September 5, 2024
This is the first article in a four-part series entitled The Evolution of the CVITP – 2023 Update. This article focuses on the impact of the CVITP on the clients it serves, using data published by the Canada Revenue Agency (CRA).[i]
Individuals Assisted
CRA CVITP webpage for statistics can be found here
* https://www.canada.ca/en/revenue-agency/news/2020/05/free-tax-clinics-go-virtual.html
The number of individuals assisted originally peaked in the 2019 tax season, prior to the COVID pandemic. The 2020 tax season was thrown into disarray with the introduction of COVID related restrictions that closed in-person clinics. Since then, the CVITP has slowly rebounded. It reached a new peak in the 2023 tax season.
The pilot grant project can probably take some of the credit for this result. Although the project is welcome, it has only resulted in a marginal increase over the peak reached in 2019 and it represents a cost that did not exist prior to the pandemic.
Returns Filed
CRA CVITP webpage for statistics can be found here
*Also called the ratio of returns filed to individuals assisted
** https://www.canada.ca/en/revenue-agency/news/2021/01/new-support-for-organizations-hosting-free-tax-clinics.html
The trend for returns filed largely matches that for individuals assisted. It originally peaked in the 2019 tax season before falling precipitously in the 2020 tax season. It has since rebounded reaching a new peak in the 2023 tax season which is only marginally higher than the figure reached in the 2019 tax season.
It can be safely assumed that the individuals served through the CVITP in any year were assisted in filing a return for the most recent tax year. The number of returns filed in excess of the number of individuals assisted signals the filing of prior year returns. These are returns that went unfiled prior to the most recent tax year. (Perhaps an individual failed to file for one prior year and got back up to date in the most recent tax season. In the extreme, chronic non-filers may get caught up by filing multiple prior year returns.)
By taking the ratio of the number of returns filed to the number of individuals assisted, one can derive the average number of returns filed per client.
In the 2023 tax season, the average number regained its 2020 peak of 1.15 returns filed per individual assisted. There could be several reasons for this. Notably, the pilot grant project started with the filing of 2020 returns in the 2021 tax season. Thereafter, with each tax season more prior returns are covered under the grant project, increasing the incentive for host organizations to file prior year returns.[ii]
If the grant program remains in place, we may see the average number of returns filed per client increase as host organizations make a greater effort to seek out chronic non-filers in order to file their returns for multiple years. We believe this would be a good thing.
Value Generated
Once again, the CRA has posted the data on the refunds, credits and benefits generated (or what we will call “value generated” purely for conciseness). As the main rationale for offering a CVITP clinic is not to help individuals pay income tax but rather to help them maintain access to many poverty-reducing benefits, this figure provides tangible evidence of the real value generated for CVITP clients.
**CRA presentation (see CVITP-2019-Stats.pdf (prospercanada.org))
CRA CVITP webpage for statistics can be found here
While the value generated has increased over time, this seems to reflect only the increases in the numbers of individuals assisted and the returns filed. There do not seem to be any significant increases in the average amounts of value generated per individual assisted or per return filed. Given that all the credits and benefits are adjusted annually for inflation, and this has been rising significantly in the last few years, it is a puzzle why these averages have not increased.
Which credits and benefits does the CRA include, and which does it exclude from the figures it provides? The CRA could help to solve this puzzle by giving more detail about the methodology it uses to arrive at the figure for refund, credit and benefit entitlements generated.
To read about the most recent trends in the numbers of volunteers and host organizations recruited and retained, see Part Two – Infrastructure Supporting CVITP Service Delivery.
[i] Prior to 2021, we used several CRA data sources as the CRA did not offer comprehensive CVITP data in any one publication. Recently, the CRA started providing data from 2021 onwards on its CVITP webpages. The new data uses a different annual time frame for collecting and reporting on the CVITP from the time frame the CRA previously used. This creates a discontinuity between the data we cited before 2021 and the new data. However, we do not believe the new data time frame creates a significant change in the trends observed. Therefore, we have replaced the old data we cited by the new data starting with the year 2021. (For more information, see Great CRA Innovations: Annual Data on CVITP Results.)
[ii] For example, in the 2023 tax season, the host organization could receive $15 ($5 per year) for assisting an individual to file their 2020, 2021 and 2022 returns (but nothing for any of the individual’s returns prior to 2020). Assuming the grant program remains in place beyond the pilot phase and the grant per return filed remains the same ($5), by 2030 a host organization could get as much as $50 for assisting an individual to file their returns for 2020 through 2029.