addition to wait times to get through to an agent and difficulty resolving an issue in one service interaction, critical impressions of the CRA were based on the following: lack of notes on one’s file to record reasons for contacting the CRA, which was occasionally linked to difficulty resolving an issue in one service interaction; and an impression that the Agency has no idea what it is like running a small business.
Intermediaries’ positive impressions of the CRA focused on most of the same areas identified by representatives of small businesses. The only difference was their view that it has been easier to get through to the CRA by phone over time (this impression was not shared by representatives of small businesses).
In addition to uneven or inconsistent service from CRA agents, middling overall or neutral impressions of the CRA were based on the following:
Negative impressions of the CRA were based on the view that agents do not know the legislation that they are administering, which results in more work on the part of intermediaries who need to recontact the Agency in search of an answer/ruling, slow response times, and inefficiency (having to provide the same information each year for a client’s file).
As a follow-up to being asked for their overall impressions of the CRA, representatives of small businesses and intermediaries were asked how they would complete the following sentence: The CRA has a reputation for being …
The most frequent way in which this sentence was completed was with words like ‘difficult to reach’ or ‘slow’, with a focus on the time it can take to get through to an agent. This sentence was also routinely completed with words like ‘hard to deal with’, ‘frustrating’, and ‘inefficient’, with a focus on the difficulty of getting consistent information, getting passed around from one agent to another, and resolving an issue in one service interaction.
Other ways of completing this sentence were identified by no more than a few participants and included the following:
There was widespread agreement among members of all three audiences that the CRA offers good online services and processes returns quickly and efficiently. This includes the Agency’s website as well as its digital services: My Account (for individuals) in the case of members of the general public and My Business Account/Represent a Client in the case of representatives of small businesses and intermediaries.
Members of the general public (i.e., taxpayers) also routinely identified the CRA as being good at efficient distribution of benefits and rebates. Security features/maintaining security of information was also something many participants said the CRA is good at, but this was much more likely to be emphasized by representatives of small businesses and intermediaries than by taxpayers.
Other things the CRA was perceived as being good at were identified infrequently and included the following:
Members of all three audiences most often identified reduction of wait times when calling the CRA as something the Agency needs to improve. The only other area of improvement identified frequently was improving the overall knowledge of agents, with a focus on ensuring consistency in the information provided. Although this was identified across audiences, it was most likely to be identified by intermediaries. Other perceived areas for improvement identified across audiences included the following:
A few taxpayers suggested that the CRA should offer free tax filing software for taxpayers. For their part, a few intermediaries suggested that the Agency needs to improve the following:
Based on their personal experience, or what they may have seen, read, or heard, participants were asked how trustworthy the CRA is, using a scale with ‘not at all trustworthy’ on one end and ‘very trustworthy’ on the other. In response, there was a widespread impression across all three audiences that the CRA is trustworthy, and those who did not express outright trust in the Agency were more likely to have mixed feelings about this than to express outright lack of trust.
The most common reason across all audiences for trusting the CRA was lack of any reason not to, with participants often adding that their experiences with the Agency have been good overall or that they have not experienced problems or any issues that would lead them to lack trust in the Agency. This included observing that there is nothing that would lead them to believe that the Agency or its employees engage in unethical or dubious behaviour on the job. Many participants also specified that their trust in the Agency was due in part to measures the CRA takes to ensure the security of Canadians’ information, though this was much more likely to be specified by representatives of small businesses and intermediaries than by taxpayers.
Some participants across all three audiences ascribed their trust in the Agency to the impression that they have no choice but to trust the CRA or identified their trust as a hope or expectation. Additional reasons for trusting the Agency were identified infrequently and included the following:
Among members of all three audiences, mixed assessments were almost entirely based on personal service interactions with the Agency. This usually involved mixed experiences dealing with agents, but it also included mistakes made by the Agency that had to be brought to its attention, a perceived lack of proactivity in terms of providing information, and having to revisit the same issue periodically. One factor not based on personal experience, but identified by a few participants as contributing to mixed assessments of the Agency’s trustworthiness, was the fact that the Agency has been subject to hacking/data breaches.
A few representatives of small businesses attributed their mixed impressions of the trustworthiness of the Agency to the perception that it does not seem interested in going after large businesses that do not pay their fair share of taxes, including closing loopholes and pursuing those taking advantage of offshore accounts/tax havens. For their part, a few taxpayers attributed their mixed impressions of the Agency’s trustworthiness to the following:
Very few participants indicated that they lack trust in the Agency. Reasons for lack of trust included the following:
Most participants across all three audiences indicated that nothing over the last few years has affected their trust in the CRA by either increasing or diminishing it. The few who indicated that their level or degree of trust has either increased or decreased pointed to the following to explain why.
Reasons for increased trust included …
Reasons for diminished trust included …
This section reports on service-related issues. These issues were explored in 13 focus groups and two in-depth interviews. Topics explored included perceptions of what characterizes a modern tax organization, filing habits and use of online services, protection of personal information, and service experiences.
There was a widespread impression across all audiences that a modern tax organization is characterized by two things: client-focused service and technology/online services (including websites) designed to deliver it. Client-focused service considered ‘modern’ was seen to include service that is …
‘Modern’ technology/online services were routinely described as being advanced/cutting-edge (‘à la fine pointe’), user-friendly, and secure (the latter feature more likely to be emphasized by representatives of small businesses and intermediaries than by taxpayers). In addition to the importance assigned to digital services in a modern tax organization, there was a widespread assumption that such a modern organization is also characterized by two things: versatility in service options; that is, providing services that meet the needs of everyone, including those not comfortable with technology/online services; and human contact/interaction.
Another characteristic of a modern tax organization, as identified by a few participants, is its neutrality/objectivity. This was seen to include being politically non-partisan as well as treating everyone the same way.
With an emphasis mainly on the view that a modern tax organization is technologically-focused, participants tended to characterize the CRA as a modern tax organization/up-to-date, or expressed mixed views about this, including the impression that it is developing in that direction or making an effort to modernize. It is perhaps worth recalling that there was widespread agreement among members of all three audiences that the CRA offers good online services/technology when asked what, if anything, the Agency does well.
Those who expressed mixed views about the CRA as a modern tax organization tended to fall into three groups.
There was widespread, but qualified, support across all audiences for the use of artificial intelligence (AI) by the CRA. Participants routinely recognized that AI is a development that cannot be ignored and that could have beneficial effects when it comes to interacting with the CRA and making service more efficient.
That being said, support for the use of AI was routinely conditional, and premised on its use as a support mechanism rather than a decision-making tool. Specifically, the general consensus was that AI should be used for such things as providing information, research, and assistance (e.g., answering questions), but that it should not be used for making decisions and determining complex issues, such as an audit and eligibility for benefits (which should continue to involve/be subject to human oversight). In addition, even where AI is used in a supportive role, many participants felt that it should be implemented gradually and tested through pilot projects, and that any security-related issues be thoroughly addressed (e.g., protecting personal information) before such systems are implemented.
A few participants did not support the use of AI by the CRA, even in a supportive role, because of concerns or apprehensions that it might not be controllable through human oversight.
Likewise, there was widespread, but conditional support, among taxpayers [4] regarding sharing taxpayer information with other levels of government or government departments to streamline service. Specifically, support for the sharing of information was usually conditional upon getting informed consent from the people in question, making clear what kind of information would be shared and why, and protecting personal information.
All members of the general public involved in this research said they have filed personal income tax returns in the past, including this past tax season (i.e., their 2022 taxes or taxes for a previous year). The proportions of participants who reported doing their taxes on their own or doing so with assistance were similar. Some who said they do their taxes on their own volunteered that they use some form of tax software to assist them.
Those whose taxes are done by someone else typically said they use an accountant or professional tax preparer, though some receive assistance from family members, such as a spouse/partner or parent. Reasons for using an accountant or receiving assistance from someone else included the following:
Nearly everyone said their last return was completed and filed electronically and that this is how they usually do so, i.e., this has not changed in the last few years. Those who file their returns electronically usually explained that they do so for reasons of speed, simplicity, and efficiency. Some said they file electronically because this is the way their accountant/professional tax preparer operates. The few who file their return by paper said they do so out of habit.
Most taxpayers characterized the process of completing and filing their tax returns as easy or relatively easy, and there was a widespread impression that the process has become easier over time (or has not become more difficult). Reasons for this impression included the uncomplicated and/or unchanging nature of one’s tax situation, the use of tax software, the use of an accountant/tax professional, e-filing, and experience/habit.
Reasons for characterizing the process as complicated or difficult usually involved complexities or issues resulting from personal or family circumstances, but also included difficulty keeping track of tax-related documents, finding the correct form(s), and understanding some of the language, terms or expressions used in various forms.
Awareness of My Account for individuals is widespread and most participants are registered users of the service. Frequency of use of the service varies considerably, ranging from rarely (i.e., 2-3 times a year, at tax time only), to occasionally, to often. Some also said they use the service on an ‘as needed’ basis. Reasons for using the service also varied, and included receiving email, tracking refunds, setting up direct deposit, viewing the status of one’s return, viewing/reviewing previous tax returns, checking RRSP limits, viewing notices of assessment, viewing tax information slips, submitting documents, and changing personal information, such as one’s address.
Overall impressions of My Account ranged from positive to very positive. Things that cannot be done on My Account that participants would like to be able to do included a chat function service and file notes documenting a record of interactions with the CRA. It was also suggested that it would be helpful if there could be direct links from My Account to other government programs for which individuals are registered. The example that was offered was the Ontario Student Assistance Program.
The small number of participants aware of My Account but not registered for it could not think of anything that would encourage them to sign up for the service (though neither did they express a clear unwillingness of reticence to do so).
The frequency of contact and/or interactions between representatives of small businesses and the CRA varied considerably, ranging from ‘rarely’, to ‘sometimes’, to ‘often’, to ‘as needed’.
Almost all representatives of small businesses said they use someone outside their business, like an accountant or tax professional, to handle certain interactions or transactions with the CRA. The main reason they do so is because accountants or tax professionals are seen as having professional knowledge/knowledge of the tax system that the business representatives themselves do not. Related to this, it was also often noted that tax-related issues related to their businesses can be complicated. It was also often observed by representatives of small businesses that they do not have the time to devote to such issues and that using outside sources frees them up to focus on their business.
Things that accountants or tax professional do on behalf of small businesses include filing business taxes, filing GST/HST returns, and payroll source deductions.
The most frequently identified ‘biggest’ challenge as a small business when dealing with the CRA was the time it takes to get through to an agent. Another challenge identified relatively frequently was uneven or inconsistent service from CRA agents regarding various issues, i.e., receiving different information/answers from different agents. Other challenges were identified less frequently and included the following:
Intermediaries most often identified one or the other of the following as the biggest challenge they face when dealing with small business clients on tax-related matters: poor record keeping (including incomplete and/or disorganized records/documents) and limited tax-related literacy. The latter, limited tax-related literacy, was seen to result in intermediaries often having to do the following:
Additional challenges included clients bringing matters to their attention at the last minute, inconsistency in business claims, and clients not using software packages for tax-related matters.
Intermediaries collectively identified a variety of things they see as the ‘biggest’ challenges their small business clients face when dealing with the CRA. These included the following:
Asked what the CRA can do to improve its relationship with small businesses, intermediaries identified the following:
The most frequently identified challenge intermediaries said they face when dealing with the CRA is getting through to an agent, specifically the amount of time spent waiting on the phone to speak to an agent. Another frequently identified challenge dealing with the Agency was inconsistency of service, specifically the challenge of getting through to a knowledgeable agent. Other perceived challenges were identified infrequently and included the following:
Only a few intermediaries said they deal with crypto-asset activities or transactions when managing tax affairs for their clients. As a result, most felt they could not provide meaningful feedback on whether or not they have information on how the CRA treats cryptocurrency and tax-related obligations to file for clients with crypto-assets. The few who deal with such activities felt that they do have such information, while a few who do not deal with such activities said they would like to know how such assets are taxed—that is, when it is taxed as income and when it is taxed as a capital gain.
There was a widespread impression that the process of filing business taxes has become easier in recent years, primarily as a result of technology/software/online services. In addition, many representatives of small businesses volunteered that the process is facilitated by the fact that they use accountants/tax professionals. That being said, what has become more complicated to some are new rules/regulations and/or changes to rules/regulations, as well as the use of jargon/unclear language in explaining rules/regulations.
Awareness of My Business Account/Represent a Client is widespread, as is registration for these services. The frequency of use of the service varies widely, with intermediaries more likely to use it frequently than representatives of small businesses. Uses of the service included viewing mail, checking balances, setting up direct deposit, submitting documents, getting tax slips, making payments, and authorizing representatives.
Assessments of the service ranged from positive to very positive. Based on their experience, intermediaries routinely observed that Represent a Client makes the process of meeting client’s tax filing obligations less burdensome because of its speed, ease of use, and comprehensiveness. Things participants would like to see added to this service included a chat function, service notes on file providing a record of interactions with the CRA, the ability to get customized information by sector, such as benefits available to businesses in certain sectors, and auto-complete/pre-filled forms.
A few participants who were aware of the service but not registered for it felt that a tutorial on the service might encourage them to sign up for it.
There was a widespread impression across all audiences that information is safe with the CRA (personal information in the case of taxpayers and business/client information in the case of representatives of small businesses and intermediaries). On occasion, participants conveyed these impressions as a hope or an expectation. Asked if they have any concerns or questions in this regard, no one identified anything specific.
That being said, there was occasionally acknowledgement/recognition that there is always a risk—that is, no system is foolproof/impenetrable and hackers are becoming ever more sophisticated in their campaigns. Beyond this however, participants did not express definite preoccupations about the safety of their information with the CRA.
Asked if their feelings about this have shifted over the years, most participants said they had not. Some said that they have been thinking more about safety of information in general, given the increase of (or increased reporting of) incidents of hacking and identity theft, but that this has not affected their feelings regarding the safety of their information with the CRA. Some said their feelings have changed in the direction of increased confidence regarding the safety of their information. This was either because of their direct encounters/experience with the CRA’s safety measures including two-stage authentication and security questions, or as a result of the impression or assumption that the CRA has increased and/or improved its security measures over time.
Awareness of measures or safeguards used by the CRA to keep taxpayer and business information safe included passwords, use of two-stage authentication, security questions when speaking with an agent (i.e. confirming one’s identify), email warnings/alerts/notifications, communication from the CRA that the Agency will never contact anyone by phone, being asked to verify personal information, e.g., ‘what is the amount on line X in your last tax return’, and being timed-out if one makes repeated mistakes trying to log in to My Account.
Representatives of small businesses and intermediaries were more likely than taxpayers to think CRA does enough to detect and prevent identity theft. Most taxpayers were unsure about this, with many noting that they assume the Agency does or hope it does. Conversely, among representatives of small businesses and intermediaries there was a widespread impression that the CRA does enough to detect and prevent identity theft.
Few participants felt that the CRA does not do enough in this regard. Those who felt this way noted that CRA systems have been hacked/breached in the past. Asked where they would go if they thought their business had been impacted by fraudulent activity surrounding their tax filings or identity with the CRA, representatives of small businesses said they would go to the Agency itself.
Asked if they think the CRA does a good job explaining the way it operates to Canadians (i.e., is it open and transparent about its processes), participants across all audiences were most likely to either say no or that they do not know. Those who felt the CRA does not do a good job in this regard provided the following reasons to explain why they think this.
A few participants were of the opinion that when it comes specifically to security/safety measures, the CRA should not be too open and transparent about its processes. The assumption underscoring this view was that not revealing such measures helps the Agency ensure their effectiveness.
Participants collectively identified a variety of measures they would expect from the CRA in response to vulnerabilities in its databases. Similar measures were identified across all audiences, and routinely included the following:
Asked if they feel more or less confident about the CRA’s ability to keep information safe when the Agency communicates about such events, participants routinely observed that it depends on the way in which the Agency communicates and acts, including taking the kinds of measures identified above. A few said that regardless of how the Agency reacts their confidence in it would be shaken because if its systems had been breached this indicates that there are vulnerabilities. Some explained that their confidence in the Agency would likely be affected by factors such as the following: how quickly the breach was detected, the extent of the breach, the kind of information/data that was compromised, the speed with which the problem is resolved, and the frequency of such events.
Most taxpayers have interacted with the CRA for reasons other than just filing their tax returns over the last few years, with contact usually taking place by telephone. Other means of communication included the Agency’s website, via My Account, in-person/at an office, and by fax, though the website was the only medium other than phone that was identified with any frequency.
Asked how they typically contact the CRA [5], representatives of small businesses and intermediaries routinely identified the telephone, though some also said they also use the website regularly. Common reasons for which representatives of small businesses and intermediaries contact the CRA included tax information, issues related to notices of assessments, delays in processing, errors/mistakes (e.g., account reconciliation, misallocated payments), and payroll issues.
Participants across all three audiences routinely observed that the pandemic has not changed anything in terms of how they contact or interact with the CRA. Those who did identify changes most often pointed to more frequent use of the Agency’s website or a greater likelihood of using the website as a first resort instead of contacting the Agency by phone. Some intermediaries said that since the pandemic they are more likely to consult colleagues or acquaintances for information as a first resort instead of contacting the Agency by phone. It was also noted that since the pandemic it has not been possible for intermediaries to schedule in-person/office meetings with the CRA.
There was interest across all three audiences in the ability to communicate with the CRA via a chat line. Beyond this, very few expressed any thoughts about other ways of interacting with the Agency. Indeed, those who did express other thoughts focused on existing ways of communicating with the Agency. Specifically, a few intermediaries said they would like to be able to meet in person or schedule appointments with CRA agents to discuss specific issues, while a few taxpayers said that when they are on hold waiting to get through to an agent by phone it would be helpful if they could be informed about where they are in the queue.
Asked what service qualities are most important to them when they interact with the CRA, participants across all three audiences most often identified the competence and knowledge of CRA agents and the ability to obtain answers and information promptly, i.e., quick and efficient service. Additional service attributes were also identified with some frequency, either on their own or as linked/associated with the latter. These included the ability to complete transactions in one service interaction and consistency in information (identified on their own or associated with the competence/knowledge of staff), and ease of access (identified on its own or associated with quick/efficient service).
Other service qualities perceived as important were identified less frequently and included the following:
As a follow-up, taxpayers were asked what the CRA could change to make for a smoother/seamless service experience when it comes to managing their taxes and benefits. In response participants identified the following:
Most participants across all three audiences described their overall experience with the CRA as meeting their expectations. The most common reasons given to explain why was that they obtained what they needed and/or did not have any negative service interaction experiences. Some representatives of small businesses and intermediaries added that obtaining what they needed was often made easier through My Business Account/Represent a Client. Some taxpayers explained that their expectations were met because they were not very high to begin with, meaning it does not take much to meet them.
Only a small number of participants described their overall experience as either exceeding or falling short of their expectations.
Overall impressions of CRA staff tended to be mixed. Among taxpayers, impressions of CRA staff were routinely positive, but there was also a relatively widespread impression that service can vary depending on who one is dealing with. Differences in service were usually associated with the agent’s level of knowledge, not their willingness to be helpful, their politeness, or their empathy. That being said, some taxpayers were of the impression that agents could be more proactive when it comes to volunteering information, and a few said they have encountered agents who were impatient, curt, and lacked empathy and understanding.
Most taxpayers felt that following their interactions they were more confident with what they had to do or with the information they were provided, though some added that this took more time and effort than they expected. On the other hand, some said they were not more confident or said their confidence varied depending on the agent with whom they interacted.
Feedback from representatives of small businesses and intermediaries tended to be similar. Impressions of CRA staff were routinely positive when it came to such things as helpfulness, empathy, respect, and politeness (with a few exceptions), but there was a relatively widespread impression that knowledge varies depending on who one is dealing with.
Nearly all participants said they have the impression that CRA’s client service focus has remained about the same, with few describing it either as improving or declining.
Many participants across all three audiences have the impression that the CRA is not doing enough to ensure its services are equally available to all Canadians (or note that they do not think services are equally available). Those who did not hold this view were more likely to say they do not know than to say that the CRA is doing enough in this regard.
Asked why they think the CRA is not doing enough in this regard, participants routinely identified groups or audiences they felt are being underserved. This routinely included the following:
Some taxpayers from northern communities felt that CRA services were not equally available to them. A few representatives of small businesses also felt that the Agency could be doing more to assist small business owners, particularly ones who have recently started a business. Things the Agency could do to address this included the following:
This section reports on compliance-related issues. These issues were explored in 13 focus groups and three in-depth interviews. Topics explored included tax compliance, the underground economy, offshore compliance, and voluntary disclosures and debt repayment.
Representatives of small businesses and intermediaries were asked what the expression ‘compliance’, in the context of Canada’s tax system means to them. The expression brought to mind a variety of things, all of which were identified in one way or another [6] by at least a few participants. These included the following:
There was some difference of opinion between audiences regarding the issue of whether most people pay their fair share of taxes.[7] Taxpayers tended to be divided on this issue between those who felt that they do and those who felt they do not or who have their doubts (a small proportion saying they do not know). Among those who felt that most people do not (or who have doubts about this), some suggested that the likelihood of paying one’s fair share of taxes varies by class/income level, the assumption being that the middle-class carries the main burden when it comes to paying taxes.
Among representatives of small businesses and intermediaries, there was general agreement that it is sound for the CRA to proceed on the assumption that most people will meet their tax obligations (though some thought this also recognised that ‘many’ will try to avoid fully complying with their obligations if they can). Reasons for considering this a sound approach included the following:
Among the small number who do not think this is a sound principle, reasons given to explain why included the impression that people will generally try to avoid paying their full share of taxes if they can, and the impression that more and more people feel they are paying too much in taxes.
As a follow-up to this, taxpayers were asked about the impact, if any, of people not following tax rules and not paying their fair share of taxes. In response, the most frequently identified impacts were an inordinate tax burden placed on others (mainly the middle class), a decline in the nature and quality of public services, and a decline in benefits (e.g., rebates, credits). Other perceived impacts identified infrequently included a general decline in government revenues, growing class divisions and resentments (based on the assumption that it is the rich/wealthy who do not pay their fair share, which leads to growing resentment among members of the middle and lower classes).
For their part, representatives of small businesses and intermediaries were asked, by way of follow-up, what role the CRA should play in helping businesses learn about meeting their tax obligations. In response participants emphasized the CRA’s role in providing information to businesses with a focus on the following:
In addition to having a role in providing information, some representatives of small businesses and intermediaries felt that the CRA also has a compliance role to play in this regard. Specifically …
Although representatives of small businesses and intermediaries see a role for the CRA in helping businesses learn about meeting their business tax obligations, there is virtually no awareness of any products or services offered by the Agency to help businesses comply. Indeed, apart from a general reference to online booklets made by a few intermediaries, no one was able to identify any specific products or services offered by the CRA to help businesses comply.
Asked what types of products or services would be valuable to small businesses, the following were identified (though only the first was identified with any frequency):
Across all three audiences, there were differences of opinion on whether cheating or taking advantage of loopholes is the bigger problem for the rest of Canadians who pay their fair share of taxes.
Some felt that both tax evasion and avoidance are equally problematic. A few specified that the wealthy are more likely to take advantage of loopholes to avoid paying taxes, while those who are not wealthy are more likely to cheat. Some said they do not know which—evasion or avoidance—is the bigger problem.
As a follow-up, taxpayers were asked what factors besides willfully cheating might explain someone not complying with their tax obligations. Various possible reasons were suggested, including the following:
Taxpayers also identified various things that would make it easier to meet one’s tax obligations. These included the following:
There was a widespread impression among taxpayers that validating some COVID-19 benefits payments is a fair thing to do, and there were no evident differences of opinion in this regard between those who had received such benefits and those who had not. A few participants who felt this is not fair volunteered that people who applied for these benefits tend to be people in precarious employment situations and/or low-income earners who needed assistance. It was also suggested that allowance should be made for ignorance about eligibility instead of assuming that everyone who turns out to have been ineligible was deliberately being deceptive in order to benefit from a program for which they did not qualify.
Opinions on the effectiveness of the CRA at finding and addressing issues involving people not paying their fair share of taxes varied across all three audiences. Among taxpayers, the difference of opinion tended to be more clear-cut between those who felt the CRA is effective in this regard and those who felt it is not. Among representatives of small businesses and intermediaries, opinion tended to be more mixed, divided between those who described the Agency as effective, those who described it as ineffective, and those who said they do not know.
Some representatives of small businesses and intermediaries qualified their impression by suggesting that the CRA is effective in this regard if it decides to pursue someone, but that the Agency does not follow this practice uniformly. Specifically, there was an impression that the Agency is effective in pursuing ‘small players’ but not ‘big fish’, as well as an impression that while it is effective at ‘finding’ people who do not pay their fair share of taxes whether it always ‘addresses’ the issue or not is another matter
Opinion also differed as to whether the CRA treats everyone equally when it comes to addressing non-compliance in meeting tax obligations, though most participants in all three audiences felt it does not. Moreover, the most frequently given reason across all audiences for believing that the CRA does not treat everyone equally was the impression that the Agency’s approach varies by class/income level. Specifically, there was a widespread assumption that the CRA tends to focus its compliance/enforcement activities on the middle and lower classes because they are easier to target. On the other hand, the wealthy and powerful were seen as having ways to avoid compliance such as loopholes to exploit and offshore accounts to hide earnings, as well as resources to devote to fighting/challenging the CRA that make it time consuming to go after them.
There was also a sense among some intermediaries (based on their own experience) that CRA agents differ in the way they deal with similar situations—for example, some agents are more lenient while others are more rigid.
Those who felt that the CRA treats everyone equally when it comes to addressing non-compliance in meeting tax obligations provided one or both of two reasons to explain why. First, it is the Agency’s job/mandate to treat everyone equally; that is, the CRA is/should be impartial and rules apply equally to all. Second, they have no reason to think that the CRA does not treat everyone equally when it comes to non-compliance and tax obligations; that is, they have seen or heard nothing that suggests the contrary.
By way of probing on this issue, representatives of small businesses and intermediaries were asked what it would take to make them think that the “big fish” are being adequately targeted and that the CRA is doing enough to make sure they pay their “fair share” of income tax. In response, the following things were routinely identified:
A few suggested that the government of Canada rather than the CRA has to take the lead in this regard by bringing in policies that make it clear that non-compliance by wealthy individuals and corporations will not be tolerated.
Trust in two CRA compliance-related processes was relatively widespread among taxpayers. Specifically, most participants said that if they received a notice from the CRA about a revised/corrected tax return they would trust that it had correctly identified a problem (though they routinely added that they would want evidence of this and/or want to double-check it themselves). Similarly, most taxpayers said they would trust the CRA to conduct an audit accurately and fairly.
Despite widespread trust in the CRA conducting an audit accurately and fairly, nearly all taxpayers said they know little to nothing about audits conducted by the Agency. Awareness about kinds of interventions considered available to the CRA to address non-compliance was relatively widespread and included such things as withholding benefits, credits or rebates, garnishing funds, auditing, prosecuting, adding interest to payments owed, and establishing payments plans.
Taxpayers were asked if they would want to know more about how the CRA enforces tax laws (and whether the Agency’s audit programs are successful), and if such knowledge would increase their trust that the CRA is making sure that everyone is paying their share of taxes.
While many expressed some degree of interest in knowing more about this, the degree of interest tended to be moderate or lukewarm as opposed to strong. The main reasons for wanting to know more were curiosity, and a sense that this would be something it would be good to know more about. A few said that knowing more about this would increase their confidence in the Agency. Those not interested in knowing more about this most often cited lack of interest or reason/need to know more about this. Some explained that this is because they have simple/uncomplicated tax situations, because they are honest people, or because these issues do not affect/apply to them.
Opinion was divided as to whether knowing about the CRA’s enforcement practices would result in greater trust that the CRA is making sure that everyone is paying their share of taxes. A few participants who felt that knowing more would not result in greater trust that the CRA is making sure that everyone is paying their share of taxes explained that such trust could only be increased by knowing that the Agency is implementing its enforcement practices.
Nearly all representatives of small businesses and intermediaries said they do not know whether the CRA improves its enforcement approaches on an on-going basis when it comes to comes to compliance and addressing tax cheating. A small number of participants felt that the Agency does improve its approaches and provided the following in support of their opinion (occasionally specifying that their opinion is based on assumptions rather than knowledge):
There was widespread support among members of these two audiences for the CRA using publicly available information when investigating suspected cases of tax avoidance or evasion. That said, participants routinely added as a caveat that such information needs to be verifiable. In particular, it was suggested that use of information found on social media could be problematic because the medium is conducive to bragging and people often say things on social media that are either untrue or exaggerated.
Most members of these two audiences felt that if they knew about the CRA’s enforcement practices, they would have greater trust that the CRA is making sure that everyone is paying their share of taxes. They differ in this regard from taxpayers who were divided about this issue.
Participants were usually aware of the phenomenon of the underground economy, though some were not aware of it by this designation, and a few confused it initially with the black market. There was also widespread awareness of, and agreement about, types of activities that characterize the underground economy or what it includes. The most frequently provided example of activity in the underground economy was paying cash for goods and services in order to avoid paying taxes. Ways of characterizing this kind of activity or transaction included ‘not declaring revenue’, ‘not charging tax’, ‘providing cash for service’, and ‘non-receipted economic transactions’. In referring to activities in the underground economy, a few participants described them as ‘under the table’ transactions or ‘bartering’, by which was meant providing one kind of service and receiving another in return.
Taxpayers were asked what factors they think contribute to participation in the underground economy in Canada. Factors most often seen to be contributing to participation in the underground economy included increases in the cost of living/difficulty making ends meet economically, the impression that people are always looking for deals (including the possibility of avoiding taxes, if possible), a perception that taxes are too high, and/or a perception that the tax burden falls mainly on members of the lower and middle classes.
Smaller numbers pointed to factors such as anti-government feeling, a feeling that one will not get caught/that there will not be consequences, an impression that it is done in part to help people (i.e., give them a break), and a sense that it is not a big deal and/or a feeling that others are getting away with much worse, such as using offshore tax havens to hide income to avoid paying income tax in Canada.
In the opinion of taxpayers, the main effects of the underground economy include the tax burden being unevenly distributed—specifically, that those participating in the underground economy are not paying their fair share of taxes. This may/does result in a need to increase taxes in order to make up for the shortfall resulting from undeclared economic activity, and/or a reduction in publicly funded services/programs as a result of insufficient public funds to finance them. It was also suggested that one effect of the underground economy could be to increase economic activity, as well as contribute to a general increase in prices as a result of more disposable income.
Representatives of small businesses and intermediaries were asked if certain industries or sectors are more likely to be contributors to the underground economy. There was widespread agreement that this is the case, with the following routinely identified as such industries/sectors:
The most frequently provided reasons to explain why such sectors/industries are more prone to participating in the underground economy included the ability to conduct cash-based transactions, the fact that these tend to be labour-based services, and the fact that they tend to provide services instead of products. All of these were seen as factors that make such transactions difficult to trace/monitor. There was also an impression that these kinds of businesses tend to be smaller and as a result less subject to public regulation and/or public scrutiny.
When it comes to the size of the underground economy, representatives of small businesses and intermediaries are mainly divided between those who think it has grown and those who think it is about the same (with a few saying they think it has shrunk or saying they do not know). The most frequently given reason for thinking it has grown had to do with increases in the cost of living and more people struggling economically to make ends meet or looking to have more disposable income. Reasons identified infrequently included a growing perception that taxes are too high, a growth of anti-government feeling, and a growing feeling that the amount paid in taxes does not translate into an adequate return in terms of benefits and services.
Those who felt that the underground economy has remained about the same usually explained that they have no reason or evidence for thinking it has grown or shrunk, while those who believed it has shrunk pointed to a general decline in cash-based transactions and/or an increasing tendency towards electronic transactions/the digitalized economy which allows for more effective tracking/monitoring of activities. A few added that this tendency towards fewer cash-based transactions and more digital transactions has become more widespread as a result of the pandemic.
Most participants said they believe that participation in the underground economy has become more socially acceptable over time. That said, this belief was more widespread among taxpayers, while there was more difference of opinion about this among representatives of small businesses and intermediaries. Reasons for believing that it has become more socially acceptable to do so included the following:
A few specified that they think it has become more socially acceptable among members of the middle and lower classes, partly as a result of a belief that they pay more than their fair share of taxes while the rich pay less than their fair share.
There was a widespread assumption among members of all three audiences that it is unlikely that people who participate in the underground economy will get caught by the CRA. Reasons routinely provided to explain why included the following:
In addition to these reasons, some felt that it is unlikely that people who participate in the underground economy will get caught because this is not the kind of activity for which people typically denounce others, and because catching them does not seem to be a priority for the CRA (based in part on lack of evidence that resources are being devoted to this issue).
The small number of business representatives and tax intermediaries who thought that it is likely that people who participate in the underground economy will get caught by the CRA usually pointed to the Agency’s growing technological sophistication and analytical capabilities to detect involvement in the underground economy. It was also suggested that certain actors are more likely to get caught than others. This included so-called ‘bigger players’ whose transactions are more likely to be electronically/digitally-based, and those in sectors with a reputation for involvement in the underground economy because of increased monitoring of these sectors.
According to participants, things the CRA can do to effectively deal with the underground economy included the following, though none was identified with any frequency:
Some participants said they do not know what the CRA can do, while others felt that government has to take the lead on this issue. One example included increasing the GST/HST in order to liquidate funds acquired/accumulated through participation in the underground economy.
Asked if they think that reducing participation in the underground economy is a priority for the CRA, virtually all taxpayers either said that they do not think so or that they do not know. The most frequently given reasons for thinking this is not a priority for the Agency were the perception that tracking/monitoring such activities is difficult, that the CRA lacks resources to devote to this, that the Agency probably has other priorities, and lack of any sign/evidence that this is a priority for the Agency. Other reasons were identified infrequently and included the impression that the CRA is too busy dealing with people who do pay their taxes, and that most people pay their taxes which ensures that sufficient tax revenues are still being collected.
Only a few participants recall having heard anything recently in the media about offshore tax havens. Those who do recall something remember hearing about references to financial information/details about offshore accounts in the leaked Panama papers, references to cruise ship companies using offshore accounts, and that $40 billion dollars in Canadian funds is located in tax havens/offshore accounts.
Similarly, very few said they have heard anything about any measures, tools, or projects the CRA has put in place to stop individuals or businesses from hiding their revenue abroad to avoid paying taxes in Canada. The only things heard of include data sharing/cooperation with foreign governments, analysis of data from the Panama papers, and increased efforts at recovering lost tax revenue.
Asked if they think individuals and businesses hiding revenues offshore in tax havens is a big problem or a minor problem, virtually all representatives of small business and intermediaries described it as a big problem, with most of the remaining participants saying they do not know.
When it comes to offshore compliance, intermediaries see the role of tax practitioners as involving the following: being vigilant (i.e., knowing what to be on the lookout for) and compliant, asking clients about offshore assets, advising clients about their responsibilities and the risks involved when it comes to offshore assets, and telling clients what they need to disclose.
Asked if they believe the CRA is doing enough to stop offshore non-compliance, participants either said no or that they do not know. Taxpayers were more likely to say they believe the Agency is not doing enough, while representatives of small businesses and intermediaries were more likely to say they do not know.
Reasons routinely given for thinking the Agency is not doing enough included never hearing anything about such activities, the impression that tax havens are thriving, the impression that the CRA focuses on collecting taxes from those who respect the law, and the impression that the CRA does not treat everyone equally when it comes to compliance (i.e., that it tends to focus its enforcement activities on the middle and lower classes because they are easier to target). It was also suggested by a few participants that there is a lack of political will to go after those who take advantage of offshore tax havens.
Views on what the CRA could do to better address the situation included partnering/data sharing with other countries/jurisdictions, publicizing its successes in recovering lost tax revenues, ‘outing’ companies/individuals who take advantage of tax havens, going after companies/individuals who owe most first, and tougher enforcement in general.
Things participants said they would like to know about CRA activities or efforts to stop individuals and companies from hiding their revenue abroad routinely included the following:
Participants were asked what they think of the CRA’s Voluntary Disclosures Program after being given the following description of it:
The CRA has a program called the Voluntary Disclosures Program. It grants relief on a case-by-case basis to taxpayers who voluntarily come forward to fix errors or omissions in their tax filing before the CRA discovers the issue. By voluntarily reporting, taxpayers avoid legal prosecution or penalty fines that would be applied if the CRA had found the issue, but they must still pay any additional tax owing, plus interest, that results from the correction.
Reactions to the voluntary disclosure program tended to be positive. Perceived benefits routinely included the following:
A few intermediaries described the program as providing assistance to those who have less financial literacy and/or may have been misled or badly advised, and potentially increasing trust/faith in the tax system.
Participants were much more likely to ask questions about the program than identify perceived drawbacks/disadvantages with it (indeed very few identified any drawbacks). Queries included questions about the effectiveness of the program (e.g., the take-up rate), the costs of administering the program, and the likelihood of people using it. One perceived drawback is that it seems to reward those who notice a mistake/error and report it while punishing those who do not notice their error. Another perceived disadvantage was that the program will not address the problem of those who deliberately cheat when it comes to tax-related compliance.
Participants collectively identified a variety of options that should be available to taxpayers when it comes to paying the tax amounts that are owed to the CRA through the program. The most frequently identified option/consideration was the financial situation/ability to pay, with participants occasionally suggesting that this could include accommodations such as repayment plans and lower/preferential interest rates (or none at all).
Other factors that participants felt should be considered routinely included the amounts owed, the reason for the errors, the number of times errors/omissions have happened (i.e., repeat offender versus first time), and prior history of compliance with the CRA. A few representatives of small businesses felt that one option should take into account new versus established businesses, with an emphasis on providing more flexibility for new companies with less knowledge of compliance requirements for businesses.
Taxpayers were not surprised to learn that the CRA does not take a one-size-fits-all approach to paying taxes owed (i.e., that it tailors its approach to the circumstances of individuals), and they also expected the CRA to share this kind of message with Canadians. Despite positive reactions to this practice, awareness of it did not really change anyone’s impression of the CRA.
As was the case with intermediaries with whom service-related issues were explored, only a few intermediaries said they deal with crypto-asset activities or transactions when managing tax affairs for their clients. Moreover, their feedback mirrored that of intermediaries with whom service-related issues were explored. Specifically, most felt they could not provide meaningful feedback on whether or not they have information on how the CRA treats cryptocurrency and tax-related obligations to file for clients with crypto-assets.
The few who deal with such activities felt that they do have such information (it being noted that there is a very good article on the CRA website). A few who do not deal with such activities said they would like to know how such assets are taxed, as well as examples/cases/scenarios that can present themselves when dealing with crypto-asset activities or transactions.
|
Language |
Method |
Location |
Audience |
Guide Focus |
|---|---|---|---|---|
|
English |
In person |
Halifax |
Taxpayers |
Service |
|
English |
In person |
Halifax |
Taxpayers |
Compliance |
|
English |
Online |
Atlantic |
SMEs |
Compliance |
|
English |
Online |
Atlantic |
Tax intermediaries |
Compliance |
|
French |
In person |
Montreal |
Taxpayers |
Service |
|
French |
In person |
Montreal |
Taxpayers |
Compliance |
|
French |
In person |
Montreal |
SMEs |
Service |
|
French |
In person |
Montreal |
SMEs |
Compliance |
|
French |
In person |
Montreal |
Tax intermediaries |
Service |
|
French |
In person |
Montreal |
Tax intermediaries |
Compliance |
|
English |
In person |
Toronto |
Taxpayers |
Service |
|
English |
In person |
Toronto |
Taxpayers |
Compliance |
|
English |
In person |
Toronto |
SMEs |
Service |
|
English |
In person |
Toronto |
SMEs |
Compliance |
|
English |
In person |
Toronto |
Tax intermediaries |
Service |
|
English |
Online |
Toronto |
Tax intermediaries |
Compliance |
|
English |
In person |
Calgary |
Taxpayers |
Service |
|
English |
In person |
Calgary |
Taxpayers |
Compliance |
|
English |
Online |
West |
SMEs |
Service |
|
English |
Online |
West |
Tax intermediaries |
Service |
|
English |
Online |
Remote |
Taxpayers |
Service |
|
French |
Online* |
Remote |
Taxpayers |
Mix** |
|
English |
Online |
Remote |
SMEs |
Service |
|
English |
Online |
Remote |
SMEs |
Compliance |
|
English |
Online |
Remote |
Tax intermediaries |
Service |
|
English |
Online |
Remote |
Tax intermediaries |
Compliance |
*Five in-depth interviews were conducted instead of a focus group due to challenges associated with recruiting French-speakers outside of Quebec.
** Three in-depth interviews were conducted using the compliance guide and two were conducted using the service guide.
Context of Qualitative Research
Qualitative discussions are intended as moderator-directed, informal, non-threatening discussions with participants whose characteristics, habits and attitudes are considered relevant to the topic of discussion. The primary benefits of individual or group qualitative discussions are that they allow for in-depth probing with qualifying participants on behavioural habits, usage patterns, perceptions and attitudes related to the subject matter. This type of discussion allows for flexibility in exploring other areas that may be pertinent to the investigation. Qualitative research allows for more complete understanding of the segment in that the thoughts or feelings are expressed in the participants’ “own language” and at their “own levels of passion.” Qualitative techniques are used in marketing research as a means of developing insight and direction, rather than collecting quantitatively precise data or absolute measures. As such, results are directional only and cannot be projected to the overall population under study.
Hello/Bonjour, my name is [INSERT]. I’m calling from Phoenix Strategic Perspectives, a Canadian public opinion research firm. Would you prefer to continue in English or French? / Préférez-vous continuer en français ou en anglais?
[INTERVIEWER NOTE: If someone is asking to participate in French/English but no IN-pERSON group in this language is available, CONSIDER RECRUITING THEM FOR GROUP 5 OR 6 – THe ONLINE SESSIONS.]
We are organizing a series of discussion groups on behalf of the Government of Canada to explore various issues of importance to the country. We are not trying to sell you anything. I would like to speak to the person in your household who is a Canadian citizen or permanent resident and is at least 18 years old. Would that be you?
01. Yes [CONTINUE]
02. No [ASK TO SPEAK TO SOMEONE IN THE HOUSEHOLD WHO MEETS THESE CRITERIA]
CONTINUE WHEN CONNECTED TO SOMEONE 18+, WHO IS A CANADIAN CITIZEN OR A PERMANENT RESIDENT WHO HAS RESIDED IN CANADA SINCE 2020 OR EARLIER:
As I mentioned, we’re randomly recruiting Canadians to take part in one of these discussion groups. The format is a discussion with up to eight people. The group will take place in the evening, and it will last no more than 90 minutes. People who take part will receive an honorarium of $100 to thank them for their time.
Participation is voluntary and your decision to participate will not affect any dealings you may have with the Government of Canada. We are interested in hearing your opinions; no attempt will be made to sell you anything or change your point of view. The format is a “round table” discussion lead by a research professional from Phoenix Strategic Perspectives. All opinions expressed will remain anonymous and views will be grouped together to ensure no particular individual can be identified in accordance with laws designed to protect your privacy.
NOTES:
EN: https://www.canadianresearchinsightscouncil.ca/rvs/home/
FR: https://www.canadianresearchinsightscouncil.ca/rvs/home/?lang=fr
[WHEN TERMINATING A CALL WITH SOMEONE, SAY: Thank you for your cooperation. We already have enough participants who have a similar profile to yours, so we are unable to invite you to participate.]
SCR1. Do you or a member of your immediate family work or have you ever worked for ...? [READ LIST]
SCR2. Are you a Canadian citizen or permanent resident at least 18 years old?
SCR2B. [IF A PERMANENT RESIDENT] For how long have you been living in Canada?
SCR3. And, have you been living in Canada for the last 12 months?
SCR4. In which province or territory do you live?
SCR5. [IF SCR4 = 02, 05, 06, 10; GROUPS 1, 2, 3, 4, 7, 8, 19, 20 ONLY] In which city or town do you live?
*And surrounding areas—e.g., Mississauga—as appropriate.
SCR6. [IF SCR5 = 05, 06 OR SCR4 = 01, 03, 04, 07, 08, 12; GROUPS 5 AND 6 ONLY] What are the first three digits of your postal code?
SCR7. [IF SCR6 = 01] How far away is the nearest city of at least 100,000 people?
SCR8. Have you ever attended a discussion group or taken part in an interview on any topic that was arranged in advance and for which you received money for your participation?
SCR9. When did you last attend one of these discussion groups or interviews?
SCR10. How many discussion groups have you attended in the past 5 years?
[WHEN TERMINATING A CALL WITH SOMEONE, SAY: Thank you for your cooperation. We already have enough participants who have a similar profile to yours, so we are unable to invite you to participate.]
1. For each of the following statements, I would like to know how much you agree or disagree. Please respond using a scale of 1 to 10 where 1 means you strongly disagree and 10 means you strongly agree. How about …
a. Considering the services we receive from the federal government, the public pays too much federal income tax.
b. The CRA would never find out about income received in cash that is not declared on their tax return.
c. Given the opportunity most people would hide income to avoid taxes.
|
INTERVIEWER NOTE: For Compliance Groups (2, 3, 5, 8, 19) Score of LOW on at least 2 of 3 at Q1a-c: RECRUIT MINIMUM 3 PER GROUP Score of HIGH on at least 2 of 3 Q1a-c: RECRUIT MINIMUM 3 PER GROUP |
[WHEN TERMINATING A CALL WITH SOMEONE FOR THESE QUESTIONS, SAY: Thank you for your cooperation. Based on your responses, we are unable to invite you to take part in this online focus group, as you do not meet the technical requirements. We thank you for your interest in this research.]
[WHEN TERMINATING A CALL WITH SOMEONE, SAY: Thank you for your cooperation. We already have enough participants who have a similar profile to yours, so we are unable to invite you to participate.]
Participants in group discussions are asked to voice their opinions and thoughts. How comfortable are you in voicing your opinions in front of others? [READ LIST] [RECRUIT A MIX IN ALL GROUPS]
Now I have a few questions that relate to privacy, your personal information, and the research process.
[WHEN TERMINATING A CALL WITH SOMEONE FOR THESE QUESTIONS, SAY: Thank you for your cooperation. Based on your responses, we are unable to invite you to take part in these focus groups, as you do not meet the study requirements. We thank you for your interest in this research.]
Great! You qualify to participate in one of our focus groups.
[GROUPS 5 + 6]
May I have your email address so that we can send you an email message with the information you will need about
the online focus group?
ENTER EMAIL ADDRESS: ____________________
Information regarding how to participate will be sent to you by email in the coming days. The email will come from Phoenix SPI and the address will be research@phoenixspi.ca. The group discussion will begin promptly at <TIME> and will end at <TIME>, and last up to 90 minutes. Please log in 5-10 minutes before the start time to ensure that the session is not delayed for any reason. If you arrive late, we may not be able to include you in the discussion and you may not provide you with the incentive.
[GROUPS 1-4, 7-8, 19-20]
The group discussion will begin promptly at <TIME> and will end at
<TIME>, and last up to 90 minutes. It will be held at <FACILITY NAME AND
ADDRESS>. Please arrive at the facility 5-10 minutes before the start time to ensure that the
session is not delayed for any reason. If you arrive late, we may not be able to include you in the discussion
and you may not provide you with the incentive.
At the focus group facility, you will be asked to produce photo identification, so please remember to bring something with you (for example, a driver’s license). In order to participate, you will also be asked to sign a consent form, which we will be available at the facility upon your arrival.
If you use glasses to read, please bring them with you.
[EVERYONE]
As we are only inviting a small number of people to attend, your participation is very important to us. If for
some reason you are unable to attend, please call us so that we can get someone to replace you. You can reach us
at [INSERT NUMBER] at our office. Please ask for [INSERT NAME].
Someone will call you the day before to remind you about the session. So that we can call you to remind you about the focus group or contact you should there be any changes, can you please confirm your name and contact information for me?
First Name: _______________________________________________
Last name: _______________________________________________
Daytime phone number: _______________________________________________
Evening phone number: _______________________________________________
2.1.2: Small Businesses and Tax Intermediaries
Hello/Bonjour, my name is [INSERT]. I’m calling from Phoenix Strategic Perspectives, a Canadian public opinion research firm. Would you prefer to continue in English or French? / Préférez-vous continuer en français ou en anglais?
First off, let me assure you that we are not trying to sell you anything. We are organizing a series of discussion groups on behalf of the Government of Canada to explore various issues of importance to the country.
INTERVIEWER NOTE: IF THE PERSON YOU REACH IS A GATEKEEPER, ASK TO BE TRANSFERRED TO SOMEONE DIRECTLY INVOLVED IN PREPARING AND FILING RETURNS FOR CLIENTS (E.G. ACCOUNTANT, TAX PREPARER) AND BEGIN AGAIN.
As I mentioned, we’re conducting a research study for the Government of Canada. About six to eight people will take part in each discussion group, all of them randomly recruited like you. The group will take place in the evening, and it will last no more than 90 minutes. People who take part will receive a cash honorarium to thank them for their time.
Participation is voluntary and your decision to participate will not affect any dealings you may have with the Government of Canada. We are interested in hearing your opinions; no attempt will be made to sell you anything or change your point of view. The format is a “round table” discussion lead by a research professional from Phoenix Strategic Perspectives. All opinions expressed will remain anonymous and views will be grouped together to ensure no particular individual can be identified in accordance with laws designed to protect your privacy.
NOTES:
EN: https://www.canadianresearchinsightscouncil.ca/rvs/home/
FR: https://www.canadianresearchinsightscouncil.ca/rvs/home/?lang=fr
[WHEN TERMINATING A CALL WITH SOMEONE, SAY: Thank you for your cooperation. We already have enough participants who have a similar profile to yours, so we are unable to invite you to participate.]
2a) [TAX INTERMEDIARIES] Which of the following services do you provide to clients? [READ LIST]
GROUP 13-14, 21-26 ONLY
[WHEN TERMINATING A CALL WITH SOMEONE FOR THESE QUESTIONS, SAY: Thank you for your cooperation. Based on your responses, we are unable to invite you to take part in this online focus group, as you do not meet the technical requirements. We thank you for your interest in this research.]
[WHEN TERMINATING A CALL WITH SOMEONE, SAY: Thank you for your cooperation. We already have enough participants who have a similar profile to yours, so we are unable to invite you to participate.]
CONSENT
Now I have a few questions that relate to privacy, your personal information, and the research process.
[WHEN TERMINATING A CALL WITH SOMEONE FOR THESE QUESTIONS, SAY: Thank you for your cooperation. Based on your responses, we are unable to invite you to take part in these focus groups, as you do not meet the study requirements. We thank you for your interest in this research.]
INVITATION TO PARTICIPATE
Great! You qualify to participate in one of our focus groups.
[GROUP 13-14, 21-26]
May I have your email address so that we can send you an email message with the information you will need about
the online focus group?
ENTER EMAIL ADDRESS: ____________________
Information regarding how to participate will be sent to you by email in the coming days. The email will come from Phoenix SPI and the address will be research@phoenixspi.ca. The group discussion will begin promptly at <TIME> and will end at <TIME>, and last up to 90 minutes. Please log in 5-10 minutes before the start time to ensure that the session is not delayed for any reason. If you arrive late, we may not be able to include you in the discussion and you may not provide you with the incentive.
[GROUPS 9-12, 15-18]
The group discussion will begin promptly at <TIME> and will end at
<TIME>, and last up to 90 minutes. It will be held at <FACILITY NAME AND
ADDRESS>. Please arrive at the facility 5-10 minutes before the start time to ensure that the
session is not delayed for any reason. If you arrive late, we may not be able to include you in the discussion
and you may not provide you with the incentive.
At the focus group facility, you will be asked to produce photo identification, so please remember to bring something with you (for example, a driver’s license). In order to participate, you will also be asked to sign a consent form, which we will be available at the facility upon your arrival.
If you use glasses to read, please bring them with you.
[EVERYONE]
As we are only inviting a small number of people to attend, your participation is very important to us. If for
some reason you are unable to attend, please call us so that we can get someone to replace you. You can reach us
at [INSERT NUMBER] at our office. Please ask for [INSERT NAME].
Someone will call you the day before to remind you about the session. So that we can call you to remind you about the focus group or contact you should there be any changes, can you please confirm your name and contact information for me?
First Name: _______________________________________________
Last name: _______________________________________________
Daytime phone number: _______________________________________________
Evening phone number: _______________________________________________
Introduction [5 minutes]
Overall Impressions [20 minutes]
As I mentioned, this evening we’re going to be talking about Canada’s tax system and the Canada Revenue Agency or the CRA.
Here’s a brief description of what the CRA does…so we have shared understanding:
The CRA is the agency of the federal government responsible for administering tax, benefits, and related programs, as well as ensuring compliance. In this role, the CRA collects income tax and delivers benefits and tax credits to Canadians, like the Canada Child Benefit Program and the GST/HST rebate. What the CRA doesn’t do is set the level of taxation or tax rates; it has no role in determining how much tax is paid by Canadians. The CRA only administers the tax system.
Service Segment: 60 minutes
A. Modernization [15 minutes]
The world in which we live is constantly changing with the rise of mobile communications, social media, the gig and sharing economies, and the even more recent developments in Artificial Intelligence or AI. As the administrator of Canada’s tax system, the CRA recognizes that it needs to be responsive to a changing world.
IF NEEDED: AI is generally understood as the simulation of human intelligence by machines…a computer system designed to quickly learn, reason, and make decisions by imitating human thinking.
B. Income Tax Filing and Online Services [15 minutes]
Now we’re going to change topics and spend a few minutes talking about tax filing. I’m interested in learning a bit more about the process that you go through each year when you do your taxes.
My Account is a secure portal that lets you view your personal income tax and benefit information and manage your tax affairs online.
IF REGISTERED USER:
IF AWARE BUT NOT REGISTERED:
C. Protection of Personal Information [15 minutes]
The protection of taxpayer and personal information is a priority for the CRA.
Earlier in the discussion, I asked about trust in the CRA [IF RELEVANT: and some of you mentioned data breaches]. Occasionally, the CRA has encountered vulnerabilities with its tax databases. Some of you might recall the “Heartbleed” incident a few years ago or the suspension of some online CRA accounts when login credentials were found on the dark web…
D. Service Experiences [15 minutes]
The last thing I’d like to talk about is your recent service experience with the CRA.
IF RELEVANT: Some of you have been in touch with the CRA by mail or have asked to receive forms or guides by mail. If these documents were available through the CRA website or through My Account, would you access them through one of these options or would you still request that a printed copy be mailed to you? IF PRINT IS PREFERRED, ASK WHY.
Thinking about all times you interacted with the CRA over the past few years…
Compliance Segment: 60 minutes
As we talked about, one the CRA’s responsibilities is ensuring compliance with Canada’s tax system. For the remainder of this session, we’re going to discuss the tax system and compliance-related issues…
A. Tax Compliance [10 minutes]
B. Enforcement and Transparency [15 minutes]
Focusing on audits for a moment, I know the idea of being audited by the CRA can instill fear and anxiety in some people.
C. Underground Economy [15 minutes]
Let’s move on to another issue.
IF NEEDED: Clarify the difference between the ‘black market’ and ‘underground economy’. Black market refers to illegal business activities and underground economy to legal business activities that are not reported for tax purposes.
According to the CRA, the underground economy includes economic transactions which are unreported and/or underreported, resulting in failure to comply with tax laws. Concretely, this could be paying cash for a service to avoid paying the sales tax or selling products or services that you don’t report on your income taxes.
D. Offshore Compliance [10 Minutes]
We just talked about one way that some people avoid paying taxes… Now I want to move on to a related topic…
[IF NEEDED, EXPLAIN: Offshore tax havens are countries or places with low or no corporate taxes that allow non-residents to set up businesses. Tax havens also typically limit public disclosure about companies and their owners. This makes them attractive for Canadian taxpayers or companies wanting to hide their revenue to avoid paying income tax in Canada.]
E. Voluntary Disclosures and Debt Payment [10 minutes]
The CRA has a program called the Voluntary Disclosure Program. It grants relief on a case-by-case basis to taxpayers who voluntarily come forward to fix errors or omissions in their tax filing before the CRA discovers the issue. By voluntarily reporting, taxpayers avoid legal prosecution or penalty fines that would be applied if the CRA had found the issue, but they must still pay any additional tax owing, plus interest, that results from the correction.
We are now at the end of the discussion. Those are all the questions I have. Is there anything you would like to add? Do you have any last comments or suggestions about anything we have discussed tonight?
Mention final report from the research will be available through Library and Archives in about 6 months.
On behalf of the CRA, I would like to thank you for your time and participation this evening.
Overall Impressions [20 minutes]
As I mentioned, this evening we’re going to be talking about Canada’s tax system and the Canada Revenue Agency or the CRA. What you have in common is that you are all [decision-makers for a small business/tax professionals who work with individuals and small business clients on tax-related or payroll matters]. And it is in this capacity, your professional capacity, that we would like to explore various issues with you. ON AN AS-NEEDED BASIS THROUGHOUT THE SESSION, REMIND PARTICIPANTS THAT THE FOCUS IS ON THE BUSINESS SIDE OF THEIR INTERACTIONS WITH THE CRA.
As is sometimes the case with individuals, organizations can acquire a ‘reputation’. Leaving aside the question of whether that reputation is fair or not …
Service Segment: 60 minutes
A. Modernization [15 minutes]
The world in which we live is constantly changing with the rise of mobile communications, social media, the gig and sharing economies, and the even more recent developments in Artificial Intelligence or AI. As the administrator of Canada’s tax system, the CRA recognizes that it needs to be responsive to a changing world.
B. Tax Filing and Online Services [15 minutes]
Now we’re going to talk in more detail about business tax filing and your interactions with the CRA.
SMEs:
INTERMEDIARIES:
As you probably know, cryptocurrency is a relatively new phenomenon which has tax-related implications.
ALL:
IF REGISTERED USER:
IF NO:
C. Protection of Personal Information [15 minutes]
The protection of taxpayer and personal information is a priority for the CRA.
PROMPT IF NEEDED: two-stage authentication, account alerts (email notifications).
SMEs:
ALL:
Occasionally, the CRA has encountered vulnerabilities with its tax databases. Some of you might recall the “Heartbleed” incident a few years ago or the suspension of some online CRA accounts when people’s login credentials were found on the dark web…
D. Service Experiences [15 minutes]
The last thing I’d like to talk about is your recent service experience with the CRA.
Thinking about all times you interacted with the CRA [INTERMEDIARIES: on behalf of your clients] over the past few years…
Compliance Segment: 60 minutes
For the remainder of this session, we are going to discuss compliance-related issues, but before doing so I would like to ask you a general question about Canada’s tax system.
A. Tax Compliance [25 minutes]
Turning to the CRA now,
IF YES:
B. Underground Economy [15 minutes]
As you may be aware, there is something called the underground economy. A good example of this is a company that does not charge sales tax for goods or services specifically to avoid declaring it as business revenue.
IF NEEDED: Clarify the difference between the ‘black market’ and ‘underground economy’. Black market refers to illegal business activities and underground economy to legal business activities that are not reported for tax purposes.
Research conducted for the CRA in 2021-2022 found that [SMEs: 30% of small and medium-sized enterprises/INTERMEDIARIES: 50% of tax intermediaries] felt that the CRA’s efforts to reduce income tax cheating by businesses are effective.
C. Offshore Compliance [15 Minutes]
We just talked about one way that some people avoid paying taxes… Now I want to move on to a related topic…
[IF NEEDED, EXPLAIN: Offshore tax havens are countries or places with low or no corporate taxes that allow non-residents to set up businesses. Tax havens also typically limit public disclosure about companies and their owners. This makes them attractive for Canadian taxpayers or companies wanting to hide their revenue to avoid paying income tax in Canada.]
INTERMEDIARIES:
D. Voluntary Disclosures and Debt Payment [5 minutes]
[INTERMEDIARIES: As some of you may be aware,] The CRA has a program called the Voluntary Disclosure Program. It grants relief on a case-by-case basis to taxpayers who voluntarily come forward to fix errors or omissions in their tax filing before the CRA discovers the issue. By voluntarily reporting, taxpayers avoid legal prosecution or penalty fines that would be applied if the CRA had found the issue, but they must still pay any additional tax owing, plus interest, that results from the correction.
E. INTERMEDIARIES ONLY Cryptocurrency [5 minutes—time permitting]
As you probably know, cryptocurrency is a relatively new phenomenon which has tax-related implications.
Service and Compliance Segments: 5 minutes
Conclusion
We are now at the end of the discussion. Those are all the questions I have. Is there anything you would like to add? Do you have any last comments or suggestions about anything we have discussed tonight?
Mention final report from the research will be available through Library and Archives in about 6 months.
On behalf of the CRA, I would like to thank you for your time and participation this evening.
[1] The ACR was not conducted in 2012, 2014 and 2015.
[2] All members of the general public were asked how they would describe Canada’s tax system, but among representatives of small businesses and tax intermediaries this question was asked only in groups where the focus was on compliance-related issues.
[3] Members of the general public were also asked if they received COVID-19 benefits administered by the CRA to provide temporary income support to eligible Canadians. In response, only a relatively small number reported having received these benefits.
[4] Representatives of small businesses and intermediaries were not asked about this.
[5] Members of the general public were asked about the various ways they have contacted the Agency over the last few years, whereas representatives of small businesses and intermediaries were asked how they typically contact the Agency.
[6] This means that participants may have used different terms or expressions to refer to the same phenomenon.
[7] The wording of the questions used to explore this issue differed between audiences. Members of the general public were asked the following question: The income tax Canadians pay is based on the amount of income they voluntarily disclose to the Government. Do you think that most people follow tax rules and pay their fair share of taxes? Representatives of small businesses and intermediaries were asked the following question: The CRA approaches its work with the underlying premise that most people, given the opportunity and the right services, will meet their tax obligations. Do you believe this is a sound approach? Why or why not?