Good morning. A new Auditor-General report finds the Canada Revenue Agency’s call centres have become slower, smaller and less accurate — more on that below, along with Japan’s first female prime minister and the red-hot market for World Series tickets. But first:

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If you’ve worked with a contractor, a mechanic, a tailor or – apparently – Tom Waits, you’ve doubtless bumped up against the concept of the Iron Triangle. A job, it posits, can never be done quickly, cheaply and well. You have to pick two of the three.

But according to yesterday’s report from federal Auditor-General Karen Hogan, the Canada Revenue Agency has gone for a different approach: doing absolutely none of those things. In the last fiscal year, just 18 per cent of taxpayer calls to the CRA received a prompt answer, defined as 15 minutes or less of waiting around on hold. The average caller instead listened to tinkly music for half an hour – or lost patience and hung up, since the agency’s phone system doesn’t provide real-time updates on the wait. Incidentally, the contract for that phone system has quadrupled in cost over the past decade; the CRA will now pay IBM $214-million through 2027.

Worse still, when people do manage to get through to an actual agent, the information passed along is … not great. Between February and May, staff from the A-G’s office placed 167 calls to the CRA with general tax questions. When they asked about government benefits and business taxes, the answers were correct about half of the time. When they asked about individual tax matters, the accuracy rate plunged to 17 per cent.

The deflect effect

Bad advice, unanswered calls, a scathing AG report – this isn’t new terrain for the CRA. Back in 2017, then-auditor-general Michael Ferguson found the agency doled out incorrect responses nearly 30 per cent of the time. It also actively blocked more than half the calls it received from taxpayers, meaning people, on average, had to phone four times in a week to get someone on the line. That practice – sending callers to automated services, instead of to agents – is known as “deflecting.” This year, the CRA deflected more than four million calls in April alone, as Canadians hustled to meet the tax-filing deadline in a season filled with last-minute rule changes and tech woes.

The CRA, its union and the Taxpayers’ Ombudsperson, François Boileau, all agree on the culprit here: budgetary constraints that have slashed the agency’s call-centre work force. The CRA went on a hiring spree after the A-G’s unflattering 2017 report, then another one when the pandemic hit, employing more than 7,000 call-centre workers in 2022-2023. That same fiscal year, agents picked up the phone within 15 minutes at least 65 per cent of the time. But by May of 2025, call-centre staff had fallen to roughly 3,500 people. The Auditor-General reported they each received fewer than 30 minutes a year in training or feedback.

Progress under pressure

Maybe Finance Minister François-Philippe Champagne got tired of the tinkly hold music. Early last month, he gave the CRA 100 days to fix what he called “unacceptable difficulties” at its call centres, and the agency – no great surprise – moved quickly to staff up. More than 400 new service representatives were brought on, while roughly 850 employees saw their contracts extended. And it worked! Or, at least, it meant fewer deflections: On Monday, the CRA announced that agents now answer 77 per cent of their incoming calls, compared to 35 per cent in July.

The hiccup is that Champagne is also on a cost-cutting mission, issuing a summertime plea for federal cabinet ministers to find “ambitious” internal savings ahead of the 2025 budget. More specifically, they must reduce program spending by 15 per cent in the next three years. It’s unclear how the Finance Minister plans to square that mandate with the CRA’s need to boost head count – he skirted the issue when asked about it by The Globe’s Erica Alini. The federal budget, set to be released on Nov. 4, might offer some clues.

But it probably won’t offer an AI solution, because the CRA’s chatbot is proving a bit of a bust. Yesterday’s A-G report included a look at how Charlie, the AI bot launched in March, handled six basic tax questions, and Hogan wasn’t impressed. “Charlie’s responses tended to be brief, offering limited context and minimal additional information,” she wrote. Not just that: Charlie got four of those six answers flat-out wrong. You’d be better off flipping a coin.

Sanae Takaichi is a hard-line conservative who loves Margaret Thatcher and also Iron Maiden – and yesterday, after weeks of political chaos, she secured enough parliamentary support to become Japan’s first female prime minister. Read more about the historic vote here.