A “culture shift” is beginning when it comes to taxes: two million Canadians will be able to file their taxes only by telephone next year.
The “Simply File” pilot project had a 90% success rate. The federal tax authorities quietly launched the program in 2018, before gradually expanding it. After a successful 2024 tax season, Ottawa says it is ready to make the simplification permanent.
The program is by invitation only and is primarily intended for the less well-off. Ottawa has “invited” 1.5 million people to file their income tax returns by telephone this year, double the number from last year. Of that number, nearly 90% responded. Some 500,000 more people will be invited next year in the wake of this success, confirmed federal Revenue Minister Marie-Claude Bibeau in an interview with The duty.
“The goal is really to get as many people as possible to file their tax returns. On the one hand, obviously, we want everyone to do their fair share. But we also want the most vulnerable people to file their returns, because that’s the way to get credits and benefits.”
Nearly $92 million was reimbursed this year, the result of a “change in culture” taking place within the Canadian tax system, she says.
A team dedicated to these telephone declarations has been set up. Not only does this formula make life easier for taxpayers, it also integrates into the government apparatus all those who cut ties with the authorities — by choice or not. Approximately 118,000 Canadians who were off the government’s radar were contacted this year with the help of provincial partners to have them complete their declaration. However, only 30% of them agreed to get back on the path to tax compliance.
Air for aid agencies
This reform gives breathing space to community organizations that rely on helping the most vulnerable during tax season. Whether they are recent arrivals in the country, low-income or elderly, thousands of Canadians show up at tax clinics.
“Taxes are a huge stress for them,” says Iris Venderschuret, of the Saint-Laurent Volunteer and Community Action Centre. “Most seniors are a bit lost among the forms. Some easily lose their documents,” she says.
Because they don’t have all their documents, some people fail to honor their tax obligations. In the end, they lose precious dollars, which for many represent their entire income for a certain period of time.
Making a declaration with a simple phone call allows you to receive your check more quickly and avoid painful days without money, she says. “It will also help seniors, who will not need to go through us. Many are losing their autonomy. It could save them from having to travel, from taking adapted transportation to our home.”
Enthusiastic about the initiative, she notes that only about 10% of the center’s clientele can protect themselves from it.
When will there be a 100% automatic declaration?
Fully automatic tax filing is a reality in 36 countries. Germany, Japan and Great Britain, for example, have it. Why not Canada?
First, Canadian law requires that authorities seek the taxpayer’s consent to confirm income. It is therefore impossible to avoid contact with the Canada Revenue Agency unless the law is changed.
Then, this agency does not only collect taxes: it also pays benefits. Since these depend on a person’s status (couple, single, with children, with dependents, etc.), a status that must be confirmed since it can change, you will have to deal with the tax authorities for as long as you want to benefit from these tax refunds.
This text is taken from the Courrier de l’économie.