The Canada Revenue Agency is piloting an automatic tax filing system and the latest results are promising.
In 2023, the federal government announced that it would increase the number of invitations sent for SimpleFile in its budget. The automatic tax filing system aims to help lower-income Canadians who do not file taxes or have filing history gaps.
According to a 2020 study, between 10 and 12% of Canadians don’t file a tax return annually and, therefore, may not receive the benefits for which they’re eligible.
In July this year, the CRA invited more than 500,000 lower-income and non-taxable individuals to try SimpleFile.
Since the pilot is ongoing, the 2024 results aren’t available. However, the agency provided Daily Hive with the results of its small-scale pilot that took place in the summer of 2023.
It invited over 118,000 lower-income and non-taxable individuals to use the automatic tax filing system, which is available over the phone, digitally, or on paper.
“For this small pilot, over 35,000 individuals filed a tax return using a variety of filing methods and were entitled to $92 million in benefit and credit payments,” CRA spokesperson Benoit Sabourin stated over email.
According to the agency, those Canadians received the following in unclaimed benefits and credits:
- More than $32 million in Canada Child Benefits
- Over $400,000 in Advanced Canada Workers Benefit
- Approximately $217,000 in Dental Benefits
- Over $58 million in the Goods and Services Tax Credit, Canada Carbon Rebate and other provincial and territorial benefits issued by the CRA
Budget 2023 also announced plans to implement a new automatic tax filing system that will “help lower-income and vulnerable Canadians who currently do not file their taxes receive the benefit and credit payments to which they are entitled.”
A report from the Parliamentary Budget Officer (PBO) in June estimated even bigger overall gains for Canadians.
REPORT: “Expansion of SimpleFile by Phone and the implementation of an automatic tax filing system” https://t.co/BnVIsAVPno #cdnecon #cdnpoli pic.twitter.com/lfnlWdqdeq
— PBO-DPB (@PBO_DPB) June 13, 2024
The country’s fiscal watchdog said that if implemented, the system could give those who don’t file their taxes $1.7 billion in unclaimed benefits from 2024 to 2025 to $1.9 billion from 2028 to 2029, totalling about $9 billion over five years.
That estimation includes money from government benefits like the Canada Child Benefit (CCB), the Canada Workers Benefit (CWB), the GST credit, and Canada Carbon Rebate (CCR), and others that are only distributed to individuals who file their taxes.
So far, there is no update on this automatic filing system as the CRA waits on the results of the summer 2024 pilot. Consultations with stakeholders, community organizations and tax professionals are planned for mid-January 2025.
“The CRA will chart a path forward that respects the needs of non-filing, lower-income Canadians to ensure more individuals have access to the benefit and credit payments designed to support them,” said Sabourin.
How does the SimpleFile tax filing service work?
The invitation-only service — which is available by phone, online and on paper — lets Canadians complete their tax return in as little as 10 minutes from the comfort of their own home any time it works for them.
According to the CRA, when using the phone or digital service, individuals will need to confirm some personal information and answer a series of short questions.
For those using the phone service who have already created a personal identification number (PIN) in My Account, an estimate of their net income, taxable income, and any refund that they may be eligible for will be available at the end of the call.
If you don’t have a PIN, don’t worry — the CRA says a tax return can still be filed without it.
“Individuals will receive a notice of assessment either in the mail or in My Account after their return has been processed,” reads an announcement from July.
The phone and digital services are available 21 hours a day, from 6 am to 3 am, Eastern time, seven days a week.
The CRA is expected to expand eligibility for SimpleFile to two million Canadians by 2025.
In addition to SimpleFile, the CRA has a number of programs and services to help Canadians file their taxes including Auto-fill my return in certified tax software, and the Community Volunteer Income Tax Program (the Income Tax Assistance – Volunteer Program in Quebec).