CRA Plans to Roll Out New Auto Tax Filing System
In 2024, the Canada Revenue Agency is set to test a new automated system aimed at assisting vulnerable Canadians who fail to file their taxes, ensuring they are getting their benefits.
The announcement was made in this week’s federal budget, which also stated that the agency would present a plan in 2024 to expand the service. The Liberal government has stated that the budget measures are designed to alleviate the financial burden on Canadians. Experts and advocates have long pushed for automated tax filing, citing the number of vulnerable Canadians who miss out on benefits they are entitled to.
Canadian citizens are generally not required to file tax returns every year unless they owe money. However, the federal government increasingly relies on the Canada Revenue Agency to provide income-tested benefits to individuals, including the Canada Child Benefit, the recent top-up to the Canada Housing Benefit, and the temporary doubling of the GST tax credit. According to a report co-authored by Jennifer Robson, an associate professor in political management at Carleton University in 2020, between 10 and 12 per cent of Canadians fail to file their taxes. Although non-filers are present across all income brackets, they are concentrated in lower-income brackets.
The report estimated that the value of benefits lost to working-age non-filers was $1.7 billion in 2015. The Canadian government has heeded calls to implement automated tax filing to help vulnerable Canadians gain access to benefits they may not have received otherwise. The federal budget also stated that the Canada Revenue Agency would broaden access to a service created in 2018 that allows some Canadians with lower or fixed incomes to file simple returns over the telephone.
The budget forecasts that two million Canadians will be eligible for this service, known as “File My Return,” by 2025, nearly three times the number of people who can use it now. The move toward automated tax filing, which was first promised in the 2020 speech from the throne, is one of several budget measures designed to assist Canadians with the cost of living.
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