The process of estimating revenue is highly complex and difficult. Canada is one of the rare countries that estimates accounts receivable and revenues linked to the fiscal year, and revenues are not accounted for on a cash basis.
The government takes into account the results of income tax assessments, for example for individuals, up until the start of May and estimates revenues based on those results. It does the same for businesses. It uses the amounts businesses have contributed over the year to estimate revenues for a given year.
When we review the actual results, we identify estimation errors. We have told the government that with more than four years' experience in using these methods, it is time to refine them and to identify the causes of the variances.
The most significant variances are for businesses, as they produce their income tax returns every month, whereas individuals produce them at a given point in time. The estimating method employed must be refined. To obtain a better estimate, the factors that need to be adjusted must be determined. Basically, the amounts are the same from year to year, so revenues for a given year reflect reality fairly closely. At the end of the year, there may be a receivable that has not been accounted for, and that situation is repeated year after year.