“It’s all about having access to the My CRA account, and using it,” says Elizabeth Mulholland, CEO of Prosper Canada, a charity dedicated to financial empowerment that helps low-income people across the country file their taxes.
But those changes are only inching along — even as the list of benefits, supports and financial information attached to proper tax filing is growing longer and longer.
More precious than T-4 forms or access to automatic filing, however, is what comes at the end of the dance with the Canada Revenue Agency: the notice of assessment — the document that summarizes your income and confirms how much you owe or are getting back in taxes.
It’s like a Golden Ticket — the key to unlocking federal and often provincial income support as well as trustworthy financial information about every taxpayer.
Without their notice of assessment, taxpayers rich and poor alike, will find it difficult, if not impossible, to access GST credits, caregiver credits, seniors’ benefits, help for groceries, space in your RRSP, your TFSA and your FHSA.
Acronyms aside, you’ll need your notice of assessment to get child benefits, dental benefits, workers benefits and disability benefits. In Ontario, you’ll need it to access social assistance.
There’s more, but you get the idea.
More and more, the notice of assessment is a linchpin to social service delivery at all levels, making it a crucial link in Canada’s social safety net.
But for those who need it most, it’s sometimes hard to get and easy to lose.
“It’s all about having access to the My CRA account, and using it,” says Elizabeth Mulholland, CEO of Prosper Canada, a charity dedicated to financial empowerment that helps low-income people across the country file their taxes.
No one should assume that such access is at everyone’s fingertips, especially if they are living in precarious circumstances. First, you need computer access, with Wi-Fi, and preferably with a secure connection. If you’re setting up an account, you also need identification, previous tax returns, and a steady address.
And let’s hope you don’t get locked out of your account. Getting back in can take several documents, and a password that may need to be sent by mail.
CRA and experts figure about 400,000 people are missing out on their benefits year after year because they’re not filing taxes.
That was the reason why last November, in Prime Minister Mark Carney’s first budget, the government announced a new initiative for automatic filing for low-income people with simple tax situations.
It has potential, but it’s rolling out gradually, and with some hiccups.
There are three different ways the CRA wants to make tax filing more automatic, but only one is ramping up right now, opening up on March 9 for this tax season: SimpleFile, an interactive digital or phone questionnaire which will be available to about 3 million people.
The system has been around for a while, but by invitation-only in the past, and uptake has been low. It’s more accessible this year.
This coming fall, CRA will launch a small pilot project to do “deemed filing” for low-income Canadians who haven’t filed their taxes at all, but should have.
And next March, CRA will start pre-filling tax returns for 1 million people, giving them a chance to approve the information before sending it in. The goal is to reach 5.5 million people by 2029.
The government is purposely moving cautiously so that it can understand the needs of vulnerable populations and consult along the way, says John Fragos, press secretary for the Office of the Minister of Finance and National Revenue.
In the meantime, low-income filers will lean heavily on community tax clinics staffed by trained volunteers, including about 700 chartered accountants in Ontario, and organized by charities like Prosper Canada. Same as it ever was.
“The word ‘automatic’ seems very misused,” says Lisa Rae, Prosper’s director of systems change.
Her frustration is that the federal government has been tossing around the automatic filing concept for years. But she’s hopeful that this time will be different.
Prosper Canada, along with the Maytree and Momentum organizations, are taking CRA’s offer to consult seriously and have designed ways to make the government plan more workable.
They argue that with more efficient use of the financial information the government already has, more formal exchanges of data with provincial governments, and a deeper understanding of the needs and financial flows of low-income people, CRA could catch up to other countries and develop a truly automatic system that would ensure almost $2 billion in unclaimed supports and benefits get into the hands of those who qualify.
Let’s hope the government is listening, and is on the way to making it truly easier for taxpayers of all kinds to find and keep that most-precious of all documents, the notice of assessment.
Related reading
Rethinking Canada’s Tax System: What Works, What Doesn’t, What’s Next
The Canadian Club of Toronto hosted a panel on rethinking Canada’s tax system (what works, what doesn’t, what’s next), featuring the Canadian Tax Observatory’s Heather Scoffield, Deloitte’s Fatima Laher and the University of Calgary’s Jack Mintz. Moderated by Patrick Brethour of the Globe and Mail. Here’s a recording.
Heather Scoffield talks the U.S. Federal Reserve on TVO’s The Rundown
What happens to Canada’s approach to monetary policy when the world’s most powerful central bank, the U.S. Federal Reserve, is in turbulent times? Heather Scoffield breaks it down here for The Rundown on TVO.
Three things Canadians should know about Carney’s new GST credit
The House of Commons has agreed to fast-track legislation to boost the GST credit for 12 million taxpayers with low and modest incomes. Here’s Heather Scoffield’s initial analysis of the measure.
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