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The Voice of Canada’s Investment Funds Industry

COVID-19: Investment fund industry updates (June 25, 2020)

CRA Certificate of Residency Processing Update

IFIC asked the CRA a number of questions regarding Certificate of Residency processing during the Covid-19 pandemic.

Below are the questions and the CRA’s responses:

What is the date of the current COR requests that the CRA is processing?

CRA Response: The normal service standard for the processing of Certificate of Residency cases is 60 days.  Depending on the type and/or quantity of certificates requested, clients could experience an average delay of up to 30 days beyond this timeframe, particularly during peak periods. This projection is subject to change very quickly, and although we endeavor to process these files on a first-in/first-out basis, some certificates of residency may be processed much faster than 60 days, and others somewhat slower depending on complexity, quantity, method of receipt, and other variables typically encountered in the processing of this workload.

How large is the backlog?

CRA Response: Unfortunately, at this time it is difficult to estimate the size of the backlog due to paper files in numerous offices not yet inventoried. Effective Monday June 29, we will begin to move towards normal operations and will be opening up all points of intake again, subject to the building re-occupation plans of each of our intake sites. We are hoping this will alleviate some of the delays in mail transit, and will certainly allow our employees to spend more time in handling the paperwork aspect of these cases. We will have a better idea of existing backlogs for all of our workloads in the next month or two as we continue to work through the stockpiled requests.

What percentage of the regular COR processors are currently working on processing requests?

CRA Response: The Certificate of Residency workload formed a moderate percentage of most of our agents’ inventory of cases before COVID19, and upon enactment of our business continuity plan, we now have a centralized and dedicated team processing this workload. In effect, the dedicated effort has maintained our level of attention on this workload. The delays that may still occur are not caused by the level of resources allocated: they are caused by mail transit and processing, both internal and external, and modified procedures that allow our employees to safely re-enter their building to handle paper-based submissions. We are providing our best effort while continuing to respect the advice of all health authorities and ensuring the health and safety of our employees is not compromised.

When does the CRA estimate completing the processing of the backlogged requests?

CRA Response: As we move towards gradual business resumption at the CRA, it is difficult to estimate when backlogs will be fully processed as there are too many variables to consider at this point in time. Should we continue to see an overall improvement with respect to the nation’s COVID situation, and continue to see greater flexibilities provided by provincial health authorities, we would expect the backlog to be resolved in a timely manner. We will continue to dedicate resources to this effect in order to ensure the continuity of service to our clients.

Are you aware of any agreements the Competent Authority has made with foreign tax authorities to extend reclaim deadlines?

CRA Response: The CRA has not entered into any competent authority agreements to extend reclaim periods. Canada’s tax treaties do not empower the competent authority to agree to extend Canada’s statutory deadlines to request a refund of Part XIII tax. However, some tax treaties allow a period to request a refund in connection with the mutual agreement procedure after the domestic time limits of either country have expired. Where this is the case, the treaty generally specifies a 2 or 3-year period. The Canada-US treaty provides for a period of 6 years from the end of the relevant taxable year. Information on requesting assistance under the mutual agreement procedure can be found in IC71-17R5.