What is the Canada Revenue Agency (CRA)? Canada Revenue Agency (CRA) Review

The Canada Revenue Agency collects taxes and administers tax law policy, as well as providing benefit programs and tax credits. Legislation administered by the Canada Revenue Agency includes the Income Tax Act, parts of the Excise Tax Act, and parts of the law relating to the Canada Pension Plan, Employment Insurance (EI), tariffs, and customs duties. The agency also oversees the registration of charities in Canada and enforces most of the country's tax laws.

history

Prior to Confederation, the collection of taxes and duties was the responsibility of the customs department in each of the British North American colonies. In 1867, Congress passed legislation creating two separate departments, the Department of Revenue and Customs. Until the end of World War I, most federal revenue came from duties and excise taxes, but as the war put increasing pressure on government finances, the Borden government introduced a personal income tax in 1917. Although initially intended as a temporary measure, the federal government later continued to levy personal income taxes, which are now the largest source of revenue for the federal government. Between 1918 and 1927, the Department of Revenue and Customs were finally merged into a single department, Customs and Excise.

An IRS employee sorts out a tax return in 1945.

In 1927, Parliament passed the Department of National Revenue Act, changing the department's name from Customs and Excise to National Revenue while retaining its earlier mandate. The Department of National Revenue would take on increasing responsibilities as new social programs, such as the Canada Pension Plan, and new sources of revenue, such as the Goods and Services Tax (GST), were gradually introduced in the latter half of the 20th century. EFILE was first made available to Canadian taxpayers who wished to file their taxes electronically in 1993.

In 1999, the Chrétien government passed legislation to transform the Canada Revenue Agency from a department into a new agency, the Canada Customs and Revenue Agency. The change was intended to reduce duplication in tax administration, streamline services provided to Canadians, and allow the tax administration greater flexibility in business planning and relationships with provincial, territorial, and Indigenous governments. The CCRA was given a broad mandate that included taxation, customs, and border protection. This arrangement lasted only until December 2003, when the CCRA was separated from the Canada Border Services Agency due to issues with cross-departmental collaboration between the Canada Border Services Agency, Citizenship and Immigration Canada, and the Canadian Food Inspection Agency on border protection and immigration enforcement.

Following the separation of CBSA, CCRA was renamed the Canada Revenue Agency, with a strategic direction to enforce Canada's tax laws and deliver benefits to Canadians. The emergency response agency joined several other government departments in transitioning to temporary teleworking arrangements due to the COVID-19 pandemic. The CRA also extended the filing and payment deadlines for the 2019 tax year. The agency was also tasked with delivering emergency economic benefits to Canadians on behalf of the federal government, processing millions of applications through its IT systems.