GAGNON: Taxpayers are right to be frustrated at the CRA

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You know things are bad when the Taxpayers’ ombudsman tells you to complain about poor service from the Canada Revenue Agency.

“There’s no one at the agency who agrees that a two- or three-hour wait can be considered good service,” said ombudsman Francois Boileau.

He was reacting to news coverage exposing the many nightmares taxpayers face when it comes to the federal tax collector.

Whether a person has to take a day off work to wait on the phone, or a single mother has to fight the bureaucracy to get her child’s birth certificate recognized, the CRA isn’t impressing anyone these days.

These stories, once anecdotal, are now the norm. It’s clear the CRA must be thoroughly and comprehensively reformed.

Some might be tempted to blame the agency’s alleged lack of manpower or underfunding for the shortcomings. They couldn’t be more wrong.

The problems taxpayers experience today were already outlined in 2017 in a report delivered by the auditor general of Canada. It described the poor quality of services, long wait times and lack of follow-up. It was all there.

Promising to remedy the situation once and for all, Prime Minister Justin Trudeau’s government decided to do what it does best: increase spending.

Revenue Canada’s operating costs have risen from $5.3 billion in 2018-19 to nearly $17.5 billion in 2024-25. In other words, the CRA’s budget exploded by 230% in five years.

For the agency’s call centres, the source of all evil for many taxpayers, this explosion in spending increased the annual budget from $149 million in 2018 to $481 million in 2023.

One of the reasons the CRA’s operating costs have soared is to support its ever-increasing bureaucracy.

The CRA hired nearly 18,000 new employees since 2018, an increase of 43%, for a total of 60,000 tax agents. This makes it the federal agency with the most staff, but a comparison with our neighbours to the south shows just how out of control things truly are.

The U.S. Internal Revenue Service has 79,000 employees, even though it serves a population 10 times the size. In Canada, there is one CRA employee for every 700 citizens. In the U.S., there is one IRS employee for every 4,000 citizens.

More funding, more bureaucrats, and yet service continues to deteriorate. How can this be explained?

First, it should be noted that Trudeau made no attempt to simplify the tax system. On the contrary, he’s made the compliance burden heavier by raising taxes or creating new ones, whether it’s the capital gains tax hike, the carbon tax or the digital services tax.

The Trudeau government also made the CRA collect more information on you. For example, since 2017, Canadians have been required to declare the sale of their principal residence, even though it’s tax-exempt.

But if the taxman isn’t taxing it, then why does the taxman want that information? Could it be because another new tax could be coming down the pike?

It would be unacceptable for the Trudeau government to give more power to an agency that’s already in trouble, especially after its recent budget and staffing explosion.

It’s also abundantly clear the CRA learned nothing from the auditor general’s 2017 report. In fact, things are so bad the auditor general is once again being called on to publish a report on the agency’s shortcomings.

Instead of digging deeper into your pockets, the CRA should take these reports seriously and correct itself.

Nicolas Gagnon is Quebec director for the Canadian Taxpayers Federation