May 6, 2025
Summary: How well did the Canada Revenue Agency’s CVITP do serving those living in poverty in 2023 when they needed their income tax and benefit return prepared in the 2024 return filing season? The Canada Revenue Agency (CRA) does not provide any information on the CVITP’s coverage of those living in poverty. Nor does it provide any information on the income situation of the CVITP’s clients. Therefore, this question cannot be answered definitively.
Despite this, it is still possible to make a good estimate.
Take the number of people served by the CVITP in 2024 (857,540) and assume that they all lived below the official poverty line in 2023. (This is a generous assumption as the CVITP serves some people whose incomes lie above the poverty line but below the income ceilings used to establish CVITP eligibility.) Then compare this number with the total number of adults living below the poverty line in Canada in 2023 (3,168,000). The comparison of the two figures suggests that in the 2024 tax season the CVITP served, at best, 27% of those living in poverty in 2023.
This is a small improvement over the 25% coverage in the previous year and is to be welcomed. But it still means that at least 73% of those living in poverty in 2023 did not get free CVITP assistance in the 2024 return filing period.
What happened to these people? Either they prepared and filed their return themselves, paid someone else to do it or else simply did not file a return.
Unfortunately, there is no data available on this group.
What is the CRA doing about this? The CRA seems to be focusing its efforts to reach low-income Canadians through two other initiatives: the non-filers benefits letter campaign, and a pilot for automatic tax filing called “SimpleFile”. In other articles, I show why the non-filers benefits letter campaign produces dubious results and the SimpleFile pilot suffers from serious shortcomings.
Both initiatives presently show less promise than the CVITP in tackling the fundamental problem of helping a greater percentage of those living in poverty access the benefits to which they are entitled.
Now that the federal elections are over, Statistics Canada has released poverty data for 2023. It shows that poverty increased from 9.9% in 2022 to 10.2% of the Canadian population in 2023.
How well did the Canada Revenue Agency’s CVITP do serving those living in poverty in 2023 when they needed their income tax and benefit return prepared in the 2024 return filing season?
The CRA does not provide any information on the CVITP’s coverage of those living in poverty. Nor does it provide any information on the income situation of the CVITP’s clients. Therefore, I cannot answer this question definitively.
But a pretty good estimate can still be made.
A short digression on the relationship between CVITP income ceilings and the official poverty line
(The reader can skip this section if they are familiar with the distinction between these two concepts and their consequences for CVITP client selection.)
According to Statistics Canada’s Canadian Income Survey for 2023, there were 3,168,000 adults living in poverty in 2023. What percentage of these adults were able to get help through the CVITP to file their 2023 return?
The CRA’s statistics page for the CVITP tells us that 857,540 adults were served by the CVITP in the 2024 return filing season. But it is impossible to tell if all these adults were living in poverty in 2023. Why?
The CRA states that the CVITP is intended to serve those living on low and moderate incomes, not just those living in poverty. What does this mean in practical terms?
The CRA proposes income ceilings or thresholds that host organizations use as cutoff points for determining client eligibility. The CRA suggests that only individuals and families with incomes below these amounts should receive the free CVITP service. For the past six years, the CRA’s suggested income ceilings for an individual and a couple have been respectively $35,000 and $45,000. How do these income ceilings compare with the official poverty line?
The official poverty line rises each year because of inflation. In general, as the poverty line has climbed, it has come closer to the CRA’s suggested income ceiling. However, the real story is a little more complicated than this.
There are 66 Market Basket Measure-based (MBM) poverty lines reflecting the very different living costs in the diverse communities that make up Canada.[i] The 2023 figures for the poverty line range from a low of $45,250 (in Quebec) to a high of $121,971 (in Nunavut) for a reference family of four (two adults with two children).
This translates into poverty income thresholds for an individual and a couple of as little as $22,625 and $31,997 respectively if they live in the least costly location in the country. If, on the other hand, they live in the costliest location in Canada, this translates into poverty income thresholds for an individual and a couple of as much as $60,896 and $86,119 respectively.
Therefore, the CRA’s suggested income ceilings may be above the poverty income thresholds for an individual and a couple in low-cost locations but below these in high-cost locations in Canada.[ii]
Although the CRA’s income ceilings for the CVITP are merely suggested, most host organizations seem to adhere to them in areas where the thresholds remain above the official poverty line. Where the poverty line approaches the CRA’s suggested income ceilings, host organizations have used their discretion to raise the income ceilings they apply in selecting clients.
Thus, over time a growing percentage of the individuals assisted by the CVITP have probably fallen below the income ceilings. This means the CVITP should be increasingly serving those in genuine need of the service as they are living in poverty. Nevertheless, it is still possible in 2024 that the CVITP served some low-income individuals and families who were not living in poverty.
Despite this, an educated guess can be made as to the percentage of those living in poverty in 2023 who were served by the CVITP in the 2024 return filing season.
Back to the main argument
How?
Take the number of people served by the CVITP in 2024 (857,540) and assume that they all lived below the official poverty line in 2023.[iii]
Then compare it with the total number of adults living below the poverty line in Canada in 2023 (3,168,000).[iv]
The comparison of the two figures suggests that in the 2024 tax season the CVITP served, at best, 27% of those living in poverty in 2023.[v]
This is a small improvement over the 25% coverage in the previous year. This is to be welcomed. But it still means that at least 73% of those living in poverty in 2023 did not get free CVITP assistance in the 2024 return filing period.
What happened to these people? Either they prepared and filed their return themselves, paid someone else to do it or else simply did not file a return.
Unfortunately, there is no data available on this group.
Those living in poverty often do not have the means to pay for their return to be prepared and filed. But the cost of filing a return through a commercial service provider is not the only problem. Lack of awareness about the CVITP or restricted access to CVITP services due to excessive demand – either of these may also be a reason why a significant portion of low-income Canadians do not file a return.
What is the CRA doing about this?
I assume that the CRA wants to both reduce the number of non-filers and eliminate the cost of filing a return for those who can least afford it. Why? Because filing a return is necessary if those living in poverty are to get and maintain their eligibility for the poverty reducing benefits to which they are entitled.
Therefore, greater access to a free return preparation and filing service is, in principle, desirable. The obvious way would be to scale up the CVITP. Indeed, the CVITP is identified in the federal government’s 2018 Poverty Reduction Strategy as the CRA’s contribution to meeting the strategy’s goals.
Prior to the COVID pandemic, the CRA had great ambitions for the CVITP. However, post-pandemic the CRA appears to have scaled back these ambitions. In particular, the CRA no longer sets targets for reaching more clients.
Through the introduction of the pilot grant project, the CRA appears to have gambled that more community-based organizations and their volunteers would have an incentive to offer CVITP services. However, these incentives were insufficient: the numbers of host organizations and volunteers have still not reached their pre-pandemic levels. The pilot grant project mostly encouraged host organizations that had closed their doors during COVID to reopen them to offer CVITP services. While there have been increases in the number of clients served each year since the CVITP’s nadir during COVID, these increases have largely been achieved through improvements in the productivity of existing host organizations and their volunteers.
With the extension of the pilot grant project to a fifth year, together with a change to its funding formula which reduces the grants on offer, existing host organizations are unlikely to secure the same level of funding they did in the fourth year. And future grant funding is uncertain.
Therefore, it is unclear what the CRA’s goals for and commitments to this program are in the coming years.
The CRA seems to be focusing its efforts to reach low-income Canadians through two other initiatives: the non-filers benefits letter campaign, and a pilot for automatic tax filing called SimpleFile. In other articles, I show why the non-filers benefits letter campaign produces small yet dubious results and the SimpleFile pilot suffers from serious shortcomings.
Both initiatives presently show less promise than the CVITP in tackling the fundamental problem of helping a greater percentage of those living in poverty access the benefits to which they are entitled.
[i] See this article for a simple explanation of how Canada’s official poverty line is derived.
[ii] While the CVITP income ceilings use total income and the official poverty line uses disposable income, I explain here why the two can be compared in this context.
[iii] This is a generous assumption as some CVITP clients who were served had incomes below the CRA’s suggested income ceilings but above the official poverty line in their region.
[iv] Why 2023? The CVITP volunteers filed the 2023 income tax and benefit returns for the people assisted in the 2024 return filing season. So, it was the income levels for 2023 that were relevant for selecting those served in the 2024 return filing season.
[v] I say “at best” because I am generously assuming that all the people receiving free CVITP services were living in poverty, even though we know that the CVITP serves some clients who have low incomes but who are not, strictly speaking, living in poverty.