For weeks, Canadians for Tax Fairness has urged the government to revise tax filing requirements for Canadians to continue receiving benefits. Normally, if individuals don’t file their taxes, they don’t receive many important supports such as the Canada Child Benefit, the Climate Action Incentive Benefit, or the Guaranteed Income Supplement for Seniors.
COVID-19 has shut down community tax clinics that usually help struggling Canadians file their taxes in order to receive the government supports they desperately need. For many of these individuals, such as those with disabilities or newcomers with communication barriers, filing taxes is impossible without face-to-face assistance from volunteers in the community.
We wrote to ministers and asked our supporters to sign our letter to government asking it to waive the tax filing requirement or extend the deadline so that vulnerable Canadians would not lose out on their benefits in a time of heightened need. NDP MP Matthew Green also pressed the National Revenue Minister on this issue.
Our pressure has paid off. Canada Revenue Agency recently announced that it will continue to provide benefits to Canadians who are unable to file their taxes until at least September. This will help hundreds of thousands of low-income Canadians by ensuring their benefits continue for at least a few more months, but it is far from a perfect solution.
If the pandemic does not significantly improve over the summer, it will remain unsafe for many of these individuals –especially those most susceptible to the virus such as seniors, Indigenous communities-- to get the in-person support they need to file. While virtual tax clinic volunteers have been working hard to help low-income Canadians file their taxes during this crisis, filing remotely won’t work for everyone, including those without a phone or computer access.
The government will likely need to extend benefits beyond September or waive the tax filing requirement for low-income individuals to keep receiving their benefits. In most cases, these individuals did not earn enough income to owe the government money and it would be relatively easy and inexpensive for the CRA to continue issuing their benefits based on their 2018 tax filings, then reconcile any differences after 2019 taxes can be safely filed.
Considering the significant financial help this government is delivering to Canadians in this crisis, now is the time to look at longer-term improvements to CRA, such as providing community tax clinics and volunteers with additional resources for the important work they do and making the tax system simpler. Canada should move toward an automatic tax filing system, as countries such as Norway, Denmark and others have, beginning with low-income individuals but making the option available to anyone.
From long-term care to childcare, the COVID-19 crisis has highlighted those social safety nets are especially in need of repair. Canada’s complex tax system should be added to the list.