Apr 8, 2024

Short-changed: Tax filing & benefits 

Research shows that around 10–12 per cent of Canadians do not file a tax return, thereby missing out on benefits they may be entitled to receive. Unfortunately, this is much higher among individuals living in poverty. 

Daily Bread’s latest report from the Click/Hear program, through which we regularly survey participating food bank clients, examines the barriers that food bank clients face when it comes to tax filing and explores prospective solutions to ensure people receive the benefits they are entitled to.  

As food bank use increases to historic levels, with a new record of 300,000 visits in Feb 2024, the 2023 tax-filing season is an important opportunity for people living on low incomes to tap into a wide range of federal and provincial tax benefits.

Here is what we found: 

Nearly 3 in 4 (70%) of survey respondents reported filing their taxes. 

Among survey respondents who filed their taxes, the most used methods for filing taxes were paid professional services (37%), community clinics (33%), filing themselves (14%) or relying on family/friends (10%). Respondents overwhelmingly reported that filing their taxes was important to them so they could get all the benefits to which they are entitled. Among those who filed, the most received benefits reported were the Goods and Services Tax (GST) Credit (78%), the Climate Action Incentive Payment (CAIP) (now called the Canada Carbon Rebate) (68%), and the Ontario Trillium Benefit (OTB) (46%).   

Unique barriers persist for both tax filers and non-tax filers. 

For survey respondents who filed taxes, the most cited barrier was the expensive cost of private tax help. Other challenges included the lack of user-friendly systems, challenges in self-navigating the processes, and mobility issues of getting to places to do their taxes. For survey respondents who did not file taxes, the most cited reason was because they were newcomers. Other reasons reported included the lack of necessary knowledge, absences (being away from Canada), and fear, mistrust, and lack of confidence. 

Regardless of whether they filed taxes or not, most survey respondents said they would use automatic tax filing, if it was available, to save time and money. 

In 2023, the federal budget included an announcement about an automatic tax filing pilot in 2024. Experts and advocates have called for automatic tax filing to better connect governments to hard-to-reach population and boost benefit uptake. When we asked food bank clients about their willingness to use automatic tax filing, the majority said yes but many voiced concerns about the service due to a mistrust of government, denoting that the government still has work to do in earning the trust of many hard-to-reach individuals. 

The report provides recommendations for the federal government to reduce barriers to tax filing and boost benefit uptake. To learn more, click here to read the full report. 

Not sure what benefits you are eligible for? Check out these two resources for help: 

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