Canada's budget watchdog reports that an automatic tax filing system could deliver more than $2,000 per year in benefits to Canadians who typically do not file their taxes. The Parliamentary Budget Officer (PBO) released a new analysis on Thursday estimating that the average non-filer could receive up to $2,000 annually in unclaimed benefits through a streamlined, automated process.
Potential Benefits for Low-Income Canadians
The PBO's report highlights that many low-income Canadians miss out on benefits like the Canada Child Benefit, GST/HST credit, and the Canada Workers Benefit simply because they do not file taxes. An automatic system would ensure eligible individuals receive these payments without the burden of manual filing.
How Automatic Filing Would Work
The proposed system would use information already available to the Canada Revenue Agency (CRA), such as T4 slips and other income reports, to pre-populate tax returns. Taxpayers would then have the option to confirm or amend the return, simplifying the process and reducing errors.
According to the PBO, the average non-filer could gain over $2,000 annually, with total unclaimed benefits across the country reaching billions of dollars. The report estimates that about 10-12% of Canadians do not file taxes each year, many of whom are low-income or vulnerable.
Advocacy groups have long called for automatic filing to reduce poverty and improve access to social programs. The PBO's findings add weight to those calls, suggesting that the system could be both cost-effective and impactful.
