How deemed tax filing can make claiming benefits easier for people with low incomes
Submission to the Department of Finance Canada consultation on automatic federal benefits
Each year, an estimated $1.7–$1.9 billion in federal benefits goes unclaimed, largely because people are unable to file taxes. Tax filing is the gateway to benefits that people rely on for housing, food, and other basic needs. When barriers prevent people from filing, they are effectively shut out of Canada’s income security system.
In this submission to the Department of Finance Canada’s consultation on automatic federal benefits, Maytree, Momentum, and Prosper Canada welcome the government’s decision to allow deemed tax filing – where the Canada Revenue Agency automatically files a tax return for eligible people with low incomes.
The submission explains why deemed filing matters, what’s at stake for people living on low incomes, and why the federal government should change its proposed design for automatic federal benefits to expand eligibility and provide benefits in a timely manner.
What the submission covers
- Why tax filing is the backbone of income security in Canada, and how gaps in filing perpetuates poverty;
- The limits of current approaches (SimpleFile, volunteer tax clinics, pre-filled returns) and why they are not enough on their own;
- Why deemed filing is a necessary paradigm shift, especially for people receiving social assistance;
- Concrete recommendations urging a more ambitious approach, including expanded and continuous eligibility, more timely benefits, and accelerated implementation;
- The importance of data sharing with provinces and territories to unlock automatic access to benefits; and
- The ongoing role of community organizations in ensuring accuracy, trust, and accessibility.
Grounded in lived experience and frontline expertise, the submission emphasizes that equitable access to benefits should not depend on someone’s ability to navigate complex systems.