As the 2021 Canadian tax season officially launched on Monday, February 22nd, the Canada Revenue Agency (CRA) declared: “Due to the extraordinary conditions we have all faced over the last year, this tax season will be unlike any other.” However, Canadian accounting practitioners and tax professionals are raising serious alarms regarding the CRA's preparedness. This article discusses issues originally reported in Canadian tax policy announcements and legal updates by practitioners like David Rotfleisch of Rotfleisch & Samulovitch and Hugh Neilson of Kingston Ross Pasnak LLP.
A combination of cybersecurity preventative lockouts, historical call centre communication issues, and a new decision to outsource customer support to a private third party has left the Canadian accounting community divided on whether the tax authority is ready for the seasonal surge.
A Rocky Lead-up: Account Lockouts & Call Centre Delays
The weeks leading up to tax season were marked by significant disruption. On February 16th, the CRA proactively locked out more than 100,000 Canadians from their online "My Account" portals after credential lists matching taxpayer profiles were discovered on the dark web. While the agency emphasized that accounts were not directly hacked, the sudden lockout resulted in confusion and overwhelmed phone lines, with taxpayers waiting on hold for hours.
This prompted the Office of the Taxpayers' Ombudsperson to launch a formal review of the communication gaps surrounding the lockout. David Rotfleisch, a Toronto-based tax lawyer and accountant, was critical of the agency's communication methods:
"CRA communication efforts are notoriously bad. Incomprehensible written communications have improved somewhat but are still difficult for non-professionals to understand. However, the worst performance is arguably front-line telephone staff. Studies have consistently shown a high level of misinformation."
— David Rotfleisch, Rotfleisch & Samulovitch
Rotfleisch points to the CRA's confusing messaging over the Canada Emergency Response Benefit (CERB) gross versus net income eligibility criteria—which was partly blamed on telephone agents giving wrong advice—as a prime example of front-line communication failures.
The Call Centre Outsourcing Debate
To cope with the high demand, the CRA announced it hired Maximus Canada, a business process services outsourcing firm, to supply 130 additional agents alongside 2,000 new internal call centre hires. This decision has sparked debate among tax professionals:
| Perspective | Core Argument | Practitioner Stance |
|---|---|---|
| Concerns over Quality & Training | If full-time, permanent CRA employees frequently provide incorrect tax guidance, it is unlikely that third-party contracted staff can be trained quickly enough to provide accurate advice regarding complex COVID-19 relief programs. | "The outsourced model has the ability to allow CRA to provide a better level of customer support at the same time that it has the ability to completely mislead taxpayers." — David Rotfleisch |
| Pragmatic & Businesslike Approach | The CRA faces a massive, temporary seasonal surge. Engaging temporary contractors or outsourcing temporary support (especially a small pilot of 130 workers compared to 2,000 hires) is a standard, businesslike method to scale resources. | "Outsourcing to enhance resources, especially resources to fill a temporary need, seems very businesslike... Maybe this is considered a small pilot to test the concept, which seems prudent." — Hugh Neilson, Kingston Ross Pasnak LLP |
What Taxpayers & Practitioners Need to Know
As the tax season progresses, both accountants and taxpayers should take specific precautions to avoid misinformation and secure their files:
- Request Representation Verification: If contacting the CRA by phone, inquire whether you are speaking with an official CRA agent or a Maximus Canada third-party contractor.
- Verify Written Documentation: Never rely solely on verbal advice from a call centre agent. Cross-reference verbal information with the CRA's published guides or consult a professional accountant.
- Secure Your Credentials: Given the recent dark web leaks, taxpayers should update their CRA My Account passwords and enable multi-factor authentication (MFA) immediately.
Frequently Asked Questions (FAQ)
1. Why were thousands of Canadians locked out of their CRA accounts in February 2021?
As a preventative measure, the CRA locked out over 100,000 user accounts after credential lists matching taxpayer logins were detected on the dark web. While the accounts themselves were not hacked, the lockout was implemented to prevent unauthorized access.
2. Who is Maximus Canada and why is the CRA using their services?
Maximus Canada is a private staffing and business process services company. The CRA contracted them to provide an additional 130 call centre agents to handle the massive volume of COVID-19 benefit and tax questions during the seasonal peak.
3. Why are tax professionals worried about call centre outsourcing?
Critics argue that if full-time CRA employees have historically struggled with accuracy—such as misinforming self-employed taxpayers on CERB eligibility—it is highly risky to trust outsourced, temporary workers with complex tax and benefits advisory questions.
4. How is the CRA resolving the phone wait times for the 2021 tax season?
The CRA is hiring 2,000 new call centre agents (supplemented by 130 outsourced workers) and has extended helpline operational hours to give taxpayers more opportunities to get their tax questions resolved.