Exploring the potential role of ePayroll in income-tested benefit and support programs 

How real-time payroll reporting could reshape Canada’s income security system — and what safeguards are needed

The Canada Revenue Agency is considering creating an ePayroll system to collect real-time payroll information from employers. The goal would be to modernize how pay and benefits data are shared across government programs.

While the idea promises efficiency, it also raises important questions about how we build systems that serve people first. Could real-time payroll data help deliver benefits faster and more accurately? Could it help expand benefits to workers who are sometimes excluded, such as those in the gig economy? Could it make payments less predictable for people who rely on them most?

In this new report written for Maytree, Norm Helfand examines how ePayroll could be used, and misused, in the administration of income-tested benefits such as Employment Insurance, the Canada Workers Benefit, and the Canada Child Benefit.

Looking ahead

As governments consider modernizing how income and benefits information is shared, new digital tools like ePayroll will shape the future of social policy. Maytree’s goal is to ensure that innovation works for people – that modernization strengthens stability, equity, and the human right to an adequate standard of living.

Key insights

• ePayroll has potential to simplify administration and verification. This is true particularly for programs tied closely to employment, such as Employment Insurance.
• Not all programs are suitable for real-time adjustment. Converting annual tax-based benefits like the Canada Child Benefit to monthly recalculations could create unpredictable payments for families and increase reporting requirements.
• International experience offers caution. The use of real-time information in other countries has led to payment errors and hardship for recipients in some instances.
• Privacy and governance must come first. Clear rules, worker access to their own data, and consent mechanisms are essential to build trust and prevent misuse.
• Good policy requires good evidence. Canada needs better data on month-to-month income volatility to inform how ePayroll could be used responsibly.

Recommendations

The paper calls on the federal government to:

1. Prioritize exploring the potential roles that real-time information collected through ePayroll could play in the social benefit and support system.
2. Understand the needs and perspectives of those with lived experience of precarious employment.
3. Conduct surveys and research to better understand in-year income volatility faced by Canadian workers.
4. Require that payments to digital platform gig workers and fee-for-service contractors be reported through ePayroll.
5. Use ePayroll to collect real-time information on employees’ access to employer-sponsored prescription drug and dental benefits.
6. Ensure that information systems and platforms established to use ePayroll data for EI administration have the capacity to support the delivery of emergency payments and other income-tested benefit and support programs.
7. The federal government should develop and consult on a comprehensive plan that identifies the use, privacy, and security of information collected through ePayroll.
8. Explore the establishment of a federal agency with the authority and capacity to manage and facilitate access to ePayroll data for determining eligibility for non-tax benefit programs.