Report on Performance

The ministry undertakes performance measurement and reporting to assess performance against established targets, inform decision-making processes and communicate progress towards ministry goals. The section contains detailed information on the ministry's performance during 2005/06 based on the performance measures and targets set out in the 2005/06 – 2007/08 Service Plan Update.¹⁷ The performance measures presented highlight the most critical aspects of ministry performance and are a sub-set of the data collected and reported internally by the ministry. The performance results demonstrate the ministry's progress towards achieving its stated vision, goals and objectives.

Performance for most measures is monitored monthly. This allows the ministry to implement operational changes required to improve performance in a timely manner. The ministry reviews performance measures at least annually to ensure measures continue to provide meaningful information, are representative of ministry performance and reflect ministry priorities. Measures are replaced where and when appropriate, balancing the need for reliable information with reasonable cost. Performance targets are based on past performance trends, government priorities, a focus on continuous improvement and availability of resources.

The data presented in this report is a valid representation of the ministry's performance during 2005/06. Performance is tracked through ministry financial and business information systems and processes, and is consistent with data reported in previous years unless otherwise noted. Data and explanations of performance are provided regularly by business areas with performance accountabilities across the ministry. This data supports the ministry's monthly and annual performance reporting and review processes, and annual planning. Ministry revenue is audited by the Office of the Auditor General as part of the audit of the Summary Financial Statements as reported in the annual Public Accounts of the Government of British Columbia. Ministry incremental revenue and debt collection totals are monitored by the ministry and reviewed by the ministry's Executive Financial Officer.

Since the publication of the 2005/06 – 2007/08 Service Plan Update, the ministry has undertaken a comprehensive review of its goals, objectives and performance measures. Details of the changes are in the 2006/07 – 2008/09 Service Plan and will be reported on at the end of 2006/07. Refer to Appendix F for details.

For information on performance data methodology and a discussion on benchmarking, refer to Appendix G.


¹⁷	View the 2005/06-2007/08 Service Plan Update online at http://www.bcbudget.gov.bc.ca/.

Performance Plan Summary Table

The ministry has established six strategic goals to guide it towards realizing its vision. These goals reflect government and ministry priorities, and the ministry's mission and values. The following diagram demonstrates the linkages between the ministry's goals, objectives and performance measures, and the government's Five Great Goals.

Performance Plan Summary Table.

Performance Trends and 2005/06 Results

Following is an overview of the ministry's performance, presented by ministry goal, for 2005/06 and the previous three years (where available).

In 2005/06, the ministry exceeded, achieved or mostly achieved 13 of 16 targets set for its key performance measures. One measure did not meet target, one measure is not being reported while a third has been revised. The following section provides more detail on the ministry's performance during the past year.

Performance Measures	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Goal 1: Support small business development
Establish a small business roundtable.			New measure in 2005/06	Small Business Round- table established	Small Business Round- table established October 2005	Achieved Target (p.30)
Goal 2: A regulatory climate that supports economic and business competitiveness
Regulatory quality — percentage of new legislation and regulations meeting regulatory reform criteria.			New measure in 2005/06	100%	100%	Achieved Target (p.32)
Regulatory burden — government- wide regulatory requirements.	382,139 (June 2001)	237,893 (June 2004)	230,297 (June 2005)	0% net increase over June 2004	5% decrease over June 2004 Actual (226,433)	Exceeded Target (p.34)
Goal 3: Maximize voluntary compliance
Percentage of revenue administered without intervention.	96.1%	95.7%	97.2%	97.9%	97.7%	Mostly Achieved Target¹ (p.37)
Percentage of revenue received through electronic payments.	58% ($6.0 B)² (2.7 M)³	57.7% ($6.8 B)² (3.3 M)³	58.8% ($7.5 B)² (3.3 M)³	65%	64.6% ($9.0 B)² (4.1 M)³	Mostly Achieved Target¹ (p.38)
Percentage of on-time payments.	85% (858,000)⁴	82.4% (794,000)⁴	89.2% (new baseline) (856,000)⁴	89%	88.9% (874,000)⁴	Mostly Achieved Target¹ (p.40)
Goal 4: Collection of all outstanding amounts owed to British Columbians
Incremental revenue.	$410.2 M ($308.2 M)⁵	$479.3 M ($353.2 M)⁵	$330.7 M ($251.8 M)⁵	$225.6 M	$310.5 M ($279.8 M)⁵	Exceeded Target (p.44)
Number of audits and reviews performed.	194,104	184,441	187,749	168,000	189,856	Exceeded Target (p.45)
Average tax assessment per audit position.	$1.1 M ($632,000)⁵	$924,000 ($646,000)⁵	$889,000 ($667,000)⁵	$525,000	$888,000 ($802,000)⁵	Exceeded Target (p.46)
Debt collections.	$357.9 M	$348.4 M	$337.5 M	$324.0 M	$349.8 M	Exceeded Target (p.46)
Average recovery per tax collection position.	$4.9 M	$4.3 M	$3.9 M	$3.29 M	$3.56 M	Exceeded Target (p.47)
Percentage of total government accounts receivable more than 90 days overdue.	40%	40%	35%	41%	34%	Exceeded Target (p.48)
Goal 5: Fair, efficient, and equitable administration that meets customers' needs
Tax appeals resolution — elapsed time from receipt of tax appeal to final decision.	11.4 months	11.7 months	12.0 months	6.0 months	5.7 months	Exceeded Target (p.53)
Goal 6: Continuous performance improvement and accountability
Receipt to deposit turnaround time.	New measure in 2003/04	3 Days	2 Days	95% on Same Day	89% on Same Day	Missed Target (p.57)
Cost per transaction.	New measure in 2003/04	$0.82	$0.68	$0.75		Not Reported⁶ (p.58)
Cost to collect $1 of debt.		New measure in 2004/05	$0.05 ($0.024)	$0.06 (new baseline established)	$0.05 ($0.029)	New Baseline Established⁶ (p.58)

¹	A target is considered to be 'mostly achieved' if the result is at least 95 per cent of the target.
²	Revenue received electronically.
³	Number of payments received electronically.
⁴	Number of on-time payments.
⁵	Incremental revenue and annual tax assessment per audit position have been normalized to remove extraordinary recoveries.
⁶	Refer to page 58 for an explanation of performance reporting for these two measures.

Goals, Objectives, Strategies and Performance Measures

Goal 1: Support small business development.

Small business is a significant driver of British Columbia's economic growth and is vital to the province's economic success. The ministry recognizes the importance of the small business sector and is committed to supporting a business climate in British Columbia where small business prospers. Realization of this goal benefits all British Columbians through its positive impact on job creation and the provincial economy, and directly supports both the ministry's mandate to foster a competitive environment for small business and the government's Great Goal to create more jobs per capita than anywhere else in Canada.

Small Business Profile

Small business plays a vital role in all areas of British Columbia's economy:

constitutes 98 per cent (or 363,000) of all businesses in the province;
employs approximately 971,000 people;
plays a major role in the hi-tech sector, with 95 per cent of employers are small business;
accounts for 57 per cent of all private sector jobs and;
contributes 26 per cent of provincial GDP, the highest ratio of any province.

Small business employment in BC grew 3.3 per cent from 2003 to 2004, the second highest rate of growth among the provinces and well above the national average of 1.9 per cent.

Source: Small Business Profile 2005

The ministry's role in the area of small business development is to provide strategic leadership within government by identifying, coordinating and supporting government-wide initiatives. The ministry works closely with other ministries where policies and programs impact the small business community. It also works with a variety of partners to jointly develop proposals and implement solutions to address small business concerns.

Realization of this goal is influenced by elements outside of the ministry's control. For example, the impact of the national and global economy on the provincial economic environment, and the level of commitment of other ministries, levels of government and the business community to support small business development.

To support attainment of and commitment to this goal, in October 2005, the ministry established the permanent Small Business Roundtable. The Small Business Roundtable supports small business development by providing an effective forum to engage the small business sector in working with government to make British Columbia the most business friendly jurisdiction in Canada.

In addition, the ministry assumed responsibility for Small Business British Columbia (SBBC) in 2005. As a key partner of the Government of British Columbia, SBBC works with the Province in developing strategies and tools for small business development throughout British Columbia. Funded by both the federal and provincial governments, SBBC is a not-for-profit organization that provides support to current and prospective small business operators in British Columbia. Small business in the province will benefit from the transfer as the SBBC's service delivery network complements the ministry's policy focus.

Core Business Areas: Small Business and Regulatory Reform.

Objective 1: Enhance and encourage economic opportunities for small business.

This objective, key to attaining Goal 1, reflects the ministry's commitment to identify, coordinate and implement initiatives to support small business start-up and growth.

Strategies and Results

Enhance the competitive environment for small business.

The ministry reviews tax proposals and changes to existing tax mechanisms, and monitors programs and services offered in other jurisdictions with the intent to adopt 'best practices' and ensure British Columbia offers a competitive environment for small business.

The ministry participates in the "Federal/Provincial/Territorial Meeting of Government Officials on Small Business Policy." These meetings have been held annually for the past five years. The meetings provide an opportunity for collaborative information exchange, and sharing of experience and best practices.

Participate in federal-provincial policy and program development to support small business success.

The ministry collaborates with federal, provincial and territorial partners to influence the national small business policy agenda.

The ministry assumed responsibility for Small Business BC (SBBC) in December 2005. This not-for profit organization, funded by both the federal and provincial governments, provides advisory services, business registration, market research services, and other tools to assist business start-up and growth.

Improve coordination of small business activities across government.

The ministry works to improve the coordination of small business activities across government, including working with other ministries to improve program delivery for small business.

The ministry established the permanent Small Business Roundtable in October 2005. The roundtable provides ongoing advice to government on issues, strategies and possible actions to support small business success. Refer to Highlights section (page 7).
The ministry launched the British Columbia Provincial Sales Tax (PST) Review as part of the government's commitment to review taxation policies. Consulting with individuals, small business and industry, the review will look at policies, legislation and administrative processes to streamline, simplify and enhance fairness for taxpayers. Refer to the Highlights section (page 8).

Diversify economic opportunities for small business.

The ministry maintains and builds partnerships with key organizations and levers resources to offer services, products and tools to entrepreneurs.

The ministry secured $395,000 in contributions from funding partners to support this strategy.
Working with partners, the ministry developed and maintained resource guides aimed at identifying skill gaps and programs to enhance business opportunities for small business owners. Examples include British Columbia Skills Force Initiative, Small Business Profile, Small Business Quarterly, Growing Your Business — A Guide for British Columbia Women, and Leadership British Columbia Peer Mentoring Program.

Encourage small business development.

The ministry encourages small business development by raising the profile of small business opportunities, and highlighting and celebrating the contribution of small business to the economy and communities.

The ministry championed and celebrated the success of small business and their contributions to the economy and communities, funding events such as — Small Business Week, Aboriginal BEST, Enterprise 2006 — UBC Sauder School of Business Undergraduate Awards, Junior Achievement Business Challenge, Kelowna Chamber of Commerce Business Awards, SUCCESS — Mentoring Program, and the Vancouver Island Business Awards.

Performance Measures and Results

Establish a Small Business Roundtable.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Result
Establish a Small Business Roundtable.			New measure in 2005/06	Small Business Roundtable established	Small Business Roundtable established October 2005	Achieved Target

Importance

This measure demonstrates the ministry's commitment to support small business development by establishing, in a timely manner, a mechanism to listen to and work with the small business sector to support their ongoing success.

Explanation of performance

A key initiative of the ministry is to work with other ministries, levels of government and other partners to support small business development. A key component of this initiative is the establishment of the permanent Small Business Roundtable. The roundtable will provide ongoing advice to government to support the small business sector. The roundtable was announced in October 2005, meeting the performance target.

Over the next year, government and the ministry will review the advice from the roundtable and, working with other ministries, levels of government and other partners, develop a Small Business Strategy to support the economic prosperity of the small business community in British Columbia. Future performance targets will measure the ministry's success in developing and implementing the strategy.

Goal 2: A regulatory climate that supports economic and business competitiveness.

The Ministry of Small Business and Revenue leads the regulatory reform initiative for government. This initiative is a key component of government's strategy to increase British Columbia's economic and business competitiveness, at the same time, preserving those regulations effective in protecting health, safety and the environment. Through a focused and responsible approach to regulatory reform, the province is moving toward a modern, streamlined and simplified regulatory system that supports the ministry's mandate and the government's Five Great Goals. This initiative makes it easier, faster and more efficient for individuals, small business and industry to access government programs and services, and comply with regulations.

The ministry provides strategic leadership by identifying and coordinating the implementation of initiatives to support regulatory reform across government. Realization of this goal and its objectives is supported by the government-wide commitment to the benefits of regulatory reform.

Over the last five years, the government has exceeded its goal of eliminating one-third of government requirements, achieving a 41 per cent reduction. A new, key initiative over the next three years is a focus on citizen-centred regulatory reform. Refer to Regulatory Reform in British Columbia (page 15) for further information.

Core Business Areas: Small Business and Regulatory Reform.

Objective 1: Improve regulatory quality.

This objective focuses on increasing the province's economic and business competitiveness by improving the quality of the regulatory regime in British Columbia. Developing a streamlined and responsive regulatory system includes eliminating unneeded regulations and improving the quality of existing and new regulations.

Reviews and reforms of legislation, regulations and associated administrative policies help to modernize, streamline, harmonize and eliminate redundancies. Continued improvement in the regulatory climate is key to attracting new investment and building a more competitive provincial economy.

Objective 2: Minimize the regulatory burden on British Columbians.

Reducing regulatory requirements is the foundation on which government's regulatory reform initiative was built. This objective focuses on reducing regulatory burden to minimize unnecessary government involvement in the lives of British Columbians and reduce the cost of doing business in British Columbia. A streamlined, simplified regulatory environment helps maintain the competitiveness of the province as a place to live, do business and create jobs.

Strategies and Results

Improve regulatory quality by ensuring continued adherence to the Regulatory Reform Policy.

All new legislation and regulations in 2005/06, that were not exempt from the policy requirements, complied with the Regulatory Criteria Checklist.

Maintain regulatory reduction achievements as of June 2004.

Government has eliminated over 11,000 additional regulatory requirements compared to the count as of June 2004; with about 3,900 regulations eliminated during the past fiscal year.

Build capacity within the public service for regulatory reform through activities such as developing guidance and resource materials, training, workshops and conferences to share best practices.

The ministry enhanced the regulatory reform website http://www.regulatoryreform.gov.bc.ca to include a toolbox and resource materials for government regulators. These enhancements provide concepts, methods and ideas for policy development to help craft better regulatory approaches that adhere to the BC Regulatory Reform Policy, achieve objectives and minimize regulatory burden.
The ministry conducted 25 one-on-one training sessions with regulatory reform file managers across government. This training assists ministries to manage their regulatory reform initiatives.
The ministry led four workshops to build capacity for regulatory reform within government — Regulatory Requirement Database and Regulatory Count Integrity, Three Year Regulatory Reform Plans, Regulatory Reform Policy and Checklist, and Citizen Centred Regulatory Reform.
The ministry presented a one-day conference in March 2005, Smart Regulations at Work in BC. The conference was designed to build capacity in government for regulatory reform and 'smart regulations' through the sharing of information on successful initiatives and priorities for the future. Over 200 participants attended the conference.

Performance Measures and Results

Regulatory quality — percentage of new legislation and regulations meeting regulatory reform criteria.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Regulatory quality — percentage of new legislation and regulations meeting regulatory reform criteria.			New measure in 2005/06	100%	100%	Achieved Target

Source: Ministry of Small Business and Revenue business information systems.

Importance

This measure demonstrates the government's commitment to improve the regulatory regime in British Columbia. The quality of proposed legislation is managed through the use of the Regulatory Reform Policy. This measure reports on the proportion of proposed legislation, policies and regulations, introduced in the last fiscal year, evaluated according to the Regulatory Criteria Checklist as set out in the Regulatory Reform Policy (refer to Figure 1). The criteria are based on internationally recognized principles of good quality regulatory design.

Explanation of performance

In 2001, the B.C. Government directed that all proposed legislation and regulations be developed in compliance with the Regulatory Criteria Checklist of the Regulatory Reform Policy. Exemptions from the regulatory criteria are permitted under specific, documented conditions, and require approval of the Minister responsible. The checklist ensures new or amended legislation is reviewed based on internationally recognized principles of good quality regulatory design, thereby contributing to the improvement of the overall regulatory environment in British Columbia.

The target established for 2005/06 was achieved. All new legislation and regulations in 2005/06, that were not exempt from the policy requirements, complied with the regulatory reform criteria. Of 29 new acts and regulations, fifteen new acts and regulations were introduced and brought into force, and all were evaluated according to the ten regulatory reform criteria. Fourteen new acts and regulations were exempt because they were non-regulatory or transitional in nature, housekeeping changes to clarify or correct a provision or required under a national uniform legislation or regulatory scheme.

Beginning in 2006/07, this performance measure will be monitored internally. The ministry will introduce a new measure to track government-wide efforts to streamline and simplify access to government programs and services, and reduce the steps required to comply with regulations. The new measure will focus on success achieved through citizen-centred regulatory reform initiatives. It will be developed in 2006/07. Performance reporting will begin in 2007/08.

Figure 1: Regulatory Criteria Checklist.

Regulatory Criteria Checklist

Reverse onus: need for the regulation is justified.
Regulatory design is results-based: design reflects government's commitment to regulations that use scientific evidence and, where feasible, market incentives to achieve compliance and regulatory objectives.
Transparent development of regulatory requirements: views of interested parties have been considered.
Cost-benefit analysis completed: a cost-benefit analysis of the regulation has been completed.
Competitive analysis completed: impact of regulatory requirements has been assessed and compared with equivalent regimes in other jurisdictions.
Regulatory requirements avoid or eliminate duplication with other jurisdictions: duplication or overlap with requirements imposed by federal or local government has been avoided.
Timeliness of regulatory response: steps undertaken to ensure those administering the regulation will respond in a timely way to those affected.
Plain language: plain language has been used to draft the legislation.
Sunset review and expiry provisions: need of periodic review of regulation has been considered.
Replacement principle applied: one regulatory requirement eliminated for each new regulation introduced.

Source: Ministry of Small Business and Revenue; http://www.regulatoryreform.gov.bc.ca/.

Regulatory burden — government-wide regulatory requirements.

Performance Measure	June 2001 Actual	June 2004 Actual	June 2005 Actual	2005/06 Target	2005/06 Actual	Results
Regulatory burden — government-wide regulatory requirements.	382,139	237,893	230,297	0% net increase over June 2004 Actual (237,893)	5% decrease over June 2004 Actual (226,433)	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.

Importance

This measure tracks the total number of regulatory requirements administered by provincial ministries and government agencies. The number of government-wide regulatory requirements provides a good indication of the overall regulatory burden on British Columbians. Reducing regulatory burden makes it easier, faster and more efficient for individuals and businesses to deal with government.

Explanation of Performance

The target for 2005/06 — a zero net increase over June 2004 achievements — was exceeded. Total government regulations have been reduced by five per cent over June 2004 (a reduction of 11,460 regulations), with a two per cent reduction achieved within the past fiscal (a reduction of 3,864 regulations).

Government set priorities in the areas of employment standards, safety standards, liquor control and licensing, land use management and the resource sectors. Many of the changes exemplify the shift towards results-based regulation — encouraging innovation, competitiveness and economic growth.

Looking to the next three year period, ministries and agencies collectively are expected to continue to maintain their June 2004 regulatory reduction achievements. These targets reflect government's ongoing commitment to maintain the regulatory reduction achievements realized in the first four years of the regulatory reform initiative and demonstrate the government's commitment to reduce the regulatory burden on individuals, small business and industry in British Columbia.

Goal 3: Maximize voluntary compliance.

Voluntary compliance is the foundation of the taxation system in British Columbia, and is central to the ministry's revenue administration efforts. Voluntary compliance means individuals and businesses meet their financial obligations without the need for ministry intervention through audit, compliance or collection activities. It is the most efficient and effective means of administering revenue owed to government.

Improvements in voluntary compliance result in increased revenues to fund important government programs and services, contributing to the achievement of the ministry's mandate to identify and collect amounts owed to government, and supporting all of the government's Five Great Goals.

The ministry's success in meeting this goal depends on the willingness and ability of customers to pay the correct amount on time. It is expected voluntary compliance will increase if the ministry makes it easier for individuals and businesses to identify and understand their financial obligations, and provides a range of payment options.

Core Business Areas: Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Maximize the use of new electronic technologies to facilitate ease of transactions.

Providing a range of payment options to facilitate payment of financial obligations to government is key to attaining Goal 3. The ministry has focused on expanding electronic payment processes because they are designed to be faster and easier for customers to use, and more cost effective to operate than manual payment processing systems. It has been the ministry's experience that voluntary compliance increases as payment options are expanded.

The expansion of electronic payment options has been a ministry priority for several years. The ministry has enjoyed significant success with the number of electronic payments increasing from 2.7 million in 2002/03 to 4.1 million in 2005/06. This initiative is relatively mature, with a variety of electronic payment options in place for the ministry's major programs.

Objective 2: Customers understand their obligations and entitlements, and pay the correct amount on time.

The ministry has focused efforts on identifying and implementing quality customer service initiatives to respond to customers' needs for information to assist them in identifying and understanding their financial obligations to government. It is expected voluntary compliance will increase if customers understand and accept their financial obligations.

Strategies and Results

Help British Columbians to better understand their financial obligations to government; improve information and service to the public.

The ministry is committed to service excellence based on a citizen-centred approach to service delivery. The ministry helps British Columbians to better understand their financial rights and obligations by providing clear, complete, accurate and timely information. This includes providing educational sessions and seminars across the province, timely statutory interpretation and ruling services, and multi-channel access to information outlining financial obligations, filing due dates, methods of filing and payment, and contact information for questions. To ensure information, education and outreach programs meet the needs of customers, the ministry consults with a wide variety of stakeholders to identify their requirements and priorities.
The ministry offers free tax seminars and workshops throughout British Columbia. This service is available to taxpayers from any size business. Ministry staff are available to meet with businesses to provide presentations on any provincial tax-related topic or will tailor a seminar to meet their needs. This includes developing and presenting industry-specific seminars for individual associations. For more information, view online at http://www.rev.gov.bc.ca/seminars/index.asp.

Refer to Highlights section (page 9) for specific examples of citizen-centred customer service initiatives.

Make it as easy as possible to comply with financial obligations.

To facilitate ease of payment, the ministry has introduced expanded options for making payments electronically, is focusing education and awareness programs on areas of lower participation, and is identifying and removing barriers, where possible, to the use of electronic payments. For example:

All major programs have access to a variety of electronic payment options.
The ministry focused efforts to increase electronic payments for forestry invoices and receivables. A brochure on available payment options is proved at ministry offices and ministry staff are available to assist customers who want to make use of an electronic payment option. Revenue received electronically in 2005/06 increased $117 million over 2004/05 (a 22 per cent increase in revenue received electronically and a 7 per cent increase in number of electronic payments).
A new initiative in 2005/06 was the introduction of electronic filing of information required to calculate royalties for oil producers. This has reduced administrative burden on both the producers and ministry, and increased the accuracy of the information provided with the elimination of multiple manual steps.
The ministry, participating in a cross government initiative, is currently exploring the use of credit cards as a payment option for a wider range of financial obligations to government. If successful, this will add to the suite of modern, convenient payment options already available to customers, supporting the government's commitment to citizen-centred service delivery.

Performance Measures and Results

Ministry revenue administered without intervention.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Percentage of revenue administered without intervention.	96.1%	95.7%	97.2%	97.9%	97.7%	Mostly Achieved Target

Source: Ministry of Small Business and Revenue business information systems.

Importance

This is an overall measure of the ministry's success in meeting Goal 3 — maximizing voluntary compliance. This measure reports the percentage of revenue recognized as a financial obligation to government, either by the ministry or self-assessed by individuals and businesses, without audit or compliance intervention. Seemingly minor increases in performance translate into the potential for millions of dollars in voluntary payments.

Explanation of performance

The target established for 2005/06 was mostly achieved, with 97.7 per cent of revenue identified without intervention. The target for this measure is established based on estimates of both total and incremental revenue, and reflects the projected balance between the two. Due to stronger than anticipated performance in identifying incremental revenue (refer to page 44), performance for this measure is slightly below target.

However, performance has improved over the last four years, with the ministry's best performance to date realized in 2005/06. Although performance increases are small, they result in a significant increase in voluntarily identified revenue. In 2005/06, an estimated $1.2 billion in additional revenue was identified without intervention. This performance was supported by the ministry's information, education and outreach services, and the strong performance of the provincial economy.

In 2006/07, this measure will be replaced with a new measure — percentage of identified revenue collected. The new measure reports on the ministry's success in collecting all amounts identified as owed to government (identified by the ministry, voluntarily identified by individuals and businesses, and identified through ministry intervention). A baseline will be established in 2006/07 and reporting will begin in 2007/08.

Percentage of revenue received through electronic payments.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Percentage of revenue received through electronic payments.¹	58% ($6.0 B)² (2.7 M)³	57.7% ($6.8 B)² (3.3 M)³	58.8% ($7.5 B)² (3.3 M)³	65%	64.6% ($9.0 B)² (4.1 M)³	Mostly Achieved Target

Source: Ministry of Small Business and Revenue business information systems.
¹	Electronic payments — electronic funds transfer, electronic data interchange payment from financial payment systems, payments made through personal computer and telephone banking, preauthorized payments, pay direct e-banking and group e-banking, credit card payments and those made at a financial institution or Government Agent offices and transferred to the ministry electronically. The range of payment options available varies based on the type of payment.
²	Revenue received electronically.
³	Number of payments received electronically.

Importance

This measure tracks the replacement of physical payments (cash, cheques and drafts) with electronic payments, reporting on the percentage of revenue received electronically. Results are an indicator of the success of the ministry's e-service initiatives, monitoring the public's use of the suite of electronic options available for payments. If these initiatives are successful, it is expected a greater proportion of revenue and payments will be received electronically.

Explanation of Performance

In 2005/06, the ministry received $14 billion in direct payments with $9.04 billion (64.6 per cent) received electronically. This performance falls short of the target set. However, performance has increased significantly over 2004/05 and is the best recorded to date.

The ministry has achieved improvements in the amount of revenue and the number of payments received electronically over the past four years. Both the amount of revenue received electronically and the number of electronic payments have increased 50 per cent over the past four years.

The ministry's improved performance in 2005/06 can be attributed to the increased uptake of electronic payment options for property tax (82.5 per cent of revenue was received electronically compared to 77 per cent in 2004/05) and consumption taxes (72.1 per cent of revenue was received electronically compared to 66.8 per cent in 2004/05). These two tax areas constitute approximately 69 per cent of all revenue received electronically by the ministry in 2005/06. Refer to Figure 2.

The ministry did not fully achieve its target due to lower than expected revenue received electronically for Other taxes, Medical Services Plan (MSP) premiums and Natural Resource Revenues (with the exception of Forest revenues). In some cases, the actual number of electronic payments were high — almost 3.2 million individual MSP premium payments were made electronically representing 81.5 per cent of all MSP payments received — but the overall dollar value was low due to clients with large payments continuing to use physical payment methods. Only 31.0 per cent of the revenue received for MSP premiums resulted from electronic payments.

The ministry will continue to focus education and awareness programs on areas of lower participation, and identify and remove barriers, where possible, to the use of existing electronic payment options.

This measure is not included in the 2006/07 – 2008/09 Service Plan. The ministry has seen increasing use of electronic payment options over the last three years and felt it was time to retire this performance measure so new initiatives of the ministry can be reported on in the future. Performance will be monitored internally.

Figure 2: Electronic Revenue and Payments by Revenue Type, 2005/06.

Revenue Type	Revenue Received Electronically			Payments Received Electronically
Revenue Type	Dollars (in millions)	Per Cent For Revenue Type	Per Cent By Total Revenue Received	Number	Per Cent For Revenue Type
Consumption taxes¹	4,697	72.1	52	390,000	39.1
Property taxes	1,532	82.5	17	116,000	30.4
Other taxes²	342	57.2	4	4,600	26.5
Natural Resource Revenues³	1,961	55.3	21	34,000	48.5
Medical Services Plan (MSP) Premiums	429	31.0	5	3,160,000	81.5
Non–tax debt collections⁴	83	83.2	1	361,000	85.0
Total	9,044	64.6	100	4,065,600	76.1

Source: Ministry of Small Business and Revenue business information systems.
¹	Consumption taxes — provincial sales, hotel room, motor fuel, and tobacco taxes.
²	Other taxes — corporation capital, insurance premium and logging taxes.
³	Natural Resource Revenues — royalties, freehold production taxes and resource management fees levied on the production of mineral, oil and gas, and forest revenues.
⁴	Non-tax debt collections — Immigrant Sponsorship Program, B.C. Ambulance Service, British Columbia Student Assistance Program, Employment and Assistance Program and court fines.

Percentage of on-time payments.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Percentage of on-time payments.¹	85% (858,000)²	82.4% (794,000)²	89.2% (new baseline) (865,000)²	89%	88.9% (874,000)²	Mostly Achieved Target

Source: Ministry of Small Business and Revenue business information systems.
¹	The 2004/05 Actual has been restated to include only the on-time returns of those obligated to make a payment and excludes those required to submit a remittance when no tax is owed. This represents a new baseline for this performance measure.
²	The number of on-time payments received.

Importance

This measure tracks the remittance of consumption taxes, property taxes, and mineral, oil and gas taxes and royalties, calculating the percentage paid on or before their legislated due date. It provides an indication of the taxpayers' understanding of their financial obligations and their willingness to comply. If customer service initiatives are successful, it is anticipated the percentage of on-time payments will increase as more taxpayers understand their responsibilities and the legislative requirements of the tax system.

In 2005/06, the payments comprising this measure represented approximately 76 per cent of total ministry payments, reflecting $6.9 billion in revenue or 52 per cent of ministry revenue (excluding that collected by the CRA for the ministry).

Explanation of Performance

Of the 973,000 tax payments received by the ministry in 2005/06, 874,000 (88.9 per cent) were received by their legislated due date. This performance mostly meets the 2005/06 target. However, it reflects a slight decline in performance compared to 2004/05.

Performance reflects a lower than expected proportion of on-time payments for provincial sales tax — the primary driver of ministry success in this area. Performance in other areas of the ministry improved slightly over 2004/05 and the number of on-time payments increased across the ministry. Refer to Figure 3.

Comprehensive public information, education and outreach programs targeted at both businesses and individuals supported ministry performance. This focus will continue and be expanded to support achievement of performance targets for the next three years. Future targets have been set to achieve incremental improvement, building on the current high level of achievement.

Figure 3: Comparison of On-time Payment Performance 2004/05 – 2005/06.

Payment Type	2004/05		2005/06
Payment Type	Number of On-time Payments	Per cent of On-time Payments	Number of On-time Payments	Per cent of On-time Payments
Consumption Tax (provincial sales tax and hotel tax)	558,000	91.5	561,000	90.6
Rural Property Tax	285,000	85.5	289,000	85.7
Mineral, Oil and Gas Revenues	22,000	88.9	24,000	91.1
Total	865,000	89.4	874,000	88.9

Source: Ministry of Small Business and Revenue business information systems.

Goal 4: Collection of all outstanding amounts owed to British Columbians.

The ministry is responsible for identifying and collecting amounts owed to government, for those statutes it administers, through fair, efficient and effective tax administration and revenue management processes. Successful tax administration and revenue management depend on the voluntary payment of financial obligations, balanced by education, assistance, audit, compliance and collection activities.

The ministry undertakes audit, enforcement and collections activities to recover outstanding amounts owed to British Columbians, and to promote fairness and equity by leveling the playing field for the majority of customers who are meeting their financial obligations voluntarily. These activities assist in identifying monies owed, ensuring amounts owed are collected, deterring customers who might otherwise avoid paying, and educating customers and debtors on their obligations. Education on obligations and the deterrent effect of audits also contribute to increased voluntary compliance (refer to Goal 3).

Success in Goal 4 means monies owed to British Columbians are identified, recovered and made available to address government strategic priorities. This goal contributes directly to the achievement of the ministry's mandate — to identify and collect amounts owed to government — and supports all of the government's Five Great Goals.

The ministry's success can be influenced by conditions beyond its control, most notably, the health of the provincial economy, which can impact on the total revenue the ministry receives and the voluntary payment of financial obligations. Refer to Strategic Context (page 14).

Core Business Areas: Revenue Programs, Revenue Services.

Objective 1: British Columbians receive the revenue they are due.

This objective focuses on identifying outstanding revenues owed to British Columbians through the ministry's audit and compliance programs, and ensuring individuals and businesses are meeting legislated requirements. These activities result in the identification of revenues owed to government, which otherwise would not have been received.

Objective 2: British Columbians receive the debt recoveries they are due.

The ministry undertakes collection activities to obtain repayment of outstanding amounts owed to British Columbians. The ministry's efforts result in payment of a wide variety of tax and non-tax overdue receivables, and contribute to a reduction in the overall amount of government receivables.

A key initiative of the ministry is the development of a new Revenue Management System. Refer to Strategies and Results following.

Strategies and Results

To recover outstanding monies owed to British Columbians and to promote fairness and equity, the ministry uses the following strategies to identify and collect all outstanding amounts when a customer fails to meet their obligations, either willfully or due to an error:

Conduct compliance and audits activities.

The ministry ensures the audit and compliance program is adequately resourced, focuses efforts on areas of highest risk of non-compliance and levels the playing field for taxpayers.

In 2005/06, the ministry exceeded all of the performance targets associated with its audit and compliance program.
With amendments to the Forest Act, the ministry will begin the implementation of a forest revenue (stumpage) audit program in 2006/07, working in consultation with the forest industry. Stumpage revenues are worth $1 billion to the Province annually and rely upon a self-assessing system. Currently, these revenues are the only major revenue source without a comprehensive audit program. This program will further protect the revenue the public is receiving from Crown forest resources.

Improve the timelines of assessment practices.

The ministry manages its workload to ensure the timely issuance of assessments following audit and compliance activities. This reflects good customer service and increases the chance of recovering outstanding amounts owed to government.

The ministry undertook a special project to reduce the backlog of property transfer tax compliance reviews resulting from a strong real estate market to provide more timely assessments.

Improve the collaboration and accountability across jurisdictions to pursue joint tax enforcement activities.

The ministry has developed, with the Canada Revenue Agency (CRA), an annual work plan to help ensure personal and corporate income tax revenue due to the Province is identified and received in a timely manner. The work plan identifies both ongoing and one-time initiatives, accountabilities and, where appropriate, timelines and performance measures.
The ministry is working closely with the CRA and the Vancouver Organizing Committee to ensure contractors, sponsors and suppliers, particularly those from other provinces and countries, are aware of their tax obligations in British Columbia while preparing for and operating during the 2010 Olympic and Paralympic Winter Games. The ministry's focus is on increasing awareness by providing educational materials and answering specific tax questions.

Improve collection processes.

The ministry focuses resources on debt collection functions and strives to continually improve revenue recovery tools and approaches to ensure collection functions are effective.
The ministry has entered into an agreement with a private sector service provider to further enhance the effectiveness of revenue and debt collection administration. Phase 1 of the Revenue Management System was implemented in April 2006. A benefit of the new system is the increased ability to collect outstanding amounts owed to the Province. This will be accomplished by helping customers understand how much they owe, offering a variety of payment options and using innovative collection processes. The results will be reduced bad debt expenses, and lower borrowing costs to government because of timely payments and collection of debts.
Over the past two years, the ministry has phased in enhanced debt recovery options introduced in legislation in 2004. Under consumption tax legislation, a director of a corporation may be liable for the taxes the corporation fails to collect or remit. Directors may also be liable if the corporation fails to pay a security. A director who takes reasonable steps to ensure that the corporation pays its taxes or security will not be liable.

Incremental revenue.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Incremental revenue.	$410.2 M (308.2 M)¹	$479.3 M ($353.2 M)¹	$330.7 M (251.8 M)¹	$225.6 M	$310.5 M ($279.8 M)¹	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.
¹	Incremental revenue normalized to remove extraordinary recoveries. Extraordinary recoveries include unanticipated and one-time incremental revenue.

Importance

This measure is an indication of the ministry's success in identifying outstanding amounts owed to government through audit and compliance activities, and contributes to the achievement of Goal 4. It reports on the amount of revenue, primarily from taxes, identified as owed to government as a result of ministry intervention. The amounts identified are incremental revenue. Incremental revenue targets are approved annually by Treasury Board and are set out under the Balanced Budget and Ministerial Accountability Act. Achievement of the annual target is a key accountability of the Minister of Small Business and Revenue.

Explanation of performance

In 2005/06, the Minister was accountable for earning $225.6 million dollars in incremental revenue in respect of revenue payable under the enactments he administers. The ministry exceeded its target, identifying $310.5 million in incremental revenue. A substantial amount of revenue is derived from out-of-province audit assessments to ensure British Columbia businesses are not at a tax disadvantage compared to their out-of-province counterparts operating in the province.

The ministry sets annual incremental revenue targets based on the best information available at the time. Through the year, it explores new and emerging opportunities and focuses its resources in areas where risk of revenue loss is greatest. Achievement of targets are due to a number of factors, including the variability of some revenues, certain extraordinary revenues and success in assessing revenues through focused attention on areas at higher risk of non-compliance.

In 2005/06, extraordinary revenues included greater than anticipated recoveries with the conclusion of audits of general corporations under the Corporation Capital Tax Act, increased property transfer tax recoveries reflecting a strong real estate market, and higher than expected incremental revenues from natural resource royalties due to strong economic performance in the oil and gas sector. In addition, the ministry recorded lower than anticipated revenue refunds from taxpayer requests. However, extraordinary incremental assessments have declined over the past four years due to success in identifying outstanding revenues in areas of highest risk of non-compliance.

Incremental revenues have been gradually decreasing over the last few years and the ministry expects this trend to continue. Continued decreases reflect changes in the tax regime, the wrap-up of special compliance projects and increased voluntary compliance with financial obligations. The ministry will continue to focus audit and compliance activities on areas assessed at higher risk of non-compliance, and the implementation of the new forest audit program.

Beginning in 2006/07, the ministry will report on both the percentage of the incremental revenue target achieved and the dollar value as set out in the Balanced Budget Ministerial Accountability Act.

Number of reviews and audits and reviews performed.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Number of reviews and audits performed.¹	194,104	184,441	187,749	168,000	189,856	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.
¹	Reviews and audits vary from the review of grant claims, tax expenditures and exemptions and compliance with legislation, to the examination of financial records and legal documents.

Importance

This measure reports on the number of reviews and audits performed under the tax and royalty statutes the ministry administers. It provides an indication of the level of effort the ministry is employing to ensure British Columbians receive the revenue they are due. Maintaining an effective audit and compliance program allows the ministry to identify and collect outstanding amounts owed to government and ensure a level playing field for the vast majority of British Columbians who voluntarily comply with their financial obligations.

Explanation of performance

The ministry performed 189,856 reviews and audits in 2005/06, exceeding the target. This success reflects the ministry's efforts to ensure adequate review and audit activities across the broad spectrum of tax statues the ministry administers. Performance in 2005/06 is in line with achievements in the past three years.

Changes to the tax regime — for example, the phasing out of Corporation Capital Tax for general corporations — will mean the reallocation of some auditors to new portfolios, providing an opportunity to focus on other areas of non-compliance. The ministry will establish new targets for the next three years.

Average tax assessment per audit position.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Average tax assessment per audit position.	$1.1 M ($632,000)¹	$924,000 ($646,000)¹	$889,000 ($667,000)¹	$525,000	$888,000 ($802,000)¹	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.
¹	The annual tax assessment per audit position normalized to remove extraordinary recoveries. Extraordinary recoveries include unanticipated and one-time incremental revenue.

Importance

This measure reports on the average amount of incremental revenue identified through reviews and audit assessments, per audit position. It is an indication of the effectiveness of the audit and compliance program in targeting review and audit activities on areas of non-compliance. This measure demonstrates the balance between the resources allocated to the audit and compliance program and the revenue the program recovers for government. The identification of incremental revenue supports the collection of all outstanding amounts owed to government.¹⁸

Explanation of performance

The ministry exceeded its target. Within the ministry, there is a wide variance in the assessment per audit position based on the type of review or audit performed. Details in the table above reflect performance at the ministry level. Performance exceeded target even though the ministry did not make significant changes in resources dedicated to this program. Performance is also on par with the past three years.

Future performance targets will reflect the adjustments to be made to incremental revenue targets.


¹⁸	This measure is used to assess overall and average ministry activity for the purposes of setting strategic direction and expenditure/resource allocation. It is not used to monitor individuals' performance.

Debt collections.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Debt collections.	$357.9 M	$348.4 M	$337.5 M	$324.0 M	$349.8 M	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.

Importance

This measure reports on the amount of debt recovered through the ministry's debt collection activities. It is an indicator of the effectiveness of the ministry's activities in collecting its portfolio of overdue accounts. Debt collection contributes to the recovery of revenue owed to government and to the ministry's success in achieving Goal 4.

Explanation of performance

The ministry exceeded it debt collection target, collecting $349.8 million in overdue accounts receivable. Higher than expected debt recoveries were realized in both tax and non-tax portfolios. In part, this reflects the relationship between the amount of incremental revenue assessed by the ministry and the level of debt collection activity the ministry undertakes. Higher than anticipated incremental revenue leads to more active debt collection to recover amounts identified as owed to government.

The ministry's success was supported by earlier collections intervention, the dedication of additional resources to the collection of non-tax portfolios, and focusing resources on higher risk debt portfolios. The ministry's overall success also reflects the positive impact of a strong economy.

Over the next three years, more effective business processes, the consistent application of early intervention across collection portfolios and the transfer of debt portfolios from other ministries to the Ministry of Small Business and Revenue will positively impact on debt collection results. However, over time, the trend will be one of decline as there will be less debt to collect and increased voluntary compliance.

Beginning in 2006/07, the ministry will report on both the amount of debt collected and the percentage of overdue accounts collected. This new measure better demonstrates the ministry's success in managing the accounts receivable portfolio. A baseline and targets will be established in 2006/07, and reporting will begin in 2007/08.

Average recovery per tax collection position.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Average recovery per tax collection position.¹	$4.9 M	$4.3 M	$3.9 M	$3.29 M	$3.56 M	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.
¹	In 2005/06, debt collection for tax portfolios comprised over 60 per cent of all debt collections. Non-tax debt collections are managed by the ministry's private sector service provider and are excluded from this measure, but included in the ministry's debt collection results.

Importance

This measure reports on the average debt recovery per tax collection position. It is a measure of the effectiveness of the ministry's collections program in recovering outstanding tax revenue for government.¹⁹

Explanation of performance

In 2005/06, the ministry achieved an average recovery of $3.56 million per tax collection position, exceeding the ministry target of $3.29 million. The ministry exceeded its target due to strong collections performance across the majority of tax debt portfolios without a significant change in resources dedicated to this program. Ministry efforts have lowered the outstanding tax accounts receivable by $22 million from $87 million in 2004/05 to $65 million in 2005/06.

Beginning in 2006/07, this measure will be monitored internally.


¹⁹	This measure is used to assess overall and average ministry activity for the purposes of setting strategic direction and expenditure/resource allocation. It is not used to monitor individuals' performance.

Percentage of total government accounts receivable more than 90 days overdue.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Percentage of total government accounts receivable more than 90 days overdue.¹	40%	40%	35%	41%	34%	Exceeded Target

Data is provided by the Office of the Comptroller-General.
The calculation of results for fiscal 2005/06 is consistent with prior years. However, starting in fiscal 2005/06, the ministry included revenues earned but not yet due for payment in its accounts receivable information as noted in the Explanation of Performance section, but this change is not reflected in the above table.

Importance

This measure reports on the percentage of debt owed to government that is over 90 days past due. As debt collection success tends to decrease as the debt ages, the ministry and government as a whole work to reduce the percentage of government accounts receivable more than 90 days past due. Collection of aged debt contributes to improved debt recovery and reduced bad debt expenses. Currently, the ministry is either accountable for, or manages, a portion of the total government accounts receivable over 90 days overdue. The ministry's success in reducing the overdue debt under its administration contributes to improvement in government's overall performance.

Explanation of Performance

The percentage of total government trade accounts receivable more than 90 days past due was 34 per cent in 2005/06, exceeding the target. This is an improvement from 35 per cent in 2004/05.

The following provides an overview of the ministry's collection success for both tax and non-tax portfolios, contributing to the overall government performance for this measure. Refer to Figure 4.

The total trade accounts receivable²⁰ of government is $2.671 billion of which the ministry is accountable for $1.722 billion (64.5 per cent). The ministry's accounts receivable include both tax accounts receivable ($1.009 billion) resulting from the tax statutes administered by the ministry, and non-tax accounts receivable ($713 million) the ministry manages on behalf of other ministries.

Ministry tax accounts receivable over 90 days past due decreased by 32 per cent, from $65 million in 2004/05 to $44 million in 2005/06. These receivables represent approximately 5 per cent of total tax receivables.

As of December 2004, the management of the majority of non-tax receivables transitioned to the ministry's private sector service provider. Over the past year, total non-tax accounts receivable over 90 days past due decreased by approximately 2 per cent, from $448 million in 2004/05 to $440 million in 2005/06. Over 90 days past due receivables represent almost 62 per cent of non-tax total receivables. This reflects that, with the exception of the Medical Services Plan premiums, most portfolios are received for collection when they are more than 90 days overdue.

The ministry's improvement in both total accounts receivable and those over 90 days past due are a result of its successful debt collections program and the identification of some longstanding debts as uncollectible. The ministry's efforts to clean up debts accumulated over several years will continue in 2006/07.


²⁰	Trade accounts receivable include accounts for which revenue has been earned but is not yet due for payment. It excludes loans and advances, or debt due from other governments.

Figure 4: Government Accounts Receivable, 2004/05 – 2005/06.

Total Government Receivables 2005/06: $2.671 B 2004/05: $2.527 B
Total Ministry of Small Business and Revenue accounts receivable¹ 2005/06: $1.722 B 2004/05: $1.668 B				Managed by other government ministries and agencies
Tax accounts receivable managed by the Ministry of Small Business and Revenue 2005/06: $1.009 B 2004/05: $899 M		Non-tax accounts receivable managed by the Ministry of Small Business and Revenue and the ministry's private sector service delivery provider 2005/06: $713 M 2004/05: $769 M
Accrued/Not Yet Due 2005/06: $944 M 2004/05: $812 M		Accrued/Not Yet Due 2005/06: $104 M 2004/05: $131 M
Less than 90 days 2005/06: $21 M 2004/05: $22 M	Over 90 days 2005/06: $44 M 2004/05: $65 M	Less than 90 days 2005/06: $169 M 2004/05: $190 M	Over 90 days 2005/06: $440 M 2004/05: $448 M

¹	Accounts receivable includes revenue earned but not yet due.

Goal 5: Fair, efficient and equitable administration that meets customers' needs.

The ministry is committed to improving its regulatory and administrative frameworks. The ministry is focused on simplifying, streamlining and enhancing the fairness of the ministry's regulatory environment, tax legislation and administrative processes to support improved customer service.

Provincial tax legislation and policy, and the regulatory environment are factors that can influence the competitiveness of the province's investment climate compared to other jurisdictions. A current and customer-centered tax regime and regulatory environment assists in maintaining the competitiveness of the province as a place to live, do business and create jobs. In this regard, the ministry implemented the British Columbia Provincial Sales Tax Review (refer to Highlights; page 8) and is committed to easing the administrative burden on taxpayers by streamlining current business processes in support of the government's Regulatory Reform initiative. Refer to Regulatory Reform (page 59).

The ministry is also focusing on improving administrative processes to support excellence in customer service. A specific focus for the ministry is reducing the time it takes to resolve an appeal by a taxpayer, and reviewing the property assessment and appeal processes to identify customer service improvements, and streamline and simplify existing processes.

Achievement of Goal 5 will ease the administrative burden on customers, enhance the business climate within British Columbia, and improve customer service and ministry efficiency. This goal contributes to the achievement of the government's Great Goal to create more jobs per capita than anywhere else in Canada, and the government-wide citizen-centred service initiative.

Core Business Areas: Small Business and Regulatory Reform, Revenue Programs, Revenue Services, Property Assessment Services, Executive and Support Services.

Objective 1: Improve the tax and property assessment appeals processes for administrative fairness and due process.

Statutes under the administration of the ministry allow taxpayers to appeal a tax or property assessment, rejected tax refund or a decision of the tax commissioner or administrator. This objective reflects the ministry's commitment to provide taxpayers and property owners with an impartial, fair and timely resolution to their appeals of tax and property assessments, directly supporting the achievement of Goal 5.

Strategies and Results

The ministry works to provide fair and equitable administration through the following strategies:

Improve legislative, regulatory and administrative frameworks to support a competitive business climate and improved customer service.

Review the provincial sales tax (PST) to make the tax fairer, more streamlined and easier to understand for taxpayers.
Meet challenging tax appeals resolution targets by identifying and implementing process improvements and ensuring the allocation of adequate resources to support timely resolution. The ministry resolved 647 appeals and shortened the time it takes to resolve appeals from an average of 12 months in 2004/05 to an average of 5.7 months in 2005/06.
In 2005/06, the ministry amended the Assessment Act to allow for recognition of circumstances, which significantly alter the value of property due to catastrophic events. Amendments provided assessors with greater discretion to recognize damage to improvements, which may significantly devalue the property. The ministry also amended its regulations to recognize campgrounds as recreational property providing some tax relief to campground operators.

Improve customer service, including streamlining and simplifying the property assessment appeals processes.

In 2005/06, the ministry enhanced the ability of members of the Property Assessment Review panel to provide fair and effective deliberations and enhanced customer service when dealing with property assessment complaints with an upgraded training and educational package.
The ministry reviews the location and number of Property Assessment Review Panels on an ongoing basis to ensure property owners have their property assessment complaints heard in, or near their home community.
For the first time in 2006, property owners were able to file complaints to the Property Assessment Review Panels online.
The ministry has also identified the need for educational and instructive material explaining the property assessment complaint and appeal process. This will be addressed in the 2006/07.
The ministry initiated a review of the property assessment and appeal process as part of a broader review of BC Assessment. A key focus of the review is to identify customer service improvements, such as increased transparency, and opportunities to streamline and simplify processes for taxpayers. Recommendations for changes to policy and legislation will be introduced in spring 2007.

Support the government-wide regulatory reform initiative.

Maintain a zero per cent increase in Ministry of Small Business and Revenue regulatory burden through 2008/09.

Progress on regulatory reform initiatives specific to the ministry can be viewed on page 59.

Performance Measures and Results

Tax appeals resolution — elapsed time from receipt of tax appeal to final decision.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Tax appeals resolution — elapsed time from receipt of tax appeal to final decision.	11.4 Months	11.7 Months	12.0 Months	6.0 Months¹	5.7 Months	Exceeded Target

Source: Ministry of Small Business and Revenue business information systems.
¹	The calculation procedure for this measure was changed in 2005/06. The calculation of the elapsed time from receipt of appeal to final decision no longer includes the days when an appeal file is put on hold due to reasons beyond the ministry's control, for example, when a taxpayer has requested an extension to submit further information to support their appeal.

Importance

This measure tracks the ministry's success in providing timely resolution to taxpayer appeals. It reports on the average time taken to resolve tax appeals (from receipt to final decision) over the course of the fiscal year.

This measure demonstrates the ministry commitment to meeting taxpayers' expectations regarding the timeliness of service they receive from the ministry. Business organizations indicated their support for this measure. As a result, this measure is one of 12 service excellence standards set out in the Taxpayer Fairness and Service Code. Refer to Appendix H.

Explanation of Performance

In 2005/06, the ministry exceeded its appeals resolution target — on average, appeals were resolved in 5.7 months (from receipt of an appeal to final decision). On an individual basis, the length of time to resolve an appeal varies dependent on such factors as the number and complexity of issues raised, facts of the case, and availability of all relevant information. The ministry's success was aided by the work completed in 2004/05²¹ to reduce the significant backlog of appeals, and the allocation of two additional FTEs to the appeals management process in 2005/06.

The ministry continued to improve its performance on a number of fronts. It has decreased both the number and age of outstanding appeals compared to the previous three years. Six hundred and forty-seven appeals were resolved, an achievement second only to performance in 2004/05, and significantly greater than performance in 2003/04 and 2002/03. Refer to Figure 5.

The ministry continues to set aggressive targets for the resolution of tax appeals over the next three years — 5.0 months in 2006/07, and 4.5 months in 2007/08 and 2008/09. The goal is to resolve appeals as quickly as possible without compromising the quality and fairness of decisions. These aggressive targets respond directly to taxpayers' expectation of timely service. However, the ministry recognizes there may be challenges in meeting these targets, such as a significant increase in the complexity or number of appeals.

²¹

In 2004/05, the ministry implemented a project to reduce the backlog of outstanding appeals. Significant additional resources were temporarily committed to the appeals management process and streamlined work processes were implemented. At the end of 2004/05, the average age of outstanding appeals had been reduced from 11 months to 5.2 months. These efforts positioned the ministry for success in meeting a significantly more challenging appeals resolution target for 2005/06.

Figure 5: Appeals Administration Process Measures, 2002/03 – 2005/06.

Figure 5.

Goal 6: Continuous performance improvement and accountability.

The ministry is committed to service excellence. This means the ministry will provide services that meet the needs of its diverse customers, stakeholders and partners. The Taxpayer Fairness and Service Code formalizes the ministry's commitment to fairness and service principles that can be expected when dealing with the ministry.

The ministry is also responsible for creating a 'centre of excellence' for tax administration and revenue management for the Province. The ministry continues to strive for improved business performance. This means encouraging creative and innovative solutions.

This goal supports the achievement of all ministry goals and its mandate by ensuring efficient and effective business operations. It also reflects the ministry's commitment to government's core values of fiscal responsibility and accountability, and to the government-wide citizen-centred service initiative.

The ministry identified two key initiatives related to this goal — develop performance measures and service excellence standards to address the commitment set out in the Taxpayer Fairness and Service Code, and implement a new Revenue Management System. Significant progress was made on both of these initiatives during 2005/06; refer to Strategies and Results following.

Core Business Areas: Small Business and Regulatory Reform, Revenue Programs, Revenue Services, Property Assessment Services, Executive and Support Services.

Objective 1: Continuously improve, streamline and simplify work processes.

Key to achieving this goal is the ministry's focus on continuously improving the way it operates and delivers its programs and services. This includes streamlining and simplifying the way the ministry does its work to ensure it supports improved customer service, while making the most efficient use of resources.

Strategies and Results

Leverage capacity and economies of scale to increase efficiency. Assess and adopt leading revenue management practices.

In 2004, the Province of British Columbia signed a 10-year agreement with EDS Advanced Solutions Inc. (private sector service provider) to work with the Ministry of Small Business and Revenue to build and operate a 'centre of excellence' for revenue management. The agreement will generate projected net benefits of $382 million to the Province over the 10 year period and leverage private sector expertise, technology and investment capital. The agreement transfers the up-front investment and project implantation risk of building the centre of excellence from the Province to the service provider.
Over the first year of operations, the ministry's private sector service provider implemented significant service and business process improvements, resulting in more citizen-centered service delivery. Improved technology and additional staffing during peak hours handled increased customer call volumes, provided faster telephone response times, and resulted in fewer customers abandoning their call or reaching a busy signal before accessing a customer service representative.
The ministry worked with the service provider to transform and streamline revenue management business processes, and establish consistent application of collection guidelines and principles to provide clear information, and increase fairness and equity for customers.¹

Implement a new Revenue Management System that transforms and consolidates revenue management systems from across government into the new centralized system.

Substantial work was completed on the Revenue Management System in 2005/06 with phase 1 of the system implemented in April 2006. The ministry will now begin working with client ministries to transition their revenue management systems to this centralized system.

Compare ministry performance with other jurisdictions.

The ministry worked with the federal government and other provincial jurisdictions to explore benchmarking revenue management performance measures. In 2006/07, the ministry will work with interested agencies to develop a community of practice and share best practices in performance management. Refer to Appendix G.

Develop performance measures and service excellence standards to address the commitments set out in the Taxpayer Fairness and Service Code.

In October 2005, the ministry introduced 12 service excellence standards to monitor timeliness and accessibility of ministry services. These service standards are included in the 2006/07 – 2008/09 Service Plan and reporting will begin in 2006/07. Refer to Appendix H.

¹	For further information, view the Revenue Services of British Columbia Annual Report: December 2004 to December 2005 online at http://www.sbr.gov.bc.ca/collections/Annual_Report-2005.pdf.

Performance Measures and Results

Receipt to deposit turnaround time.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Receipt to deposit turnaround time.¹	New measure in 2003/04	3 Days	2 Days	95% on Same Day¹	89% on Same Day	Missed Target

Source: Ministry of Small Business and Revenue business information systems.

This measure reports on receipt to deposit turnaround time for provincial sales tax and Medical Services Plan premium payments received by cheque, which represent 77 per cent of all cheques processed. The monitoring of other non-electronic payment types are excluded as they represent less than one per cent of these payments. Electronic payments are excluded as they are automatically deposited into the government's account.

Importance

This measure tracks the duration between when payment enters payment processing and when it is deposited to the government's account. This is a measure of the efficiency of the ministry's cash handling processes. Decreasing the deposit turnaround time demonstrates improvements to these processes and reduces the foregone interest income to government.

Explanation of Performance

The ministry fell short of its target of depositing 95 per cent of provincial sales tax and Medical Services Plan premium payments on the day received. At the end of 2005/06, the ministry was achieving an average one day turnaround time for deposits for 89 per cent of payments. This performance represents a significant improvement over 2004/05 and was enabled by the introduction of a new payment processing system in the last quarter of 2005/06. It is expected this new system will allow the ministry to achieve a same day turnaround in 2006/07.

Beginning in 2006/07, this measure will be monitored internally.

Cost per transaction.

Cost to collect $1 of debt.

Performance Measures	2002/03 Actual	2003/04 Actual	2004/05 Actual	2005/06 Target	2005/06 Actual	Results
Cost per transaction.	New measure in 2003/04	$0.82	$0.68	$0.75	—	Not Reported¹
Cost to collect $1 of debt.		New measure in 2004/05	$0.05 ($0.024)²	$0.06	$0.05 ($0.029)²	New Baseline Established¹

Source: Ministry of Small Business and Revenue business information systems.
¹	The ministry has transitioned payment/transaction processing and non-tax collections functions to a private sector service provider where the terms of the contract provide for payment on a consolidated, transformed suite of services, not on a service by service basis. Therefore, the ministry will not be reporting on cost per transaction, and has revised the cost to collect $1 of debt measure to include only the tax-collection portfolios managed by ministry staff.
²	The ministry revised this measure in 2005/06. The measure now reports on cost to collect $1 of debt for tax portfolios. Performance for 2004/05 has been provided for comparison.

Importance

The ministry is committed to maintaining efficient processes and procedures to collect debt owed to government. The ministry calculates and reports on the cost to collect $1 of tax debt. Decreasing costs indicate the ministry's collection processes and procedures are becoming more efficient and effective.

Explanation

In 2005/06, it costs the ministry an average of $0.029 to collect $1 of tax debt. This was marginally higher than the cost recorded in 2004/05. This minor increase is primarily due to lower debt collections for tax portfolios compared to 2004/05 with no significant change in resources dedicated to collection activities, leading to a higher cost per dollar collected.

In future years, ministry efforts will focus on more difficult to collect debt, which will likely increase the cost to collect $1 of debt. Beginning in 2006/07, this measure will be monitored internally.

Regulatory Reform

The ministry remains committed to easing the administrative burden on taxpayers by streamlining and reviewing current business processes in support of the government's Regulatory Reform initiative. Since the start of the initiative in June 2001, the ministry has eliminated over 2,700 regulatory requirements. In 2005/06, the ministry met the target of a zero per cent net increase over its June 2004 regulatory count.

In 2005/06, the ministry focused efforts on several citizen-centred regulatory reform initiatives:

The ministry launched the British Columbia Provincial Sales Tax Review, a comprehensive review of the province's Social Service Tax Act to identify potential reforms to maintain or enhance British Columbia's tax competitiveness. This review focuses on the development of revenue neutral options for changes to provincial sales tax policies, legislation and related administrative processes to streamline, simplify, and enhance fairness for taxpayers.
The ministry initiated work to consolidate the number of interest rate schedules used for the calculation of interest on the late payment of financial obligations and eliminate the variance in grace periods. When completed, all tax acts will have the same grace period and only one interest rate will be used to calculate penalties. The application of consistent policies and procedures reduces confusion, and increases fairness and equity for taxpayers.
The ministry implemented legislative changes to reduce the regulatory and reporting burden on oil producers, increase the accuracy of returns, and facilitate electronic delivery of oil royalty information. Instead of filing a report with the ministry for each oil well in production, oil producers are now able to file one report for their entire operation. As a result, the number of reports the industry is required to file monthly with the ministry has been reduced from 380 individual reports to 75. In addition, the introduction of electronic filing has reduced administrative burden on both the producers and ministry, and increased the accuracy of the information provided with the elimination of multiple manual steps from the process.
Regulatory burden has also been reduced for the gas industry by simplifying royalty estimate procedures. Simplified reporting requirements have been put in place to bring British Columbia in line with Alberta and maintain a competitive regulatory climate.

ANNUAL SERVICE PLAN REPORTS 2005/06Ministry of Small Business and Revenue

Report on Performance

Performance Plan Summary Table

Performance Trends and 2005/06 Results

Goals, Objectives, Strategies and Performance Measures

Goal 1: Support small business development.

Small Business Profile

Core Business Areas: Small Business and Regulatory Reform.

Objective 1: Enhance and encourage economic opportunities for small business.

Strategies and Results

Performance Measures and Results

Importance

Explanation of performance

Goal 2: A regulatory climate that supports economic and business competitiveness.

Core Business Areas: Small Business and Regulatory Reform.

Objective 1: Improve regulatory quality.

Objective 2: Minimize the regulatory burden on British Columbians.

Strategies and Results

Performance Measures and Results

Importance

Explanation of performance

Regulatory Criteria Checklist

Regulatory burden — government-wide regulatory requirements.

Importance

Explanation of Performance

Goal 3: Maximize voluntary compliance.

Core Business Areas: Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Maximize the use of new electronic technologies to facilitate ease of transactions.

Objective 2: Customers understand their obligations and entitlements, and pay the correct amount on time.

Strategies and Results

Performance Measures and Results

Importance

Explanation of performance

Importance

Explanation of Performance

Importance

Explanation of Performance

Goal 4: Collection of all outstanding amounts owed to British Columbians.

Core Business Areas: Revenue Programs, Revenue Services.

Objective 1: British Columbians receive the revenue they are due.

Objective 2: British Columbians receive the debt recoveries they are due.

Strategies and Results

Importance

Explanation of performance

Importance

Explanation of performance

Importance

Explanation of performance

Importance

Explanation of performance

Importance

Explanation of performance

Percentage of total government accounts receivable more than 90 days overdue.

Importance

Explanation of Performance

Goal 5: Fair, efficient and equitable administration that meets customers' needs.

Core Business Areas: Small Business and Regulatory Reform, Revenue Programs, Revenue Services, Property Assessment Services, Executive and Support Services.

Objective 1: Improve the tax and property assessment appeals processes for administrative fairness and due process.

Strategies and Results

Performance Measures and Results

Importance

Explanation of Performance

Goal 6: Continuous performance improvement and accountability.

Core Business Areas: Small Business and Regulatory Reform, Revenue Programs, Revenue Services, Property Assessment Services, Executive and Support Services.

Objective 1: Continuously improve, streamline and simplify work processes.

Strategies and Results

Performance Measures and Results

Importance

Explanation of Performance

Importance

Explanation

Regulatory Reform

ANNUAL SERVICE PLAN REPORTS 2005/06
Ministry of Small Business and Revenue