Automatic tax filing could see Canadians who usually skip their file getting $2K a year in benefits: watchdog

Canada Revenue Agency (CRA) national headquarters in Ottawa on Friday, June 28, 2024. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA — The federal fiscal watchdog says Ottawa’s plan to roll out automatic tax filing could see Canadians who normally don’t file their tax returns get thousands of dollars in owed benefits annually.

The federal government announced a plan in the 2025 budget for the Canada Revenue Agency to file taxes for certain low-income individuals and offer pre-filled returns for others with simple tax situations.

The government relies on the CRA to distribute certain benefits supporting workers, parents or low-income households — which means those who don’t file their taxes probably aren’t receiving the benefits they’re owed.

Parliamentary Budget Officer Annette Ryan estimates in a new report that the federal government would pay out $342 million over five years under this new program, which she expects would cost $87 million to administer.

The budget office says lapsed or non-filers who don’t owe money to the CRA and get their taxes filed automatically under this new framework would receive an average of $2,212 for the 2025 tax year, and amounts would rise with inflation thereafter.

Ryan’s office assumes payments will begin in the next fiscal year for 3,000 eligible Canadians and that the CRA will scale the service up to 50,000 individuals for the 2027 tax year.

Craig Lord, The Canadian Press