The Canada Revenue Agency is trimming its workforce even as tax season approaches, raising questions about service delivery and the government’s broader fiscal strategy.
Last week, approximately 280 permanent employees received notices that their positions would be eliminated as part of what the agency describes as “organizational restructuring.” The Professional Institute of the Public Service of Canada (PIPSC), which represents many affected workers, confirmed the cuts span multiple branches including the International, Large Business and Investigations Branch.
These reductions come at a peculiar moment. The federal tax collector has faced intense scrutiny in recent years for everything from processing delays to accessibility issues with its digital services. Just last February, the agency faced a significant security breach that temporarily shut down online services and compromised thousands of accounts.
“It feels counterintuitive to reduce staff when there’s already strain on the system,” says Jennifer Taylor, a tax policy analyst formerly with the Department of Finance. “The timing is particularly concerning with tax season only months away.”
The CRA maintains these cuts represent normal operational adjustments rather than austerity measures. In statements to media, spokesperson Hannah Wardell emphasized that affected employees would have options including placement in vacant positions or access to workforce adjustment provisions in their collective agreements.
“This restructuring effort aims to streamline operations and better align resources with our service priorities,” Wardell noted, though specifics about which areas would see reduced capacity remained vague.
What makes these cuts particularly notable is their contrast with the agency’s recent mandate expansion. Over the past three years, the CRA has taken on additional responsibilities including pandemic benefit administration, enhanced corporate tax enforcement, and new digital currency compliance measures.
The Public Service Alliance of Canada (PSAC), another union representing CRA workers, expressed frustration with the decision. “You can’t keep adding responsibilities while subtracting people and expect better results,” said Marc Brière, president of the Union of Taxation Employees, a PSAC component.
Financial analysts point to these cuts as part of a broader pattern of fiscal restraint emerging across federal departments. The Trudeau government, facing pressure to rein in spending after pandemic-era expansions, directed departments in last year’s budget to find $15.4 billion in savings over five years.
“We’re seeing the rubber hit the road on those efficiency targets,” explains Sahir Khan, executive vice-president of the Institute of Fiscal Studies and Democracy at the University of Ottawa. “But there’s always a risk when cuts affect service-oriented agencies like the CRA. Savings in one column can create costs elsewhere.”
Indeed, the Parliamentary Budget Officer has repeatedly highlighted how investments in tax enforcement typically generate returns several times their cost. A 2020 report suggested each dollar spent on CRA compliance activities yields between $5 and $10 in recovered revenue.
For ordinary Canadians, the immediate concern is whether these cuts might impact tax filing season. The agency processes roughly 30 million tax returns annually, with the bulk submitted between February and April.
Technology might offset some staffing reductions. The CRA has invested substantially in automation and artificial intelligence tools to streamline returns processing and flag potential audit cases. Last year, approximately 92% of personal tax returns were filed electronically.
However, those with complex situations or who need direct assistance might face challenges. The agency’s call centers have struggled with wait times exceeding an hour during peak periods, prompting complaints to the Office of the Taxpayers’ Ombudsperson.
“The people who suffer most from service reductions are often those who can least afford professional tax preparation—seniors, newcomers, and low-income Canadians,” notes Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth.
For the employees affected, uncertainty looms. While some may find positions elsewhere in the agency or broader public service, others face potential career disruption. The unions have indicated they’ll challenge any layoffs that don’t follow proper workforce adjustment provisions.
The CRA’s workforce adjustments also raise questions about the government’s revenue collection priorities. Recent federal budgets emphasized closing tax gaps and ensuring corporations pay their fair share—objectives that typically require specialized staff in audit and enforcement roles.
“If you’re serious about tackling sophisticated tax avoidance, you need experienced investigators and analysts,” says Toby Sanger, executive director of Canadians for Tax Fairness. “Those aren’t positions you can easily replace or automate.”
As tax filing season approaches, Canadians will soon discover whether these organizational changes translate to noticeable differences in service. The true impact may not be fully apparent until the agency faces its next major challenge—be it processing millions of returns or responding to the next sophisticated cyber threat.
For now, the CRA insists it remains committed to its mandate despite the workforce adjustments. Whether that commitment can be fulfilled with fewer hands on deck remains to be seen.
