The Canadian government plans to empower the Canada Revenue Agency (CRA) to file tax returns for certain low-income Canadians without their explicit consent. This proposal, highlighted in the federal budget, aims to prevent vulnerable individuals from missing out on significant credits and benefits due to their failure to file tax returns.
L’ARC May Complete Tax Returns for Some Canadians
This initiative goes beyond the existing pre-filled tax returns available to millions of taxpayers. If approved, the CRA could automatically file tax returns for those who do not respond within 90 days of the filing deadline. Wayne Long, the parliamentary secretary for CRA, indicated that this change could be implemented by the 2026 tax season, provided the necessary amendments to the Income Tax Act are enacted.
Eligibility Criteria
The new measure targets a specific group of Canadians: those with an income below the federal basic personal amount of $16,129, as of 2025. To qualify, individuals must have all income sources that the CRA already possesses and have failed to file a return in at least one of the past three years.
Pre-Filled Tax Returns Initiative
- Ottawa also plans to introduce pre-filled tax returns for up to 5.5 million Canadians by 2029.
- Unlike the automatic filing program, these taxpayers will need to review and approve their information before submission.
The objective is to enhance access to benefits like the Canada Child Benefit and GST/HST credits, which are often left unclaimed. A study from 2020 cited by Ottawa revealed that approximately 12% of Canadians do not file tax returns. Most of these individuals are low-income earners who do not owe taxes but miss out on critical financial support.
Concerns About the Initiative
Experts caution that even with pre-filled returns, some benefits require additional information that the CRA may not possess, such as medical expenses, donations, or rental payments. Organizations like the Canadian Taxpayers Federation have criticized the CRA for acting as both a tax collector and preparer.
However, the government assures that no one will be penalized under this program, as eligible individuals would not owe any taxes. If someone is later found ineligible, their return would simply remain unfiled.
