As tax season approaches, millions of Canadians scramble to file their returns, often missing valuable credits. The Canada Revenue Agency's automatic filing initiative aims to simplify the process for very low-income individuals, but experts argue it falls short for the most vulnerable.
Current Limitations of Automatic Filing
According to a recent opinion piece by Alex Laurin, automatic filing primarily benefits those already in the system. The CRA prepared returns for about one million very low-income filers this year, expanding to 5.5 million by 2028. However, this does not address the deeper issue of non-participation among the most vulnerable.
Non-Filers: A Hard-to-Reach Population
Canada's true non-filing rate is estimated at 3.6%, or roughly 1.2 million people in 2023. These individuals are disproportionately young, Indigenous, or housing-insecure. Many mistrust the government or fear exposure of informal income. The CRA's SimpleFile service, which offers automated returns by phone, had a take-up rate of only 4% in 2025, compared to over one million returns prepared at community tax clinics with in-person assistance.
Complexity of the Tax System
Canada's tax system is layered with credits for child care, medical expenses, disability supports, and more. The CRA can complete returns for only about a third of Canadians using third-party information. Even so-called "return-free" systems in other countries require taxpayer input for gig work, multiple jobs, and new credits.
Moving Forward
The federal budget targets filers with zero tax owing and low income entirely captured on information slips, limiting error risk. However, Laurin emphasizes that trust and human interaction remain crucial for reaching hard-to-reach populations. Automatic filing alone is not a complete solution.
