Category Archives: Statistics Canada

Using Municipal Poverty Data to Better Target CVITP Service

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In a previous article, we argued that the CVITP is not serving enough of Canada’s poor.  In that article, we looked only at the national picture.  Under the most generous assumptions, we determined that the CVITP served at best only one in every five poor people in Canada.

In this article, we look briefly at 2020 provincial and territorial level data (the most recent year available) to establish CVITP coverage (again, using a very generous assumption).  Our estimates reconfirm that CVITP service to the poor remains surprisingly low across Canada (with the lower populated regions doing a comparatively better job).

Given the CVITP’s very limited delivery capacity, we believe that the best way to serve more of the poor is with better targeting.  But to do this effectively, host organizations need poverty data at the local level.  By this we mean both reaching out to specific groups to encourage them to use the service and greater selectivity in whom the service is provided to.

A new Statistics Canada website where poverty data for most Canadian municipalities can be found offers the CRA and host organizations the information needed to devise strategies to improve access to CVITP services for those who need it the most.  But we argue it is unclear whether either group has the will to make this happen.

How Many People Failed to File a 2021 Return?

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This is the first article in a three-part series.  This article argues that, while the number of current non-filers may not be as large as some popular estimates, the number is still very large and represents a serious drag on the federal government’s poverty reduction objectives.

Robson and Schwartz estimate 10-12% of Canadian residents eligible to file a return failed to do so in 2015.  While this estimate continues to circulate in the media today, other estimates suggest the non-filer rate has fallen significantly since then.  Using one of the more intuitive methods employed by Robson and Schwarz, we estimate that the non-filer rate had dropped to around 4.8% by 2021.  However, this still means that approximately 1.5 million Canadian residents eligible to file a return failed to do so in 2021.  As most of these were low-income residents, many missed claiming federal and provincial or territorial income-tested benefits designed to reduce poverty.  Getting these residents to file a return will be key to meeting the federal government’s objectives laid out in its 2018 Poverty Reduction Strategy.

The next two articles will propose elements of a strategy whereby the CRA could make more effective use of the CVITP to reduce the number of non-filers, making an important contribution to poverty reduction.

Auditor General Critical of Another CRA Effort to Identify Non-filers

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In our first article in this three-part series, we argued that the Canada Revenue Agency’s (CRA) Non-filer Benefits Letter Campaign was, at best, seriously underperforming on its intent, to get non-filers to file their outstanding returns.

In our second article, we look at what else the CRA may be doing to identify non-filers.  A February 2022 report from the Auditor General of Canada to Parliament (AG) entitled “Access to Benefits for Hard-to-Reach Populations” sheds further light on this question.  The report looks at the work of Employment and Social Development Canada (ESDC) in administering the Guaranteed Income Supplement (GIS) and the Canada Learning Bond (CLB), and the work of the CRA in administering the Canada Child Benefit (CCB) and the Canada Workers Benefit (CWB).

The AG focused on how well ESDC and the CRA are doing in getting these benefits to all residents who are eligible to receive them, what it calls the coverage rate.  Since the filing of a return is a condition for obtaining (CWB) or maintaining (GIS and CCB) the benefit, or again for establishing eligibility for the benefit (CLB), the CRA’s and ESDC’s work on the take-up gap, or the percentage of eligible residents who are not benefit recipients can inform the discussion about non-filers.

The AG found that “[ESDC and CRA] estimates overstated the take-up of benefits because they did not always account for people who had not filed tax returns, which are required to access most benefits.”  The AG also found that the CRA and ESDC “did not have a complete estimate of the overall take-up rates of the selected benefits.  Nor did they know the take-up rates of specific hard-to-reach populations known to experience barriers to accessing benefits.”  What was the CRA doing to improve its understanding of the size of the gap between eligible and actual benefit coverage?  The AG found that “[n]o tangible progress had yet been achieved in data collection, measurement, or analysis of benefit take-up.”

Finally, this article examines the relevance of the AG’s report to the CVITP.  CVITP host organizations know that one of the key barriers to filing a return is the lack of free return preparation services.  This is why these organizations offer CVITP services: they understand that, for the clients they serve (many of whom fall squarely within the hard-to-reach populations identified by the AG), providing this free service is critical to obtaining federal and provincial or territorial benefits which contribute toward reducing income-based poverty.

The first two articles in this series set the stage for what more the CRA could be doing to reach non-filers, the subject of the third and final article.

Disappointing Distraction: The CRA’s Non-filers Benefits Letter Campaign

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Two years ago, we posted an article on the issue of non-filers.  We are now updating this with a series of three articles.

The first article in this series looks at the Canada Revenue Agency’s (CRA) non-filer benefit letter campaign which has been running for six years.  This campaign entails the CRA sending letters to people who have not filed a return in the most recent tax season.  These letters outline the benefits of filing a return.  Then the CRA tracks whether or not the letter recipients file a return in the next tax season.

We argue that the performance of this campaign has been, at best, insufficient at dealing with the size of the non-filer problem.  Less charitably, we argue that it represents a minimalist effort on the part of the CRA.  Worse still, we believe the success of this effort, such as it is, is based on the faulty assumption that these letters actually motivate recipients.  Research commissioned by the CRA and others shows that a lack of knowledge about the benefits of filing is not identified as one of the main barriers to filing a return.  The CRA makes very little data available on this initiative but we strongly suspect that, even in the absence of this letter campaign, a similar number of non-filers from one tax season would likely file in the next.

This article lays the groundwork for a discussion in the next two articles of more effective approaches to addressing the issue.  As we hope will become readily apparent to the reader, the CVITP has an important, but as of yet vastly underexploited, role to play in helping to tackle this issue.

Trends in Poverty Reduction With Implications for the CVITP

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Our website is focused on the link between the CVITP and poverty reduction.  The federal government’s first ever Poverty Reduction Strategy, introduced in 2018, set a target for reducing the poverty rate by 2020 by 20% from its 2015 level.  In March 2022, the Official Poverty Dashboard of Indicators maintained by Statistics Canada indicated that the poverty rate, which was 14.5% in 2014, had declined to 6.4% in 2020.  This is well in excess of a 20% reduction!

However, Statistics Canada recently released a paper which revised the poverty rate for 2020 to 8.1%.  This revision took into account the 2021 Census of Population figures.  While not as impressive as 6.4%, it still exceeds the target the government set for reducing poverty by 2020.

But this accomplishment is likely to be short-lived for two reasons.

First, 2020 saw the introduction of a large number of benefits to help people who had suffered loss of income due to COVID related lockdowns.  While not the intended objective, these benefits lowered income inequality as well as the proportion of the population living on low incomes.  While many of these supports were maintained in 2021, these income supports were largely withdrawn in 2022 as the economy opened back up.

Second, 2022 has also seen rising price inflation.  Price inflation disproportionately impacts those on low incomes, reducing their purchasing power, as people in this group live on fixed incomes or low wages which do not rise as fast as inflation.

Whether or not these two factors have led to an increase in the poverty rate will only be known in March 2024 when Statistics Canada releases its poverty data for 2022.  The implications for the CVITP will be evident more immediately as an increasing number of residents fall into poverty, becoming eligible to receive federal and provincial or territorial government benefits which are income tested.  Since the filing of a current income tax and benefit return is a condition for receiving many of these benefits, the federal government will be keen to facilitate filing.

But will the CVITP be ready to provide this service in the 2023 season to an expanding clientele?  The most recent figures for the CVITP show, at the very least, that the CRA will struggle to do this. Consequently, many low-income people who are eligible for this service in 2023 will likely have to turn to commercial return preparers to file in a timely manner.  Others will file late, risking interruptions in the flow of their benefits.

For more details, see our full article on this topic here.

CRA Data and Analysis Suggestions for a More Effective CVITP Strategy

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As mentioned in a previous article, one priority in her Supplementary Mandate Letter from the Prime Minister (dated January 2021) instructs the Minister of National Revenue to “enhance and expand the Community Volunteer Income Tax Program”.  One thing the Canada Revenue Agency (CRA) can do to help achieve this is through placing greater emphasis on another priority mentioned in the same letter, instructing Minister Lebouthillier to “improve the collection and analysis of disaggregated data related to supports and services offered by the CRA.”

Data needs to be collected and analyzed for at least two reasons.  First, to confirm whether or not the CVITP is meeting its intended objective.  And second, where the CVITP is falling short of its intended objective, to help devise strategies to ensure the program can better meet its intended objective.

We think the Canada Revenue Agency (CRA) currently has two related problems with respect to CVITP data.  First, it collects the wrong data and publishes too little of what it does collect.  Second, this means the CRA focuses on doing the wrong things.

In this two-part series of articles, we look at data and its use in formulating strategy.

In the first article, entitled “First, the CRA Needs to Collect and Analyze the CORRECT Data”, we examine the data that is collected and analyzed on clients and their returns.  We begin with the uncontroversial observation that data needs to be collected and analysed to confirm whether or not the CVITP is meeting its intended objective.  We then refer to a previous article in which we argued that the CRA presently collects and reports CVITP results data which are not aligned with the purpose and in which we offered alternative performance indicators which we believe do a better job of this.  We also look at the data the CRA currently collects on CVITP host organizations and volunteers – what we call the delivery infrastructure – and make some modest suggestions for additional data to be collected through the annual registration process just prior to the tax season.

In the second article, entitled “Then, the CRA Needs to Build a Strategy With a Focus on Improving EFFICIENCY”, we look at how all this data can be used to devise strategies to ensure the CVITP can better meet its intended objective.  The combination of analyses of data on CVITP results and delivery infrastructure can help to inform the choice of actions to be taken.  The strategic priority we focus on is increasing the number of CVITP clients.  We argue that the CRA should place greater emphasis on increasing efficiencies within the existing delivery infrastructure over increasing the size of the delivery infrastructure.  A few examples are offered to illustrate how data on results and delivery infrastructure could be used to do this.

Getting Good Results

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In this series of articles, we begin by reviewing the purpose of the CVITP. While the Canada Revenue Agency publications do not give a formal purpose, we look through recent government references to the CVITP and suggest that its purpose is to help individuals on modest and low incomes, and especially vulnerable individuals, to file their income tax and benefit returns.

We then ask whether or not the CVITP is achieving this purpose.  We conclude that the information provided in the Canada Revenue Agency’s current results framework for the CVITP is not useful because it does not tell us if the program is serving the intended population.  Furthermore, the results the Canada Revenue Agency reports on, based on this framework, do not enable us to know if recent budget increases for the CVITP are helping it to reach a greater proportion of its intended population.

To address these weaknesses, we propose an alternate results framework for the CVITP.  We believe it holds more promise for providing the Canada Revenue Agency with results data which will allow for more strategic decision-making, better ensuring the CVITP lives up to its stated intention.

The Issue of Non-filers

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Conservative estimates suggest there are over 1 million eligible people in Canada who do not file annually.  A significant number, perhaps the majority, are individuals living on very low incomes.  Because they do not file, they are missing out on important federal and provincial/territorial benefits.

The Canada Revenue Agency (CRA) recently introduced an initiative to encourage low-income non-filers to file their income tax and benefit returns.  However, the success rate for this initiative is pitifully low.

This article suggests why the CRA should and how it could work with CVITP host organizations to significantly increase the number of low-income non-filers who decide to file returns.

A Primer on Canada’s Official Poverty Line and Why It Matters to the CVITP

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Canada’s Poverty Reduction Strategy gives time-bound targets for making progress in reducing poverty linked to one indicator.  This suggests that the federal government can be held accountable for its efforts in achieving these time-bound targets.  The indicator it uses is an official poverty line.  The official poverty line is a uniquely income-based concept.  The targets are as follows:

– By 2020, the poverty rate will be reduced by 20% from its 2015 level, and

– By 2030, the poverty rate will be reduced by 50% from its 2015 level (aligned with the United Nations Sustainable Development Goals)

In other words, the official poverty line can be used to calculate the poverty rate: the percentage of the population with an annual income lying below this line at a particular point in time forms the poverty rate.

In an article entitled A Primer on Canada’s Official Poverty Line and Why It Matters to the CVITP, we explore what the official poverty line is and how it is used to determine poverty rates.  In the conclusion, we draw the CVITP’s connection with this official poverty line.  As you will see, the income tax and benefit returns processed by the CVITP play a crucial role in helping to raise clients’ incomes relative to the official poverty line.