MINUTES OF THE NATIONAL UNION-MANAGEMENT CONSULTATION COMMITTEE MEETING BETWEEN THE CANADA REVENUE AGENCY (CRA) AND

THE AUDIT, FINANCIAL AND SCIENTIFIC (AFS) GROUP

MAY 18, 2017

OPENING REMARKS

The Commissioner welcomed everyone to the meeting and said that he was happy to have the opportunity to meet with the Audit, Financial and Scientific (AFS) Group to talk about issues that were important to the union and the Agency. The National Union-Management Consultation Committee (NUMCC) meetings were only one element of consultation; discussions at all levels and across all regions were also important.

He recognized the value of strong working relationships and the importance of open and constructive discussions. He noted that there were tremendous opportunities for management and the union to work together to address challenges. He said that the meetings with the AFS Group National President and Vice President in advance of the NUMCC meeting provided an opportunity to get to know each other, as well as talk through some issues that were of concern to the union.

The Commissioner had experienced his first tax season with the Agency and was extremely pleased with its success. Over 25 million T1 returns had been filed, of which approximately 87% had been filed electronically, and there were over 17 million log-ons to My Account. The Agency continued to make progress every year in finding innovative ways to better serve Canadians.

Since his arrival, the Commissioner had travelled across the country, meeting people in every province and the majority of the larger offices. He was impressed with the passion, enthusiasm, and dedication of the Canada Revenue Agency (CRA) employees. He preferred to meet employees in small groups as it provided an opportunity to talk to everyone. Both he and the new Deputy Commissioner were committed to working together to maintain a connection with employees across the country. He stressed the importance of a good relationship at the NUMCC table, noting that a positive rapport helped maintain the relationship during times when there were difficult issues to work through.

The AFS Group President said he was happy to have senior management at the NUMCC table. He took the opportunity to express disappointment with the progress of bargaining, specifically, that new dates had not been scheduled. He added that the AFS Group was available and willing to meet with management during the summer months. The AFS Group negotiator added that they intended to get a deal that was satisfactory for everyone.

BUDGET 2017

Management explained that Budget 2017 included several themes, such as: closing tax loopholes, continuing to crack down on tax evasion and combat tax avoidance, making existing tax relief for individuals and families effective and accessible, and eliminating inefficient and ineffective tax measures.

From a legislative perspective, some proposed measures relevant to the CRA included allowing nurse practitioners to certify eligibility for the Disability Tax Credit, consolidation of three different caregiver credits, and some expansion of the tuition tax credit. A few of the more obscure measures were eliminated, the most well-known being the public transit credit. Businesses could now issue electronic T4s to employees without obtaining their consent, under certain conditions. Two key commodity tax changes pertained to ride sharing services in order to level the playing field with traditional taxi services, and increases of the excise duty rates for tobacco, beer, spirits, and wines.

In terms of funding, the Agency received $523.9 million (M), over a 5 year period, to tackle non-compliance and tax avoidance activities. This was an extension to the $444 M received in 2016, and would allow the Agency to extend certain measures, make other initiatives ongoing, and introduce new measures to continue to tackle tax evasion and non-compliance. The funding was contingent upon approval of the TBS submission. Once approved, the Budget funding would be tabled as part of the supplementary estimates in the fall. The expected revenue target from Budget 2017 was $2.5 billion over 5 years.

The CRA launched a new annual resource alignment process to review funding allocations to programs in order to ensure they were aligned with Agency priorities. This annual priority setting exercise would enable the Agency to be more nimble, and ensure that it was investing its resources in the appropriate areas. Management would update the AFS Group on this process in the fall.

The AFS Group asked if funds from Budget 2016 had been distributed to the regions. Management confirmed that the regions had received the funding. This year’s share of the Budget 2016 funding was $140 M, which accounted for 1400 full-time equivalents (FTEs) by the close of the fiscal year, and 90% of the staffing was completed. Management emphasized that funding from Budget 2016 would be received over 5 years and supported 3 large areas: service enhancements, strengthening collection activities, and enhancing efforts to crack down on tax evasion and combat tax avoidance.

The AFS President stated that CRA needs to retain auditors, IT and other specialized professionals through fair compensation. The union requested additional information regarding the Budget 2017 funding allocation, in order to address questions from their members. Management agreed.

CHANGES IN THE INTERNATIONAL, LARGE BUSINESS AND INVESTIGATIONS BRANCH

Management provided an overview of the impact of Budgets 2016 and 2017 on the International, Large Business and Investigations Branch (ILBIB). He said that funds were also distributed to the Domestic Compliance Programs Branch, Collections and Verifications Branch, as well as the corporate branches.

In the 2016 Federal Budget, ILBIB received $103 million in direct program funding over 5 years. By year 5, this would represent 290 FTEs on an ongoing basis. In the 2017 Federal Budget, ILBIB would receive $94 million in direct program funding over 5 years. By the 5th year, this would represent an additional 260 FTEs on an ongoing basis. Approximately 35% of the funds allocated to ILBIB would be invested in systems and computer enhancements, such as tools to select and conduct audits. The remaining 65% would be divided between large audit files, aggressive tax planning, offshore tax evasion, and the Criminal Investigations Program.

Management stated that the revenue impact of $13 billion had increased more than 30% over 4 fiscal years and they attributed this to the CRA’s strong and dedicated workforce. For 2016-2017, ILBIB generated 125% of its annual tax earned by audit (TEBA) target, approximately $130 million more than the target. Management said that they were also considering a complement to TEBA, such as a tax assured indicator, for files that were audited but did not result in a reassessment.

Management reinforced the importance of external recruiting in order to address the demographic shift as employees retired. Management emphasized that they continued to work hard to hire the right people. He acknowledged the union’s concerns about external hiring. The new employees would add to the CRA’s team of multi-disciplinary tax professionals and management would continue to invest in training for new and existing employees. To be a world-class tax administration, the CRA needed diverse teams of capable professionals, and in some cases, that would include external hiring. The AFS Group said that their objective was to ensure that their experienced, knowledgeable staff were considered and not overlooked.

The AFS Group asked if the performance indicators in the Quebec region were adjusted to reflect that the GST was collected by the province in Quebec. Management responded that the funds were allocated by program so the funding calculation did not penalize the Quebec region.

SERVICE CULTURE

The Commissioner said that he wanted the CRA to become a world-class tax and benefit administration. He noted that the CRA had received significant funding in the last budget and this was a recognition of the work of all employees. He stressed the importance of respectful conversations that would educate taxpayers. A culture of service embedded in all CRA activities would emphasize integrity and fairness.

The Champion said that there were many elements involved with improving the infrastructure and design of the CRA’s services, including e-interactions, correspondence, and telephony. Recently, the focus had shifted from infrastructure to the CRA’s culture with the goal of supporting changes needed so that compliance and service could co-exist equally.

Management explained that they had started to engage various stakeholders in the Agency to discuss the commitment to serving Canadians and what it meant. A planned internal survey of over 12,000 employees would establish a baseline of the CRA’s service culture. In late summer and early fall, management would establish design teams to develop a vision of how to evolve service and the service culture. Management stated that the employees’ reactions to date had been positive. For example, auditors saw their work as serving Canadians and recognized the service component of their work as key to obtaining sustained compliance over time.

The AFS Group President stressed the importance of understanding that the CRA was an enforcement agency and taxpayers had not chosen to be customers. He emphasized the importance of treating all taxpayers with professionalism and respect. The Commissioner responded that there may be times when explaining the steps that were being taken or showing the taxpayer the work that was being done would help to sustain a long term compliance relationship. He recognized that there could be value in gathering suggestions and feedback from the AFS Group with respect to measuring success in building long term relationships and establishing a balanced approach of service and compliance. It was important to identify how the CRA’s incentives and measurements could better support a balanced approach. The AFS Group responded that they would be interested in consulting if such a request was made.

CRA RECRUITMENT STRATEGY

The Assistant Commissioner (AC) from the Prairie Region said that she was pleased to be an Agency Recruitment Champion with her colleague, the AC of Appeals Branch. She explained that the CRA’s Recruitment Strategy addressed the demographic realities of the Agency, with a third of the workforce eligible to retire over the next five years. As there was not a sufficient feeder group of internal employees to replace these employees, the strategy emphasized renewal with the recruitment of students, recent graduates, and mid-career employees. This would enhance diversity in the workforce, while striking a balance between internal staffing and external recruitment, and maintaining an optimal number of opportunities for internal employees.

Management described some of the actions taken over the past year, such as recruiting student brand ambassadors to promote the CRA on campuses and at recruitment events, and hiring strategic recruitment advisors in each region. Next steps would involve leveraging best practices across the country, and using a toolkit to reach out in the most effective way. Management explained that several areas had successfully developed partnerships with professional associations and other organizations in order to recruit the best candidates.

The Director General, Employment Programs Directorate, thanked the Agency Recruitment Champions for their efforts and highlighted the work on the Agency’s brand. New recruitment handouts and a two-minute professional recruitment video had been launched, and the external Careers website had been revamped. Management also leveraged the CRA’s recognition as a Top Employer in the National Capital Region and a Top Employer for Young People in Canada for the fourth year in a row to promote the CRA as an employer of choice. This brand was promoted on the CRA’s expanded social media presence and on the external Government of Canada websites.

Management noted that they would increase the CRA’s external recruitment efforts and balance internal recruiting to ensure that the Agency was well-positioned to meet the changing demographics and investments in the compliance sector. Management said that they would continue successful practices, such as the AU Development Program, as well as regionally-led staffing and recruitment initiatives.

The AFS Group President stated the CRA had reduced the number of experienced and knowledgeable staff in small and mid-sized offices. The numbers gathered by the AFS Group showed a continuing decline over the last six years. In the last year, the workforce adjustment process had been used to accelerate this process. From 2010 to 2016, the AFS Group had seen membership decline in small to mid-sized offices. The AFS Group listed the specific offices impacted and said this created tax-free zones, inconsistent with the goals of the Agency. The Commissioner said that the CRA was trying to better integrate its activities, while making the best use of its resources.

The AFS Group President said the union had seen an increased use of staffing without solicitation, without guidance or additional controls. He said the union was anxious to review the Job-aid for Non-Advertised Staffing Processes as soon as possible.

Business transformation in charities

Management provided information about the Charities IT Modernization Project (CHAMP), which would enable charities to register and file their annual returns online. Budget 2014 had provided $23 million in funding to support the required IT systems improvements. Management anticipated that the system updates would be operational in November 2018; the project had met all timelines to date. Management was also optimizing processes to focus less on administrative tasks. They did not anticipate a change in their permanent workforce, including members of the AFS Group.

Respectful Workplace and well-being strategy

Management said that a working group under the National Health and Safety Policy Committee (NHSPC) had conducted a gap analysis of the Psychological Health and Safety standard over the past two years.

Since then, the Public Service-wide Steering Committee on Mental Health in the Workplace released the Task Force Report which included 11 recommendations. It recognized that there were many promising practices to build on throughout the federal public service. Many federal organizations, including the Agency, were already using the standard to conduct gap analyses, determine areas for action and develop action plans.

The Government of Canada adopted the Task Force’s vision for the workplace: “We will strive to create a culture that enshrines psychological health, safety and well-being in all aspects of the workplace through collaboration, inclusivity and respect; this obligation belongs to every individual in the workplace”.

Management noted that the topic of well-being was broad, encompassing many aspects of the standard, including respect in the workplace and mental health. As a result, it was important to bring this topic to the NUMCC table. The health and safety component would remain with the NHSPC. The AC, Pacific Region and Respectful Workplace and Well-Being Champion said that she was excited to be a part of this partnership with the Human Resources Branch (HRB). The strategy was created to meet the needs of executives, managers and employees, and highlighted that mental wellness was a shared responsibility. The tools and resources available were accessible and useful.

Management noted that they had presented the AFS Group with a mock-up of the well-being website before it was launched on October 3, 2016, and had asked if they wanted a presence on the website. In order to draw employees to the website, it was important that the content was broad, current, and updated often.

In support of the strategy, all EX, EC-01 and HR/RH-07 employees were given the same corporate priority in their performance agreements, “To build a healthy and respectful workplace with an emphasis on mental health”. They were asked to reinforce the corporate priority by committing to making a tangible difference in improving mental health and well-being by talking to their teams about mental health in the workplace, increasing their understanding about mental health, and promoting available information, resources and assistance for their teams.

Management explained that learning options for well-being had been developed and communicated to the CRA employees on September 26, 2016. The learning options for managers and employees included a variety of resources, from two-minute videos to workshops. The Champion said that she was excited to continue to work on this priority and ensure that the resources were meaningful.

The AFS Group said that the CRA had taken the lead on this initiative several years ago through the work being done on the Psychological Health and Safety Standard. They were of the opinion that this work had stopped when the CRA implemented the Federal Public Service Workplace Mental Health Strategy. They looked forward to continuing to work on addressing these health and safety gaps through the NHSPC.

The Commissioner said that he was pleased with the work on the strategy. He recognized that management did not have all the answers, and said that this area was ripe for management and the unions to work together to see where improvements could continue to be made. The AC, HRB reaffirmed his commitment to continue to work with the union on the strategy.

Post audit survey

Management explained that they had launched the Post Audit Survey on March 3, 2017, to get feedback from small or medium sized businesses that had completed an audit for income tax or GST/HST. When taxpayers were informed of the results of the audit, they were invited to complete a survey on a voluntary and anonymous basis. The questions were not opinion based, they were fact-based and sought to understand the taxpayers’ perspectives so that the CRA could improve the audit experience.

Management recognized that some taxpayers may take the opportunity to vent and emphasized that no identifying information was shared in the survey. If any identifying information was included, it was removed by the Public Affairs Branch before the survey was shared with management.

The AFS Group said that they, and their members, had serious concerns about the survey. They felt that this could become an avenue for disgruntled taxpayers to gather information and they strongly encouraged management to discontinue the survey.

Management responded that they wanted to see the results before taking a decision and added that the results to date had been positive. Management said that they would keep the AFS Group informed of the results of the survey. The Commissioner supported the decision to continue with the survey as he wanted to encourage innovation; however, he was open to the comments of the AFS Group.

PHOENIX

Management explained that the Phoenix payroll system had been rolled out to the remaining 67 organizations, including the CRA, in April 2016. One year later, 27 pay runs had been completed in Phoenix for over 40,000 CRA employees. The number of salary advances was gradually decreasing and had stabilized at approximately 200 advances per pay period in 2017. As the Compensation Client Service Centre (CCSC) focused on processing priority transactions, some backlog was created.

Management recognized the Headquarters Region AFS representative, Ian Tait, and thanked him for his assistance in managing and triaging urgent issues.

The AC, HRB said that he co-chaired an oversight committee with Public Services and Procurement Canada (PSPC). The committee initially oversaw the workload related to the new UTE Collective Agreement, and had since transitioned to focusing on the processes that would facilitate the CRA’s ability to work with Phoenix. CRA employees were also embedded at the PSPC to assist in resolving Phoenix issues. While the CRA’s pay modernization work positioned it well for the transition to Phoenix, the Agency continued to work collaboratively with the PSPC to stabilize the system.

The Deputy Commissioner stated that she was impressed with the CRA’s mobilization to address the issues. She co-chaired a government-wide union-management committee between the Treasury Board Secretariat and its unions. This committee was reviewing and stress testing the plan that the PSPC had developed. The committee had been extremely collaborative and focused on generating solutions, specifically, they looked at the system, processes, training, and availability of human resources.

The allocation of additional compensation advisors had been very helpful, as was the close monitoring performed by the Finance and Administration Branch (FAB). The Agency reacted quickly to pay errors to ensure that employees did not suffer financial hardship.

The AFS Group President acknowledged that the Agency’s experience was better than most departments; however, employees continued to have problems getting through to the CCSC. He requested updated statistics on the backlog and highlighted the common problems brought to his attention. Examples of these included: inaccurate tax slips, substantial delays in severance payouts for employees and retirees, issues related to cash-outs of vacation and other leave, delays issuing record of employment slips, miscalculations, underpayments and overpayments.

He appreciated management’s recognition of Ian Tait and echoed their sentiments. He said that the union had previously been told that the transition to Phoenix would be seamless for employees; however, he was not sure that this would be possible. He asked that management evaluate the capability of the Phoenix system to meet the needs of the organization, and encouraged management to consider another system.

The Deputy Commissioner stated that Phoenix was an extremely complex problem and emphasized that everyone agreed that accurate and timely pay was imperative for all public servants. There was no easy solution, as going to another system would be just as complex. She said that she would welcome another discussion with the union about their views. The union agreed.

The AFS Group raised an issue about union dues being deducted twice from certain employees. Management said that they would look into this further and provide a response to the union.

Public Service Employee Survey (PSES)

The PSES Champion explained that the 2017 Public Service Employee Annual Survey (PSEAS) had concluded and responses were expected in June. The annual survey was conducted by EKOS Research Associates Inc., and was intended to be timely and more nimble than the triennial survey. As expected, response rates for the PSEAS were lower than those of the PSES. The CRA’s preliminary response rate was 56%, which was higher than that of the Public Service at approximately 52.5%. The Champion recognized the efforts of the National Steering Committee (NSC), a network of branch and regional representatives, as well as both unions, which encouraged participation in the surveys. He also acknowledged the work of Al Ravjiani, the AFS Group representative on the NSC.

This summer, the NSC would begin preparing for the 2017 PSES. The CRA would again be purchasing supplemental questions, and would ask the same questions that were asked in 2014. Once the survey results were available, the NSC would be developing a national action plan that would be presented to the Agency Management Committee.

The AFS Group noted the introduction of the Discrimination and Harassment Centre of Expertise. Al hoped to review the results of the PSEAS, contribute to the action plan, and build on it on an annual basis. Al cautioned management that the survey should inform policy and program development, and not stray into items under the purview of the collective agreement. He said that some regional and local action plans were released before the national action plan. Management acknowledged that the national plan took a long time to produce, and committed to having a tighter schedule for developing and releasing the national action plan for the 2017 PSES.

The AFS Group said that there was confusion about the definition of “senior management” in the PSES and suggested there could be value in defining the term for employees. Management said that they would consider developing a common definition of “senior management” that could be shared in communications about the survey.

The Commissioner said that the surveys were an important vehicle to obtain employee feedback and he took the follow-up quite seriously.

DEDICATED TELEPHONE SERVICE

Management explained that Budget 2016 announced a Dedicated Telephone Service (DTS) for income tax service providers, created in the Income Tax Rulings Directorate. The DTS would provide service to mid-level tax practitioners, small accounting firms that prepared the majority of tax returns for individuals, small or medium enterprises. This would not include large firms that had a significant amount of in-house tax expertise in complex tax matters.

DTS teams had been created in Ottawa, Montreal and Toronto, with each team comprised of 6 AU-03 Rulings Officers and 2 AU-04 Senior Rulings Officers, under the supervision of an AU-06 Section Chief. Management said that they were on track for a July 2017 launch. The DTS would use the Rogers Communications Call Centre Solution and the case management system had been designed to optimize business intelligence, and provide feedback to improve client service.

The AFS Group asked how management would ensure that the DTS was being used by the intended users. Management responded that the DTS was being offered as a three-year pilot project, through a partnership with the Ontario and Quebec Chartered Professional Accountants. The DTS could accept up to 3000 registrants in the pilot.

EARLY INTERVENTION AND RETURN TO WORK APPROACH AND NATIONAL CENTRE

Management stated that discussions about disability management had started with the union in May 2013, and continued again in March and May 2016. All feedback was considered and incorporated, where possible.

Management noted that the Approach to Early Intervention and Return to Work (EIRTW) was a shared responsibility, which required the collaboration of employees, managers and unions. Management emphasized the importance of employees involving the union for support throughout the process. This practice was encouraged; however, management stressed that employees needed to initiate the union’s involvement in order to protect their own privacy. The return to work plan was between the employee, manager, and physician.

Management provided an update on the implementation of the new centralized EIRTW Centre that had launched nationally on January 30, 2017. All existing files that related to return to work and accommodation, with clear limitations and restrictions, had been transferred to the Centre.

With a national centre, it was possible to identify trends, such as:

  • confusion related to the ergonomics assessments process;
  • lack of documentation about accommodation plans in some employee files; and
  • a need for clear information regarding limitations and restrictions before granting permanent accommodation, specifically for telework cases.

Over the coming months, the EIRTW Centre would focus on outreach to the MG community to ensure that these concerns were addressed.

The AFS Group President stated that EIRTW was a major concern. It was important that their members had a safe and successful return to work; they agreed this was a shared responsibility. They were disappointed that the role of the union was marginalized in the revised documents. The union worked with employees and management throughout the process to ensure that reasonable workplace accommodations were arranged and the return to work was successful, when possible. The union, as well as the health and safety committees, needed to be involved to ensure that workplace accommodations did not infringe upon the health and safety of others in the workplace. The union acknowledged and accepted that some employees did not want help from the union; however, they highlighted the efforts of their stewards in implementing accommodations and returns to the workplace, where there were challenges. Therefore, the significant role of the union needed to be acknowledged and encouraged.

Management reiterated their support for the union’s role, as a partner in this process; however, employees needed to decide if they would be represented. The Commissioner recognized the importance of constructively working together for management and the union.

The Negotiator for the AFS Group said that the union’s involvement could address the perception that an accommodation was favouritism or preferential treatment, as the union helped to establish a consistent standard.

CLOSING REMARKS

The Commissioner said that he appreciated the detailed discussion, and the less formal conversations during the break. He acknowledged that the union and management had an opportunity to work together. The CRA had dedicated employees, a great mandate and a drive to become a world-class tax and benefit administration. This would involve identifying where improvements were needed, being innovative, and accepting that some ideas would not be successful. He recognized that the activities of one area of the organization, such as appeals, would have an impact on another part of the organization, such as collections, or audit. An awareness of the realities outside the Agency would help the CRA to deliver on its mandate more effectively.

The AFS Group President said that his members were proud to work for a world-class tax and benefit administration. However, they are concerned that more meetings have not been scheduled to finalize bargaining. He thanked everyone for a productive meeting and looked forward to ongoing discussion on the items raised. He appreciated meeting with the Commissioner in September and December 2016, and stressed the importance of union-management consultation at the local, regional and national levels.

Bob Hamilton

Commissioner

Canada Revenue Agency

Doug Mason

President

Audit, Financial and Scientific Group

Professional Institute of the Public Service of Canada