500,000 Canadians Invited to Participate in Automatic Tax Filing Pilot Project

The Canada Revenue Agency sign outside the National Headquarters at the Connaught Building in Ottawa is seen on March 1, 2021. (The Canadian Press/Justin Tang)

Ottawa is expanding its automatic tax filing services to more than 500,000 lower-income Canadians as part of a nationwide pilot program it launched earlier this year.

The Canada Revenue Agency (CRA) invited more than half a million eligible Canadians in July to submit their 2023 tax returns by phone, online, or by mail using SimpleFile services, the agency said in a press release.

The national program, which was included in the 2024 federal budget, enables users to file tax returns in as little as 10 minutes, the CRA said.

“This automatic tax filing national pilot targets individuals who have never filed a tax return or who have a gap in their filing history,” the CRA said in the July 30 press release. “Tax filing by any method helps lower-income individuals access the benefit and credit payments they’re entitled to.”

The CRA in February invited more than 1.5 million lower or fixed income individuals to use SimpleFile by Phone, a service it described as free and “easy to use.” To date, more than 90 percent of those invited to use the system have filed their tax return, the CRA said.

Formerly known as File My Return, the automated service uses the information already on file with the CRA combined with answers provided by users to auto-file and process tax returns.

With all invitations combined, more than two million Canadians are now eligible to use the program.

How to File Your Taxes

The CRA has extended the program to include digital and paper options as well as phone filing.

Users must verify certain personal details and respond to a set of brief inquiries when accessing the phone or digital service.

Phone and digital customers who have a personal identification number (PIN) in My Account will receive an estimate of their net income, taxable income, and potential refund eligibility at the end of the call.

If a PIN has not been set up, an assessment notice will be delivered via mail or to the individual’s CRA account after their return has been processed.

SimpleFile phone and digital services are available 21 hours a day, from 6 a.m. to 3 a.m., EST, seven days a week.

Project Costs

The Parliamentary Budget Officer (PBO) estimated in a report last month that Ottawa could pay out over $8.5 billion in unclaimed government benefits to lower-income individuals over the first five years of the automatic filing project.

The calculation includes the Canada Child Benefit, Canada Workers Benefit, and Goods and Services Tax/Harmonized Sales Tax credit, all of which require individuals to submit a tax return in order to receive the benefits.

The PBO said the total administrative cost of implementing and operating the automatic tax filing system is estimated at $57 million in 2024-25 and $65 million in 2028-29.