Assuming that all CVITP clients live below the official poverty line, the CVITP reaches at best one in four people living in poverty and has been stuck at this level of performance for the last 5 years. This should be of concern to the federal government if it wants to help people living in poverty to get the benefits they are entitled to, most of which help to reduce their income-based poverty. So, what is the federal government doing about this?
Recently, I provided an assessment of the CRA’s 2023-27 poverty reduction plan. This included the Office of the Auditor General’s statement that the Canada Revenue Agency (CRA) did not demonstrate any link between the actions it chose to include in this plan and the federal government’s poverty reduction target for 2030. I found this omission strange. The CRA manages the system for processing income tax and benefit returns and issuing Notices of Assessment. Both are fundamental steps toward accessing the federal, provincial/territorial and municipal network of income-tested financial support and subsidies for essential goods and services. Ideally, the CRA’s plan for contributing to poverty reduction could focus on the actions it takes to facilitate access to this system by households living in poverty.
I also reviewed the other CRA programs intended to help low-income households file their income tax and benefit returns. The Non-filers Benefits Letter Initiative was discontinued in 2024. SimpleFile has run since 2018 but shown very low rates of adoption. Two other programs – deemed filing and pre-filled returns – that together make up what the CRA calls automatic tax filing have yet to be implemented.
In this article, I first show that the CVITP is the CRA program currently best fit for the task of helping low-income households to file their returns, whether they have previously filed or not. I explain why it is likely to do a much better job than automatic tax filing of getting non-filers the benefits to which they are entitled, the original reason for introducing automatic tax filing. I then identify and explain three puzzles which raise questions about the CRA’s future commitment to the CVITP. Finally, I speculate on why the CRA will likely leave these puzzles unresolved until 2029.
