The Public Service Alliance of Canada is on strike: Will it impact SR&ED?
Update May 4, 2023:
On May 4, 2023, the PSAC published an article, “Tentative agreement reached with Canada Revenue Agency for 35,000 PSAC-UTE members“, which states that the national strike is over for the 35,000 PSAC members employed by the CRA:
After more than a year and a half of bargaining leading to one of the largest strikes in Canadian history, the PSAC-UTE bargaining team has reached a tentative agreement for the more than 35,000 Canada Revenue Agency workers who deliver critical services to Canadians.1
The PSAC bargaining team negotiated wage increases totalling a wage increase of 12.6% over 3 years as well as a pensionable $2,500 one-time lump sum payment that represents an additional 3.6% of the salary for the average PSAC member. This offer exceeds the previous offer from the CRA of a 9% wage increase over 3 years and in the PSAC’s statement the bargaining team unanimously endorses this agreement.2
The collective agreement between the PSAC and the CRA expired on October 31, 2021, and the collective bargaining process began in January 2022 when the first sessions were held. Throughout the process, the CRAÂ published an astonishing 20 collective bargaining updates.3
The full agreement is discussed in detail in the PSAC’s post “Tentative agreement reached with Canada Revenue Agency for 35,000 PSAC-UTE members” and in the CRA’s “PSAC-UTE collective bargaining update (No. 20)“. Hopefully the CRA operations resume smoothly. We will continue to keep you up to date should there be any further changes.
Update May 3, 2023:
On May 1, 2023, CBC News published an article, “35,000 CRA employees still on strike“, informing Canadians that while the national strike is over for Treasury Board employees, the 35,000 PSAC members employed by the Canada Revenue Agency (CRA) remain on strike. Upon further investigation, we located a statement released on May 1, 2023, by the Canada Revenue Agency informing Canadian taxpayers that negotiations are set to continue “as soon as possible”:
“the Canada Revenue Agency (CRA) and the Public Service Alliance of Canada – Union of Taxation Employees (PSAC-UTE) have resumed in-person negotiations with a view to reach a new collective agreement as soon as possible, that is both fair to employees and reasonable for taxpayers.”4
In the most recent public negotiations on April 19, 2023, the CRA presented the PSAC with an offer of a 9% wage increase over 3 years, and the PSAC countered with a proposal of 22.5% over three years.5
The functionality of the CRA is significantly impacted by the strike:
There are 35,868 members in this bargaining unit, the second largest unit at the PSAC. Our members review and process tax returns, provide tax information services for the public, and intake the billions of dollars of government revenue collected by the CRA. They also run the offices, maintain the equipment and buildings, and carry out the administrative work of the CRA.6
However, the CRA has made it clear that, regardless of the status of negotiations, the tax filing deadline has not changed. Let us hope that the negotiations go smoothly during the ongoing bargaining set to continue on May 2, 2023, as it will be difficult and time-consuming to obtain feedback and contact the CRA for tax inquiries.
The Public Service Alliance of Canada is on strike: Will it impact SR&ED?
On April 17, 2023, the Public Service Alliance of Canada (PSAC) set a deadline for 9:00 pm (EST) on April 18, 2023, to encourage both parties to reach an agreement as the bargaining has been ongoing for almost 2 years. If no agreement was reached by this deadline, the union stated that the 155,000 PSAC members at the Canada Revenue Agency (CRA) and the Treasury Board of Canada Secretariat (TBS) would begin to strike at 12:01 am Wednesday, April 19th, 2023. No agreement was reached, and the PSAC is now officially on strike. Be prepared for delays as the PSAC begins their strike and the picket lines are drawn, this could impact your SR&ED claim.
April 19, 2023 – The PSAC is Officially On Strike
On April 18, 2023, The PSAC published an article, “ PSAC announces nationwide general strike beginning April 19 for 155,000 workers“, announcing the beginning of their strike action. Picket lines will go up across the country in over 250 locations.
Strike action will begin at 12:01 am ET April 19 – setting the stage for one of the largest strikes in Canada’s history.
Picket lines will be set up in more than 250 locations across the country. Members and public supporters can find the nearest picket line using PSAC’s picket line finder tool.
With nearly a third of the entire federal public service workers on strike, Canadians can expect to see slowdowns or a complete shutdown of services nationwide beginning tomorrow, including a complete halt of the tax season; disruptions to employment insurance, immigration, and passport applications; interruptions to supply chains and international trade at ports; and slowdowns at the border with administrative staff on strike.7
The PSAC is one of Canada’s largest unions, and “represents nearly 230,000 workers in every province and territory in Canada and in locations around the world.”8 This includes “more than 120,000 federal public service workers employed by Treasury Board, and more than 35,000 employed by the Canada Revenue Agency.”9
The arrival of this strike will have a very large impact on multiple aspects of Canadians’ day-to-day lives. The strike will impact taxpayers’ 2023 tax returns. The processing will unquestionably be delayed, in fact, the PSAC states there will be “a complete halt of the tax season”.10 This is due to the lack of staff. It is likely those staff not on strike will have to handle some tasks that are normally covered by those who are on strike. Individual and corporate taxpayers’ returns will most likely be delayed.
How the Strike could impact on SR&ED
This may affect companies claiming SR&ED. While the technical and financial reviewers are not members of the PSAC but of the Professional Institute of the Public Service of Canada (PIPSC) – meaning they are not currently in a strike position – they will likely be supported in other roles by PSAC members. In practical terms, what this means is that if you have been selected for an SR&ED review, anything that relies on the technical and financial reviewers will proceed as normal but potentially a bit slower, if they need to divert any time due to the strike impacting their own jobs (ex. payroll, administration, etc). It is important to keep in mind that many other individuals at the CRA are members of the PSAC, including those who finalize the Notice of Assessment (NoA) or Reassessments and those who process refunds (ie, the “complete halt of the tax season” referred to above). So if you are in the middle of a review and it is completed successfully with a refund due, it will be important to plan for delays as the final steps at the Tax Services Office may be delayed or halted.
The collective agreement between the PSAC and the CRA expired on October 31, 2021, and the collective bargaining process began in January 2022 when the first sessions were held. Since this point, the CRA has published an astonishing 15Â collective bargaining updates, and on April 11th, 2023, the PSAC decided to make a bigger impact and voted to strike if the negotiations between April 17-20th were unsuccessful. See our article Public Service Alliance of Canada Strike May Impact Your Tax Claim for previous updates on the PSAC bargaining process. The timing is not ideal, considering the 2023 tax season is ongoing and there has been a recent increase in SR&ED reviews.
Readers should also be aware that the results of this strike will likely impact other groups. The AFS (Audit, Financial and Scientific – CRA) Group collective negotiated by PIPSC expired December 21, 2022 . There have been multiple rounds of negotiations to date, described here: AFS (Audit, Financial and Scientific – CRA) Group | The Professional Institute of the Public Service of Canada (pipsc.ca)
This may be a significant moment in the history of the administration of the SR&ED program. We will keep readers up to date with information as it becomes available.