Strategic Context

The following section provides an overview of the ministry's operating context, including government direction, and the external and internal opportunities and risks that impact the ministry's operations, their expected effect on achieving the ministry's intended results and how they are being managed or mitigated.

Government Direction: Ministry contributions to the Government's Five Great Goals

The Government Strategic Plan⁸ has identified five key strategic goals for British Columbia. These goals guide activities and focus efforts across all ministries and government organizations. The Five Great Goals address literacy, healthy living, caring for those in need, a sustainable environment, and job creation for the decade ahead.

The ministry manages revenues that fund the delivery of important programs and services, such as hospitals and schools, and administers a wide variety of tax credits and exemptions, and benefit programs that contribute to the achievement of all of the government's Five Great Goals. Most directly, the ministry makes a significant contribution to the success of Goal 5 — to create more jobs per capita than anywhere else in Canada. For more detailed information on the ministry's contributions to the achievement of the government's Five Great Goals, refer to Appendix B.

Government has identified a number of cross ministry initiatives to support the accomplishment of the Five Great Goals. The Ministry of Small Business and Revenue works with other ministries and government organizations to achieve outcomes and meet government priorities in areas of shared responsibility. Specifically, the ministry leads regulatory reform across government (refer to pages 15 and 31) and contributes to the success of the ActNow initiative and the 2010 Olympic and Paralympic Winter Games (refer to Strategies and Results: Page 43).

8	View the Government Strategic Plan online at http://www.bcbudget.gov.bc.ca/.

External Opportunities and Risks

Provincial economy — The impact of the national and global economy on the provincial economic environment directly affects the ministry's success in revenue and debt collection. Strong economic growth presents opportunities for increased revenue generation, both through new revenues and increased voluntary compliance with existing financial obligations to government. Slower economic growth could have a negative impact on revenue generation. In response, the ministry maintains comprehensive regularized systems for revenue monitoring and reporting by revenue source, participates in taxation policy reviews and revenue budgeting with the Ministry of Finance, and advises government and clients about changes in revenue expectations in a timely manner.

In 2005, British Columbia's real GDP grew by a solid 3.5 per cent, slightly faster than the 3.4 per cent growth rate forecast in the September Budget Update. Strong consumer spending and investment helped make British Columbia's growth the second fastest in the country, second only to Alberta. The province's economic growth was accompanied by a marked drop in the unemployment rate and strong labour income growth, supporting consumer spending and residential construction.

This strong growth combined with the ministry efforts resulted in increased total revenues, and success in meeting incremental revenue and debt collection targets for 2005/06. A positive economic environment also supports ministry initiatives to promote a vibrant small business sector in all areas of the province. In 2005, British Columbia was ranked first in Canada in per capita job creation. The number of small businesses in British Columbia grew by 1.7 per cent, well above the national average of 1.2 per cent.

Business environment — Provincial tax legislation and policy, and the regulatory environment contribute to the competitiveness of the province's investment climate compared to other jurisdictions. Recent research indicates the ability to easily identify, understand and comply with necessary regulations can be a determining factor in where a business decides to locate.⁹

Recognizing tax and regulatory reform will become increasingly important factors in encouraging investment in the province, the ministry implements initiatives to ensure the tax regime remains current and customer-centred. It also continues to streamline and simplify the regulatory environment to assist in maintaining the competitiveness of the province as a place to live, do business and create jobs. Specifically, in 2005/06, the ministry implemented the British Columbia Provincial Sales Tax (PST) Review as part of the government's commitment to review tax policies, and established a permanent Small Business Roundtable to hear directly from the small business sector on how to support small business success.

9	Enhancing Economic Competitiveness Through e-Government. Deloitte Touche Tohmatsu. 2003.

Voluntary compliance with financial obligations — The willingness of taxpayers to voluntarily meet their financial obligations is the foundation of the tax system in British Columbia. Their willingness is impacted by a wide variety of factors, both within and outside the ministry's control. A key factor within the ministry's control is the quality and accessibility of information to help British Columbians' better understand their financial entitlements and obligations.

The ministry delivers information, education and outreach programs to promote voluntary compliance, undertaking initiatives focused on improving the quality and clarity of information, and expanding payment options to make it as easy as possible for individuals and businesses to comply with financial obligations. The ministry's audit and compliance program promotes fairness and equity by leveling the playing field for the majority of taxpayers who are meeting their financial obligations voluntarily. A key focus of the audit and compliance program is to educate taxpayers on their obligations to support future voluntary compliance.

Customer expectations — British Columbians expect their government to provide timely, high quality, responsive, professional customer service, easy access to information, and to engage in mutually beneficial, collaborative relationships. Recognizing this, the ministry has worked to build a relationship with British Columbians based on the fairness and customer service principles formalized in the Taxpayer Fairness and Service Code. Phase 2 of the code included the establishment of 12 service excellence standards by which the ministry will monitor and publicly report on its customer service performance.¹⁰ The ministry has also established consultative processes to provide effective forums to hear directly from customers and stakeholders (for example, the Small Business Roundtable, the Revenue Programs Advisory Committee¹¹ and the British Columbia Provincial Sales Tax Review consultations).

Citizens also have the right to know the government is ensuring the confidentiality and security of their personal and tax information. The protection of British Columbians personal information continues to be of paramount importance to the ministry and is critical to preserving public trust. The ministry has expanded its capacity to react to information and privacy issues, and has introduced industry leading practices to maintain privacy and security of personal information with its private sector service provider. Additionally, each tax act contains confidentiality provisions that protect the tax information and records that are collected in the administration of the tax legislation. These are in addition to the privacy provisions that apply to all of government. In general, all taxpayer information is confidential and may only be disclosed in the very limited circumstances provided for in the tax statute. There are also controls to sharing tax information with different jurisdictions.

10	For more information on the Taxpayer Fairness and Service Code, refer to Appendix H.
11	The Revenue Programs Advisory Committee is a forum for stakeholders' and taxpayers' input regarding taxation issues. It was established in 1999 and meets semi-annually.

Client requirements — The ministry collects revenues on behalf of a wide variety of client ministries, agencies, local governments and local service areas. The policy decisions made by these organizations may impact on ministry activities and the revenue the ministry administers. For example, when tax rates or exemptions are changed the ministry must update its public information, change administrative procedures and inform taxpayers, and adjust revenue expectations. Policy changes may also impact on taxpayer compliance with financial obligations.

In these circumstances, the ministry must remain adaptable to consequent changes to the collectability of accounts receivable, and collaborate with its customers and client ministries to be positioned to provide informed feedback to ministries contemplating legislative or policy changes that could impact revenues. Additionally, the ministry works closely with the Ministry of Attorney General and Ministry of Finance to clarify the government's position in appeal situations, and develop legislative amendments where needed.

Quality of information — The ministry provides revenue administration and debt collection services to client ministries. In order to provide these services in an effective and efficient manner, the ministry relies on the accuracy and integrity of customer identifying information maintained by these client ministries. The ministry works cooperatively with client ministries to improve the quality of client identifying information.

Internal Opportunities and Risks

Demographics and skilled workforce — The ministry's success is dependent on its highly motivated and skilled employees. Recruitment and retention remains a challenge in a highly competitive market for certain professional skill sets. The ministry continues to strive to be an employer of choice within the public sector, and is committed to establishing a culture of excellence and learning, encouraging staff development and retention. The ministry supports job assignments to further professional and career development of interested employees.

The current demographics of the workforce show many ministry employees will soon be approaching retirement age. This may result in increased retirement rates, knowledge retention issues and the challenge of recruiting for key organizational positions. The ministry, within the context of government initiatives addressing workforce and succession challenges, is developing new strategies for attracting, training and retaining employees.

Citizen-centred service delivery — The ministry continues to focus on initiatives supporting citizen-centred service delivery, reviewing existing and new programs to identify service enhancements. The ministry is working to ensure public information is provided in plain language and is responsive to the diverse information needs of its customers. The implementation of a new citizen-centred regulatory reform process across government will reduce the steps taken by individuals to access services, and reduce the time spent by small business and industry to comply with regulations.

Ministry capacity — To enhance business and service capacity, the ministry has entered into an agreement with a private sector service provider to improve, consolidate and streamline revenue management processes across government. This allows the ministry to leverage private sector investment, expertise and technology, while transferring risk. The ministry also works with a range of partners to ensure the successful delivery of ministry programs and services, and to realize ministry goals. Refer to Service Delivery and Core Business Areas on page 19 and Appendix C.

Internal operations — The ministry continually reviews its internal operations and adopts best practices in its business administration. Enterprise risk management, strategic planning, project and performance management, and continuous improvement initiatives are key areas of focus for the ministry.

Risk management is a key factor in the ministry's continued success. The ministry proactively identifies the threats and opportunities that potentially could impact its success, and addresses areas of high risk. The ministry employs a risk management approach to identify and evaluate risks associated with strategic ministry projects that support the achievement of service plan goals and objectives, and information management or technology projects with a budget or duration that exceed certain thresholds. The ministry has an internal audit committee and regularly conducts audits to identify areas of management or operational risk and develop mitigation strategies. Risk management techniques are also applied to specialized areas including financial risk, occupational health and safety, and business continuity.