For-profit organizations grow because they meet demand by either capturing it or creating it. Government bureaucracies, on the other hand, tend to expand for entirely different reasons: bureaucratic momentum, politically motivated programs, mandated services and a striking absence of accountability.
With that in mind, let’s examine the growth of the
. Its
was 39,484 for the fiscal year ending March 31, 2016. Fast forward to 2024 and it was 59,155 — a 49.8 per cent increase. Incredible growth. There have been some small reductions in the head count but, overall, it’s not material.
Has the CRA — a government bureaucracy — grown through bureaucratic momentum? Not sure. How about political incentives? Without a doubt.
There have been tremendous increases to the CRA’s
in recent years. For example, its budgeted authority was $13.2 billion for the 2022-23 fiscal year. For the current year, it’s $21.4 billion, which is an $8.2-billion increase, or 62.1 per cent, in three years.
Why is it political? Well, the stated reasons behind some of the increases have been to go after certain bogeymen: larger companies and international tax matters being two of them.
“Budget 2023 proposes to provide $1.2 billion over five years, starting in 2023-24, to the Canada Revenue Agency to expand audits of larger entities and non-residents engaged in aggressive tax planning,” the government said in the 2023 federal budget.
That smells more like a political objective than a business-case objective.
Have additional mandated services been required to be provided by the CRA? Yes, without a doubt. Especially during the crazy COVID-19 support period when the government was handing out money like opening up a free candy store for kids. Those periods are long gone, but, to be fair, the resulting audits are still ongoing.
Has there been a lack of meaningful accountability? Yes, despite the
that the CRA publishes. The 2024 federal budget proposed to provide $336 million over two years, starting in 2024-25, to the CRA to maintain call centre resources and improve their efficiency. Have you tried calling the CRA recently? It’s almost impossible to get through and an exercise in frustration.
Why am I analyzing this? With massive increased budgets and head counts, you would logically expect the CRA to improve its service, efficiency and technology. From the front lines, I can tell you that my colleagues across Canada are suffering through one of the worst tax-filing seasons in history. Don’t believe me? I challenge you to start following some of the chatter about this by accountants on LinkedIn.
The precursor to all this is that the previous two filing seasons have been super frustrating.
The 2022 filing season was memorable because of the
filing debacle. Many Canadians were forced to file new tax returns under the threat of $5,000 penalties. At the last minute, the CRA announced filing extensions for such Canadians, but not until tax preparers wasted significant amounts of time and effort trying to comply for their clients.
The 2023 filing season was marred by the
. Again, taxpayers and tax preparers mightily struggled to comply with the new, expansive rules. The CRA, to its credit, tried to provide guidance on many interpretive issues, but at the last moment a just-kidding kind of deferral was announced.
For the current season, the CRA appears to have been ill-prepared for the reversal in the capital gains legislation announced by the government on Jan. 31, 2025. Prior to that, in a highly debatable stance despite its long-standing policy, the CRA was administering the 2024 capital gains proposals as if they were law.
On March 11, 2025, the CRA
filing deadline extensions — May 1, 2025, for trusts and June 2, 2025, for individuals — for those reporting capital gains because it was not ready to accept such filings. The CRA also hinted there were problems with the online portal that authorized tax preparers rely on to download taxpayer information slips that are filed by payors with the CRA. Slips were not
in the portal.
The CRA sent out an email to electronic filers explaining the situation on April 3, 2025.
“Beginning in January 2025, the CRA introduced a new validation process for organizations that submit information returns … to ensure the accuracy of the data they submit,” it said. “While this change improves data quality, some issuers have had difficulties uploading tax slips, resulting in certain slips not appearing in My Account, Represent a Client, or the Auto-fill my return service as early as in previous years.”
This statement lacks accountability and seems to pass the buck back to the organizations that are trying to comply — not a good look.
Since then, it’s been an exercise in frustration for tax preparers. Yes, they can use the physical slips provided to them by their clients, but most tax preparers have significantly enhanced their electronic capabilities to improve their efficiencies and respond to the CRA’s broad-based push to digital services. Not being able to rely on the CRA online portal is a significant disruption for tax preparers.
And it’s not over. There have recently been numerous reports of the online portal now having duplicate slips. This means that when the slips are downloaded into the software, duplicate income and information show up. Tax preparers are thus required to manually check for duplicity.
The CRA always does a subsequent review of tax filings to ensure the slips in its system match the applicable tax filing. Will this slip-matching process result in erroneous reassessments by the CRA if duplicate slips are pervasive throughout its systems? I guess time will tell.
Perhaps you’re not shedding any tears for this, but these online portal issues add tremendous inefficiencies for tax preparers, many of whom don’t have any extra time available to them, especially with the tremendous
.
There is no shortage of tax preparers venting their frustrations on the slip issues. “Worst tax filing season in my career!!” are common online sentiments. Calls for an April 30 filing extension are mounting.
I’m always hesitant to criticize the CRA. Its employees have a tough and important job: administering our country’s tax system is no small task. But after three consecutive years of high-profile filing-season fiascos, combined with a 50 per cent headcount increase and a staggering increased budget, something is clearly amiss.
Canadians deserve a tax administration system that’s efficient, accountable and prepared. It’s time to take a deep dive into the CRA’s growth and re-pivot to ensure that our precious taxpayer dollars are being invested in the right spots for the sake of our tax system and, frankly, for the good of our country.
A $21.4-billion budget and a 50 per cent headcount increase should buy more than delays, duplications and digital chaos. In the meantime, let’s get that April 30 filing deadline extended.
Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at
and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.
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