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CRA to Simplify Tax Returns for Millions
The Canada Revenue Agency (CRA) is rolling out a new automatic tax filing system aimed at ensuring federal benefits reach Canadians who need them most. Prime Minister Mark Carney announced the program last week, signaling a significant step toward reducing poverty and red tape for low-income residents.
Millions to Benefit by 2028
Initially, one million Canadians will be eligible for the automated system, with plans to expand coverage to 5.5 million recipients by 2028. The system is designed to simplify tax filing for those with straightforward tax situations, such as a single source of income and minimal deductions.
Officials Highlight Economic Impact
Wayne Long, Secretary of State for the CRA and Financial Institutions, emphasized the potential benefits of the initiative. “This program could pay out hundreds of millions of dollars over the next few years,” Long told iPolitics. He added that automatic filing could lift vulnerable Canadians out of poverty by ensuring timely access to child benefits, disability credits, and other federal programs.
Addressing Barriers to Benefits
Many low-income Canadians do not file tax returns because they owe no taxes, yet filing is required to access federal benefits. Jennifer Robson, a tax policy expert at Carleton University, noted, “Canada’s child benefit has been incredibly effective at reducing child poverty. But you don’t get it if parents don’t file a return.”
How the Program Works
Under the new system, tax forms will be pre-filled automatically and at no cost to eligible Canadians. Individuals still must submit the forms, but the responsibility for calculating tax amounts shifts to the CRA. The first phase targets those below the market basket measure, Canada’s official poverty threshold.
Limitations and Challenges
Experts caution that the system may not assist Canadians with complex tax situations, such as self-employment income, medical expense credits, or charitable donations. Nevertheless, increasing filing among low-income earners could prevent hardships, including housing evictions caused by outdated proof of income.
Long’s Vision for a Larger Overhaul
Long has championed automatic tax filing for years, drawing on feedback from constituents. “We used to meet weekly to discuss how to make benefits more accessible,” he said. The initiative draws inspiration from similar systems in European countries.
Implementation and Outreach
Eligible Canadians will be notified when the system is available. Long highlighted the CRA’s efforts to reduce red tape, enhance online services, and explore AI-assisted support for account access.
Balancing Cuts and Services
The launch comes amid staffing reductions at the CRA. In 2024, the agency accounted for 72% of 10,000 federal public service cuts, with further operational savings planned for 2026–2029. Long assured that the agency remains focused on delivering services efficiently despite budget pressures.
