Good Practices and Innovations in Public Governance 2003-2011

Good Practices and InnovATIONS in Public Governance
and uses complex economic models to estimate household expenditures. The goal is to
determine whether a taxpayer’s lifestyle matches the taxpayer’s reported income. Cases
involving a significant discrepancy suggest a greater risk of tax evasion.
Implementing a project of this magnitude required the agreement and support of the
Québec government. To be successful, Revenu Québec overcame a number of formidable
challenges. For example, an act regarding the Minister of Revenue was amended,
and consent for the project was obtained from the Commission d’accès à
l’information. The Commission is an independent body that strictly monitors the use
of all information obtained from government departments and public bodies. The
Commission has followed the development of the project since its inception, and by
performing the role of watchdog, it has helped this new audit method gain the acceptance
of the authorities, the general public, various social groups and the media.
Revenu Québec also signed memoranda of understanding with many partners to use
data that they collect. Information from 32 Québec government departments and
agencies, 263 municipalities and a number of private firms is coupled with the tax
information from both Québec and Canada income tax returns.
The analysis of more than 200 billion pieces of information required the creation of
a data warehouse and an expert computer system equipped with specialized coupling
and selection algorithms. The system’s integrated security technologies ensure, beyond
any doubt, the confidentiality of information and the privacy of citizens.
The project has revolutionized audit methods. Because of the specialized, highly
automated functions of the expert system, auditors now have access to cutting-edge
technologies and a wide range of cross-tabulated data, which greatly accelerates their
work. The time required to complete an audit has dropped from 200 to 21 hours. The
innovative audit method has thus produced important gains in efficiency and effectiveness
and increased the number of audits by approximately 4,000 a year. The rigorous,
greatly simplified process that auditors now use has also facilitated communication
between Revenu Québec and its clients, particularly by producing files that are
more comprehensive and more easily understood by taxpayers.
Through the use of the Ensuring Fiscal Equity initiative, the state collected $220 million
in additional revenue from 2003 to 2009. Taking into account the cost of carrying
out the project and the operating costs, the net benefit over the same period was
$183 million.
Replicability and Sustainability
The success of the project is due to a clear vision and a structured approach that is
capable of evolving. Since the outset, the project administrators have constantly refined
the wealth indicators by incorporating new sources of information, updated
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