Automatic tax filing for qualifying Canadians could see them receive an average of roughly $2,000, according to a new report, but doing so would also cost hundreds of millions of dollars over the next few years.
The Parliamentary Budget Officer (PBO) released a report Thursday outlining the cost of the program, which was announced in October.
The program will see the Canada Revenue Agency (CRA) prepare pre-filled tax filings for eligible individuals, mostly those with lower incomes who have a filing history and a simple tax situation. The intention of the program, according to Prime Minister Mark Carney when he made the announcement, is to help deliver more financial benefit payments to those who need them.
Those with lower incomes are more likely to qualify for benefit payments because they fall below the given thresholds, including for the new Canada Groceries and Essentials Benefit (replacing the former GST/HST credit), the Canada Child Benefit and the Canada Disability Benefit.
But many won’t see those payments unless they file their taxes.
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Filing taxes automatically for these Canadians comes with administrative costs and by facilitating more benefit payments through these automatic filings, there is also the cost of the benefits themselves.
The program will cost a total of $429 million over the next five years, when factoring in administrative costs as well as the benefit payments from doing automatic tax filing, the PBO predicts.
The PBO report says this year (for the 2025 tax year), the administrative costs alone will be $22 million, and $87 million over the next five years.
In the first year, the CRA expects about 3,000 tax returns will be filed automatically under the new program, but that will increase to 50,000 by 2027.
The PBO report says automatic tax filing is expected to send an average of $2,212 to qualifying Canadians in the 2025 tax year. That number would climb to $2,391 by the 2029 tax filing year, it said.
The PBO report comes just days after the Taxpayers’ Ombudsperson released its own report on the CRA, with recommendations for how to better improve services for Canadians.
Among the recommendations, the ombudsperson said the eligibility for automatic tax filing should be expanded to include all taxpayers whose tax situation may be considered “simple,” and “not just low-income individuals.”
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