CRA taking far too long to resolve tax objections, auditor general says

The federal auditor general says Canada’s tax man is costing the government and citizens millions by taking far too long to resolve income tax disputes.

Takes Canada Revenue an average of 263 days to process an objection from an individual or corporation

The Canada Revenue Agency assures Yukoners their 2014 tax returns on the lost DVD were encrypted. (Canada Revenue Agency)

The federal government takes months — sometimes years — to make decisions, costing Canadians time and money when it comes to resolving tax disputes, the federal auditor general says.

And that same glacial approach to decision-making can also prevent Canadian cars from being as safe as possible, Michael Ferguson says in his annual fall series of reports, released Tuesday.

Those reports include audits of the Canada Revenue Agency and Transport Canada, where in both cases exceedingly long delays fall short of public expectations in an era of advanced technology and instant communications.

In both, Ferguson's message was similar: departments assess the time it takes to make decisions against their own internal benchmarks, giving little heed to what the taxpayers they serve might consider a timely decision.

Both departments agreed with the recommendations in the audits, vowing to craft new policies to show they have heeded Ferguson's calls.

The Canada Revenue Agency often leaves taxpayers waiting for months after they file formal objections to their tax assessments, Ferguson found. Appeals officers seeking help from other parts of the agency often wait a year or more, he added.

"That type of performance just isn't acceptable and the government departments need to find a way to design their services so that they actually meet the needs of the citizens," Ferguson told a news conference.

Over the last 10 fiscal years, the inventory of outstanding cases grew by 171 per cent, while the number of employees dedicated to resolving them grew by only 14 per cent, the audit found. The backlog of unresolved cases as of March 31 represented more than $18 billion in federal taxes, the audit said.

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In the Transport Canada audit, auditors found it often took the department 10 years or more to make decisions on new regulations, delaying access to new safety features that could ensure the cars on Canadian roads are as safe as possible.

Ferguson's report said that while recent Transport Canada research has identified problems with car seat anchors for children over 30 kilograms, the agency has yet to propose new regulations or issue an advisory to parents about additional safety measures.

Auditors also found that Transport Canada often failed to consult consumer associations, safety advocates, parts suppliers and police, causing delays or imbalances in making regulatory changes.

"When you have regulations that dictate the type of light bulb that can be placed over a licence plate, but you don't have regulations that deal with the software that runs autonomous vehicles, then it shows that the regulatory process really isn't a coherent system," Ferguson said.

The department frequently made regulatory changes following decisions from its American counterpart — problematic, auditors said, since U.S. standards don't always align with Canadian factors like the climate and daylight hours.