Millions of Low-Income Canadians to Get Automatic Tax Filing

A local social services organization is welcoming the Liberal government’s plan to introduce an automatic tax filing system for low-income Canadians, calling the initiative long overdue.

Prime Minister Mark Carney announced the measure at a news conference in Nepean on Friday. He also pledged to make the national school food program permanent and extend the Canada Strong Pass. The program, starting in the 2026 tax year, aims to file returns for 5.5 million low-income Canadians by 2028.

"I think this is a great idea and one that is long overdue," said Peter Tilley, CEO of the Ottawa Mission.

Advocates See Progress

Advocates have long pushed for an automatic filing system. The former Liberal government under Justin Trudeau first announced a similar program in the 2020 throne speech, with a commitment to implement it in the 2023 budget. However, a subsequent pilot reused an older system that saw little uptake.

People who owe taxes are legally required to file returns each year, but many Canadians miss out on benefits because they don’t expect to owe the government anything. Jennifer Robson, an associate professor at Carleton University and co-author of a 2020 study on tax filing, noted that about 12% of working-age Canadians did not file taxes as of 2015.

Based on more recent research, Robson estimates that the CRA already has enough information to pre-fill about one-third of all tax returns each year.

"This is a good step forward," she said. "There have been a lot of voices calling for change, and it’s nice to see a concrete commitment we can look forward to."

Benefits for Vulnerable Populations

Each spring, the Ottawa Mission partners with H&R Block to run a tax clinic for people experiencing homelessness. Tilley said the automatic filing system could ease the clinic’s workload and benefit clients who face multiple barriers.

"Many of our clients suffer from substance use or mental health issues and are just trying to survive day to day," Tilley said. "Filing taxes isn’t something they would normally think about. Some also lack access to technology or documentation required to submit returns."

Despite the optimism, Tilley is awaiting more details from the government’s first federal budget in November. "The devil’s always in the details, isn’t it?" he said.

Robson also raised questions about the program’s implementation, such as income thresholds for eligibility and how the CRA will obtain the necessary data.

"Will the onus really be on individuals to participate in a simplified process, or will the tax agency take responsibility where it already has good information?" she asked.