This text is part of the special section Personal Finances
Canadians who fail to file their taxes are missing out on hundreds, if not thousands, of dollars in benefits. The non-profit organization Prosper Canada wants to put in place solutions to help low-income people get their due.
There are several reasons for this phenomenon among people in a precarious economic situation. One of them is that they are sometimes unaware that money is owed to them, says Elizabeth Mulholland, CEO of Prosper Canada. The organization’s mission is to educate low-income people in financial literacy. “But, in many cases, they are aware, but they wait before filing a tax return,” she points out. As some of them have debts, they fear that the government will pursue them to pay them or seize their bank account. “They live in fear and just don’t do it,” she says.
Other people have difficulty completing their return or gathering the necessary documents for its production. “People don’t even have ID. Others don’t have a social insurance number. They therefore need to get their birth certificate first, ”and then the other papers, illustrates Mme Mulholland. “And obtaining these documents costs money. If you don’t have one, it can be very expensive. »
Some taxpayers also come up against the language barrier, if they speak neither French nor English. “They may have cognitive or mental health issues, housing issues, literacy issues, so they can’t read the material and understand it,” Ms.me Mulholland.
Helping people get the money they’re owed
A single adult without children can qualify for the GST credit and the Canada workers benefit, among other things. “You’re probably missing out on at least $2,000 if you don’t file your tax return,” Ms.me Mulholland. By filing their declaration, parents with children could receive approximately $6,000 per child, she calculates. “If you are a senior with a low income, [en ne faisant pas votre déclaration] you could have a shortfall of about $800 per month in guaranteed income supplement, ”continues the ceo.
Taxpayers can recover tax credits and benefits by going back up to 10 years. “It’s definitely worth declaring your back taxes if you’re on a low income,” says Ms.me Mulholland. She therefore encourages people in this situation to find a tax counter near their home. “The Canada Revenue Agency (CRA) supports community income tax clinics,” recalls the CEO. of Prosper Canada. However, it specifies that not all of these establishments offer the service of income tax returns over several years.
She emphasizes the need for year-round access to such counters, and not just during peak periods. Thus, the fact of completing several declarations simultaneously can sometimes make it possible to receive a significant amount of money. “It could mean going back to school to qualify for a better job, capital to start a business, savings for their children’s education. This money makes a big difference for people,” says Ms.me Mulholland.
Many taxpayers who fill out such declarations at the same time are moreover “relieved” to understand that they do not owe the government, but rather the reverse. “Their reaction is ‘what do I do with all this money?’ Often, they have never seen such a staggering sum before,” explains Ms.me Mulholland.
The receipt of large amounts then opens the door to a discussion of personal finances. “This allows them to assess their situation and look at their budget to make the best use of these sums,” she adds.
Solutions to better orient people
On its website, Prosper Canada has also developed a tool to guide people and determine the amounts to which they are entitled. “There are more than 300 federal and provincial benefits across the country,” recalls Ms.me Mulholland.
The organization has also set up a directory of organizations across Canada that help taxpayers file their income tax returns.
Mme Mulholland says the CRA has tried “a lot” to increase the number of Canadians filing their taxes. But she also believes that better communication between the federal government and the provincial Department of Revenue would better reach these people. “There are a lot of people who want to help solve this problem. But we don’t work very effectively together. It is the job of the RCAF to build this sustained coordination capability. »
This special content was produced by the Special Publications team of the Duty, pertaining to marketing. The drafting of Duty did not take part.