New Immigrants Say Canadians Pay Too Much in Taxes: CRA Report

New Canadian citizens take an oath at a ceremony hosted by Immigration, Refugees and Citizenship Canada at Government House in Halifax on Nov. 20, 2017. Andrew Vaughan/The Canadian Press

Many new immigrants to Canada say Canadians pay too much in taxes, according to in-house research for the Canada Revenue Agency.

When asked if they arrived with any preconceptions about the Canadian tax system, newcomers often mentioned it being an “expensive” part of living in Canada, according to the report, “Qualitative Research On First Time Tax Filing With Newcomers To Canada.”

“Not only does tax on top of the price of goods and services add up quickly and make life in Canada expensive, there is also a perceived substantial difference between net and gross pay,” said the report, which was first covered by Blacklock’s Reporter.

The report said that because newcomers “are often earning little or no income in their early years in Canada,” they emphasized the need to keep as much of their income as possible.

“Any actual or potential deduction, either in the form of goods and services tax or income taxes, is concerning to them. The other main preconception was that preparing and filing taxes would be extremely complicated,” said the document.

Immigrants also complained that the Canada Revenue Agency information is confusing, that rules are “unclear and daunting,” and that the government used unfamiliar terminology.

“While it is assumed there is a common understanding of these terms, newcomers’ lack of experience with tax filing means this is not necessarily the case,” researchers wrote.

However, the report said that newcomers to Canada understand the value of taxes for quality of life in Canada and “therefore understand and accept their responsibility for filing income taxes,” adding that the idea of taxes being an “integral characteristic of living in Canada is something newcomers heard from family or friends who previously immigrated.”

Immigrants surveyed also said they understood Canadians were taxed in order to pay for schools, hospitals, and libraries.

“Newcomers indicated taxes are fundamental to quality of life. The fact roads are drivable and health care is free makes newcomers feel the tax they pay is actually being used to improve everyday life,” the report said.

According to the report, many newcomers had a sense that Canada’s tax system is transparent and accountable, and said they felt content paying towards benefits “they can actually see and enjoy, which is something they had not experienced in their home country.”

The report’s findings were based on focus groups with immigrants. The Revenue Agency paid $57,969 for the study by Environics Research.

According to the OECD report “Taxing Wages 2023,” Canadians’ take-home pay averages 74 cents for every dollar earned after taxes. Figures do not include the costs of property tax or the GST.