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Extend tax filing deadline to ensure low incomes receive benefits

April 22, 2020

3-minute read

With the ongoing COVID-19 state of emergency, the federal government should waive the requirement that low-income individuals complete their 2019 tax forms by June 1st to continue to receive benefits—or extend the tax filing deadline for low incomes until much later.

Millions of low-income families, seniors, and people with disabilities receive benefits and refundable tax credits, which require annual filing of tax forms for the payments to continue from July onwards. 

For many households, these monthly supports are their biggest source of income. They are the centrepiece of Canada’s national anti-poverty plan and individuals with no extra savings can’t afford to get by without them.

They include the $13-billion Guaranteed Income Supplement (GIS) which provides up to $11,000 for low income seniors, the $25-billion Canada Child Benefit which provides up to $6,939 per child, the $5-billion Low Income GST Credit, the $2-billion Canada Workers Benefit, and the $4.3-billion in Climate Action Incentive Payment: over $50 billion in federal funds alone.

Every province and territory also provides additional credits and benefits linked to these federal programs that won’t flow to vulnerable Canadians unless they file their tax forms on time.

Many fortunate Canadians will be able to file their taxes by the June 1 deadline with the assistance of family, friends, accountants or commercial tax preparers. But thousands of low-income seniors, families, Indigenous Canadians, and newcomers rely on free community tax clinics to file. In 2018, thousands of volunteers helped over 830,000 low-income Canadians file their taxes.

Thanks to COVID-19 virtually all of these clinics has been cancelled across Canada. Most are face-to-face services that can’t easily be done remotely or through a Zoom meeting. The Canadians who depend on these volunteer tax programs often can’t afford home computers, internet connections, and some don’t even have telephones. With libraries, community services and Service Canada offices closed, they don’t have public facilities to fall back on either.

Even if the states of emergency end in mid-May, it would be impossible for volunteers to fill out hundreds of thousands of tax forms in just two or three weeks when they usually have two to three months. Many of the Canadians who need the in-person support are also the most vulnerable to the virus -- seniors in residences and long-term care facilities, low-income seniors, families and individuals living in public housing, those with other health problems, and Indigenous Canadians. It would be reckless to expect them to meet.

The federal and provincial governments should immediately waive the requirement or extend the deadline for low-income Canadians to continue to receive benefits. This is a simple solution that would cost very little but prevent a lot of hardship for the most vulnerable.

Community organizations, volunteers, and Canadians for Tax Fairness have urged the federal government to extend the tax filing deadline for low incomes—as has NDP Revenue Critic Matthew Green, whose office also helps thousands of their constituents complete their tax forms—but there’s been no response yet.

The Canada Revenue Agency should also consider ways to improve how it processes Canadians’ taxes and delivers these critical benefits. It doesn’t really make sense for governments to require low-income recipients to fill out complicated tax forms—and to end their benefits if they don’t—when the CRA already has much of the information it needs to fill out these forms itself.  

For low income seniors, the CRA already has most of the information needed to determine if these individuals continue to qualify for their benefits. For those on social assistance or workers’ compensation, the CRA already has information from provinces reporting how much each individual has received.  As we’ve argued for years, the CRA should send out pre-filled preliminary tax forms for these groups and others, relieving them of the annual tax filing burden as many other countries already do.

Moving to an automatic tax assessment system would save Canadians the collective $5 billion plus we spend on filing our taxes each year—and would enable community organizations to get even more people to file their tax forms and receive benefits. About one in 10 Canadians, and a much higher share of vulnerable people don’t file their taxes every year and so don’t receive these benefits.

Federal and provincial governments must act now to waive the tax filing requirement for low-income individuals to receive the benefits they need to survive—but we should also consider longer-term reforms to our tax system so it operates better for all Canadians through both good and difficult times ahead.

Toby Sanger is director of Canadians for Tax Fairness and a past volunteer at community tax clinics.


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