Article content
Ottawa is ready to speed up on its automatic tax filing initiative it says has already delivered $3 billion in benefits and credits to over a million vulnerable Canadians who needed them most.
Article content
Part of that plan, announced in Monday’s Fall Economic Statement (FES), is drafting legislation giving CRA the power to automatically file a return for select lower-income Canadians to ensure they’re receiving everything to which they’re entitled.
Article content
By the government’s accounting, close to 20 per cent with an income under $20,000 don’t file a return and are missing out.
“While these programs have seen initial success, it is time for Canada to accelerate modernization of how Canadians file their taxes and make needlessly complicated and costly tax filing services a thing of the past,” the fiscal document reads.
Recommended from Editorial
Here’s what you need to know about Ottawa’s tax filing simplification plans:
What is SimpleFile?
First introduced in 2018 as File My Return, the Liberals rebranded and adjusted the program, acting on a Budget 2023 promise to create an automated system.
SimpleFile by Phone allows an invited user to answer a few brief questions using the keypad of their phone and consent to CRA filing on their behalf.
“There are no forms to fill out or calculations to do. You do not need to speak to an agent to use this service,” CRA explains on its website, noting it should take a maximum of 10 minutes.
Article content
A pilot program in July expanded the service to digital software, whether by the user or an authorized representative, and the old-fashioned paper method, with assistance offered at free tax clinics.
Who can use SimpleFile?
The pilot program was geared towards vulnerable Canadians with straightforward tax situations who have gaps in their filing history or have never filed.
Eligibility is chiefly based on source of income and coming in under a certain threshold — as determined by age, province and disability status.
Making good on its budget commitment to get two million people using it by 2025, a first invitation cohort of 700,000 was expanded to 1.5 million in February.
Another 500,000 were added when the digital and paper options were introduced in the summer.
How much did SimpleFile invitees get back?
CRA reported a 93 per cent return rate on the invite, resulting in the $3 billion returned to low-income taxpayers, almost half of which ($1.4B) was Canada Child Benefit payments.
Approximately another $500 million was repaid in GST credits, provincial benefits administered by CRA and carbon rebates respectively.
Article content
How is Ottawa speeding up automated tax filing?
To make it even easier for those lower-income individuals to see those returns, government is working on a law to let CRA use the information it has available to automatically file on the person’s behalf.
The agency would be required to notify them first, providing them with a pre-filled tax form and giving them the chance to opt-out, but it will proceed whether it hears from the person or not.
As an example of potential return, the FES said a single dad with two young kids living in Sault Ste. Marie, Ont., earning $15,000 a year, but who has never filed his taxes, could see as much as $27,000 in benefit payments if he responds to the notification.
“Throughout the development of automatic tax filing, ensuring Canadians’ ability to opt-out of the CRA filing on their behalf will remain a central focus,” the FES said.
What about middle-class Canadians?
Further down the road, Ottawa wants to bring middle-class Canadians into the automated fold.
“This could include, for example, non-filers or those with a gap in their filing history and who do not claim most deductions and credits,” the FES said. “It could also include a modest-income family who does not have the funds for a paid tax filing service.”
Government will also look at making more free tax software available online and propose amendments to the CRA Act to empower the minister to further efforts in tax “simplification and automation.”
Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our newsletters here.
Share this article in your social network
