November 13, 2024
Summary: Our work is based on the connection the federal government has drawn between poverty reduction and the CVITP in its 2018 Poverty Reduction Strategy. Specifically, this strategy recognizes the important role the CVITP plays in providing access to the many federal (and provincial/territorial) benefits designed to reduce poverty.
Following the publication of the 2018 Poverty Reduction Strategy, the Poverty Reduction Act was adopted as law by Parliament in 2019. Among other things, the Act requires the federal government to set up a National Advisory Council on Poverty. To date, the Council has produced five annual reports (2020 – 2024), all of which are available here. Yet nowhere in these five reports is any mention made of the CVITP. We find this surprising.
In its reports, the Council urges improved access to existing benefits. Yet the Council never considers the role that the CVITP currently plays in facilitating access to these benefits, the challenges it currently faces in doing this and its weak performance in meeting these challenges.
Instead, the Council seems to be gambling on the automatic tax filing promises of the federal government to deliver better access to benefits. Our analysis of SimpleFile, the name for the CRA’s current pilot project for automatic tax filing, suggests it has many problems with its current design.
The Council must not lay all its hopes for improved access to benefits in the distant – and risky – promise offered by the CRA’s automatic tax filing proposition.
In the immediate, the Council should draw the Minister’s attention to the CVITP’s weak performance as there are likely few if any other voices the federal government will pay much attention to when holding the CRA to account for managing this program.
The Council could go a step further and publicly support the CVITP related recommendations of the CRA’s own ombudsman, as contained in that office’s 2020 report on the CVITP as well as its most recent annual report.
Our work is based on the connection the federal government has drawn between poverty reduction and the CVITP in its 2018 Poverty Reduction Strategy. This strategy recognizes the important role the CVITP plays in providing access to the many federal (as well as provincial and territorial) benefits designed to reduce poverty.
Following the publication of the 2018 Poverty Reduction Strategy, the Poverty Reduction Act was adopted as law by Parliament in 2019. The Act includes the 2020 and 2030 income-based targets for reducing poverty contained in the Strategy. (The metric for these targets is the official poverty line which makes use of a market basket measure.)
Perhaps less well known but also contained in the Act is the requirement of the federal government to set up a National Advisory Council on Poverty (hereafter referred to as “the Council”). The function of the Council is to:
- provide advice to the Minister on poverty reduction in Canada, including with respect to programs, funding and activities that support poverty reduction;
- undertake consultations with the public, including the academic community and other experts, Indigenous persons and persons with lived experience in poverty;
- within six months after the end of each fiscal year, submit a report to the Minister:
- on the progress being made in meeting the targets referred to in section 6 and the progress being made in poverty reduction measured by, among other things, the metrics set out in the schedule, and
- on the advice that the Council provided to the Minister under paragraph (a) during the fiscal year; and
- undertake any activity specified by the Minister.[i]
To date, the Council has produced five annual reports (2020 – 2024). Yet nowhere in these five reports is any mention made of the CVITP. We find this surprising. Why?
Improving access to benefits
The Council’s reports recognize the multidimensional nature of poverty. They equally recognize that income insecurity plays an important role in contributing to poverty. In this regard, the Council takes a two-pronged approach, emphasizing the importance of employment as well as government financial support for alleviating poverty. The Council urges improved access to existing federal as well as provincial and territorial benefits and the need to increase these benefits to levels commensurate with the official poverty line.
What is puzzling is that in its discussion of improving access to benefits, the Council never considers the role that the CVITP currently plays in ensuring that access. This is a missed opportunity.
The CVITP’s weak performance is not recognized by the Council
The Council’s first function is to “provide advice to the Minister on poverty reduction in Canada, including with respect to programs, funding and activities that support poverty reduction”. It has failed to do this with respect to the CVITP.
The CVITP is prominently featured within the 2018 Poverty Reduction Strategy, listed fourth (after the Canada Child Benefit, Guaranteed Income Supplement and Old Age Security) of well over 100 federal government programs, funding and activities that support poverty reduction. The Strategy’s description of the CVITP states: “Through the Community Volunteer Income Tax Program, community organizations host free tax preparation clinics to help individuals access benefits and credits to which they are entitled.”
Although the CRA quadrupled its CVITP budget in recent years to support this challenge, the CVITP is not living up to its promise. Between the 2019 tax season and the 2023 tax season, its performance has improved only marginally. Furthermore, it is serving only a fraction of those living in poverty. And that fraction risks shrinking in the years to come unless the CRA makes significant improvements to this program.
The CRA does not publicly acknowledge this underperformance. Instead, it has quietly scaled back its ambitions for the CVITP.
The Council could be calling out the CRA for its poor performance in growing the CVITP to keep pace with the growing numbers of those living in poverty.
The Council lays its hopes for improved access to benefits elsewhere
However, the Council has to date overlooked the CVITP’s role in facilitating access to these benefits, the challenges it currently faces in doing this and its weak performance in meeting these challenges. Instead, the Council seems to be betting on the automatic tax filing promises of the federal government to deliver better access. The federal government has promoted this as the solution for those living in poverty to better access their benefits.
Having initially tabled the idea in a Speech from the Throne in 2020, the CRA launched its automatic tax filing pilot in 2024. Called SimpleFile, the pilot is built in part on an existing program (previously called File My Return) which has delivered very poor results. Our analysis of the SimpleFile pilot suggests there are many problems with its current design.
It will take more time, likely many more years of experimentation, to iron out these problems.
Once established, a limited number of current CVITP clients may shift over to using SimpleFile. But SimpleFile is unlikely to have a direct impact on the percentage of low-income residents with access to benefits. It may happen indirectly in the longer term, as some CVITP clients shift to using SimpleFile, gradually freeing up the CVITP’s capacity to serve new clients.
However, in the short to medium term a growing percentage of those living in poverty will have difficulty getting their benefits because they can’t file an income tax and benefit return through the CVITP.
The Council should point out what needs to be done now
The Council must not lay all its hopes for improved access to benefits in the distant – and risky – promise offered by the CRA’s automatic tax filing proposition.
In the immediate, the Council should draw the Minister’s attention to the CVITP’s weak performance as there are likely few if any other voices the federal government will pay close attention to when holding the CRA to account for managing this program.
The Council could go a step further and publicly support the CVITP related recommendations of the CRA’s own ombudsman, as contained in that office’s 2020 report on the CVITP as well as its most recent annual report.
At this stage, anything would be better than maintaining its silence on the only federal government initiative designed to help those living in poverty get the benefits to which they are entitled.
[i] While the Poverty Reduction Act does not specify which Minister of the federal Cabinet, the website of Employment and Social Development Canada (the Department tasked with coordinating follow-up on the 2018 Poverty Reduction Strategy) indicates that it is presently the Minister of Families, Children and Social Development.