July 29, 2026
Summary
The article examines how the Canada Revenue Agency (CRA) could meaningfully link its work to the federal government’s poverty‑reduction target—cutting poverty in half by 2030 relative to 2015—despite criticism from the Office of the Auditor General (OAG). The OAG noted that although the CRA listed actions in its sustainable development strategy, it failed to demonstrate how these actions contribute to reducing poverty. This second section argues that such a link is both possible and defensible.
The federal poverty‑reduction target is based on an income measure, so any program that increases household income or subsidizes essential goods and services for low‑income households contributes to poverty reduction. Canada has developed an extensive, largely uncoordinated network of income‑tested benefits at the federal, provincial, territorial, and municipal levels.
These benefits fall into three broad categories: those automatically triggered by filing a tax return; those requiring an initial application but renewed automatically through tax filing; and those requiring a CRA Notice of Assessment (NOA) as proof of income. Filing a return—and obtaining an NOA—is therefore the essential gateway to accessing a wide range of income supports and subsidies.
The article emphasizes that this network is not widely understood. Policymakers, often middle‑class and unfamiliar with these programs, may not appreciate how crucial filing a return is for low‑income households. The CRA once published a list of the programs it administers, but discontinued it, leaving policymakers without a clear picture of the CRA’s central role.
While the CRA now publishes estimates of benefits generated through the CVITP—$2.6 billion in 2025—this covers only CRA‑administered benefits. It does not capture the much larger value of benefits triggered indirectly through tax filing or through NOA‑based eligibility.
The article argues that the CRA’s true contribution to poverty reduction lies not in designing benefits but in facilitating access to the tax‑filing system that unlocks them. Four CRA programs—CVITP, SimpleFile, deemed filing, and pre‑filled returns—are specifically designed to help low‑income individuals file returns. These programs could form the basis of measurable CRA actions aligned with the federal poverty‑reduction target. CVITP already uses income thresholds that approximate the poverty line, making the number of individuals served a reasonable proxy for the number of people living in poverty assisted in filing. SimpleFile uses clear income criteria for single individuals, though household criteria remain opaque. Deemed filing and pre‑filled returns will require transparent income thresholds to ensure they target people living in poverty.
To demonstrate meaningful support for the federal government’s target to cut poverty in half by 2030, the CRA would need to establish performance indicators for each program, set ambitious targets, support program expansion, and publish annual results. By increasing the number of low‑income individuals who successfully file returns—and thereby gain access to income‑tested benefits—the CRA could credibly show how its actions contribute to Canada’s 2030 poverty‑reduction goal.
In the first section of this second article, I described the actions the Canada Revenue Agency (CRA) identified in its sustainable development strategy in support of the Federal Sustainable Development Strategy’s target for reducing poverty in Canada by 2030. In addition to laying out the Office of the Auditor General or OAG’s observations about these actions, I noted that the OAG criticized the CRA for failing to show the link between these actions and the federal government’s target for reducing poverty in Canada.
In this second section, I answer the question: how could the CRA better link its work with the federal government’s poverty reduction target (as identified in its 2018 Poverty Reduction Strategy and its Sustainable Development Strategy for 2022-2026)?
Background
The starting point is the poverty reduction target: “By 2030, a 50% reduction in the rate of poverty, compared to the 2015 level”. The target uses an income-based measure of poverty. So, it is reasonable to assume that any programs providing additional income to households living in poverty contribute to reducing their poverty. This should also apply to any income subsidies provided to households living in poverty for the purchase of essential goods and services.
Canada has a complex network of benefits designed to provide additional income as well as income subsidies for essential goods and services to households living in poverty.
These income support programs and subsidies are generally income tested. This means that, to qualify for these benefits, the individual must first demonstrate that their income is low.
Typically, this is done in one of two ways.
The first is through filing an income tax and benefit return with the CRA, which demonstrates that the individual’s income is low, triggering the automatic payment of some benefits.
The second is indirect, by making the presentation of the CRA’s Notice of Assessment (NoA) a requirement, thus demonstrating to a third party that the individual’s income is low enough to qualify for a benefit not automatically triggered when filing the return.
What is not generally widely known is just how extensive this network of automatic and indirect income-tested benefits is in Canada.
- Some federal benefits are triggered automatically by filing the income tax and benefit return. The Canada Groceries and Essentials Benefit is an example of this.
- Others require an initial application. Once accepted, maintaining eligibility for the benefit requires the individual to remain current in filing their return. As long as the individual files the return and their income remains within the range for eligibility, the benefit is automatically triggered. The Canada Disability Benefit is an example of this.
- Still others are not triggered automatically. However, filing a return is a necessary first step as the NoA is used by the authority managing the benefit as proof of income for establishing eligibility. The Canadian Dental Care Plan is an example of this.[i]
- Some provincial and territorial benefits are triggered automatically by filing the income tax and benefit return. The CRA administers many of these on behalf of the provinces or territories. Others are managed directly by the provincial or territorial governments but are nevertheless triggered automatically by filing the income tax and benefit return.
- Still other provincial and territorial benefits are not triggered automatically. However, filing a return to obtain the NoA is essential as the latter is accepted by the authority managing the benefit as proof of income for establishing eligibility.
- Provincial and territorial benefits that fall into these categories typically include child benefits, childcare subsidies, income support, housing subsidies, drug programs, utilities subsidies, and, at the municipal level, public transit and property tax rebates as well as recreation program support.
While the CRA does not play any role in creating or designing any of these poverty reduction benefits, it manages some benefits like the Canada Child Benefit, and administers others on behalf of the provinces and territories.
This complex network of income-tested benefits was not created by policy design. It has grown by accretion over many years, as policy makers at the national, provincial, territorial and municipal levels created new income-tested benefits and chose the CRA’s existing infrastructure for processing the income tax and benefit return and its NoAs as points of entry.
Lack of public awareness
As most policymakers are from the middle class, they have not themselves been exposed to this complex network of income-tested benefits and subsidies, and are therefore unlikely to be aware of just how important filing a return and getting the NoA are for households living in poverty to gain access to these programs.
The CRA used to list the federal, provincial and territorial programs that it administers in its Departmental Results Report. Over time, the list became longer and longer. A decade ago, though, it stopped publishing that list.[ii] Why? It is not as though the CRA stopped administering these programs. Perhaps because it became too unwieldy to produce.
If so, this is unfortunate. The list used to give policymakers a sense of just how important filing a return and obtaining the NoA was for establishing eligibility and gaining access to income-tested benefits offered by government. Given that it was only the benefits administered by the CRA, it was far from comprehensive. But it gave an indication of the outsized role that filing a return and obtaining the NoA played in gaining access to benefits.
This complex network of income-tested benefits across Canada is not widely known or understood by the general public. The absence of any centralized list leaves policymakers in the dark as to the crucial role the CRA plays in helping low-income residents gain access to benefits aimed at reducing poverty and increasing income security.[iii]
Incomplete information on the results of income-tested programs
The CRA provides evidence suggestive of the impact of filing returns. Starting with 2021, the CRA publishes annual estimates of the benefits generated through the CVITP; in 2025, this was $2.6 billion. However, this only covers the amount for the benefits the CRA administers.
There is no equivalent estimate published of the amounts generated for:
- Income-tested financial support administered by other federal government departments, provincial or territorial governments which are automatically triggered by filing a return
- Income-tested financial support administered by the federal, provincial or territorial governments which require an application supported by a NoA
- Income-tested subsidies for the purchase of essential goods and services offered by provincial, territorial and municipal governments which depend upon the presentation of a NoA
These amounts likely run into many billions of dollars annually as well.
CRA’s contribution to poverty reduction
While the CRA did not design this network, it manages the point of entry – the system for processing income tax and benefit returns and issuing NoAs. By default, the CRA has become the gatekeeper for accessing the federal, provincial/territorial and municipal network of income-tested financial support and subsidies for essential goods and services.
The CRA’s contribution to poverty reduction is not the management of the system for filing income tax and benefit returns and issuing the associated NoA. It is the actions the CRA takes to facilitate access to this system by households living in poverty.
The CRA does not have any programs that target exclusively households living in poverty. But it does have several programs that are designed specifically to help low-income households file a return.
At present, it does this chiefly through the CVITP and SimpleFile. Two other programs, deemed filing and pre-filled returns, have yet to be tested and prove their worth.
These four programs could together form the basis of the actions the CRA monitors and reports on that aim to support the federal government’s target for poverty reduction. The CRA’s challenge will be to show that these programs improve the ability of a subset of low-income households, those living in poverty, to file a return.
The CVITP comes the closest to meeting this challenge. The CRA suggests income thresholds that can be used by CVITP host organizations for selecting the clients who will receive this free service. These thresholds do not perfectly match the official poverty line as the latter varies from region to region in Canada. But it is a close approximation.[iv]
Assuming host organizations make use of the CRA’s suggested income thresholds, the number of individuals served by the CVITP could be used as a proxy for the number of people living in poverty that are helped to file a return.[v]
The CRA publishes the income criterion it uses to determine eligibility to use SimpleFile; for a single individual, this is generally well below the poverty line in any region. However, unlike the CVITP, the CRA does not spell out the income limits for households greater than one person. This can create confusion for a couple where one has income below the threshold and the other’s income is above it.
And it remains to be seen whether the CRA will be transparent about the income criterion it plans to use to identify individuals for deemed filing and pre-filled returns. Will the income criterion for these two programs track the poverty line as closely as the CVITP does? Will it be reasonable to assume that those taking advantage of these programs to file a return generally fall below the poverty line?
Presently, the CRA publishes figures on the numbers of individuals assisted though the CVITP and SimpleFile. Will the CRA publish figures on the numbers of individuals assisted through deemed filing and pre-filled returns?
CRA support for SDG1
Assuming that the CRA wished to take this approach to monitoring and reporting on its contribution to poverty reduction, it would still need to make a convincing argument that the people served by deemed filing and pre-filled returns or at least the individuals that the CRA would count toward its poverty reduction targets were living in poverty in the relevant tax year. The CRA could then use these two programs, together with the CVITP and SimpleFile, as the basis for its support for poverty reduction.
To establish the performance indicators linked to each of the four programs, the CRA would take the number of individuals assisted in filing a return through the respective program. The starting point would be the number of people served through the respective program in the previous tax season. The target would be an increase in the number of people assisted through each program that cumulatively serves a growing proportion of all the individuals living in poverty in Canada.
This is unlikely to happen with the CRA’s current sustainable development strategy which covers the 2023-2027 period. But it could form the basis of its contribution toward the federal government’s poverty reduction target in its next sustainable development strategy, covering the year 2030, which is the year for achieving the federal target.[vi]
Conclusion
In the first section of this article, I reviewed the OAG’s observations about the actions the CRA identified in its sustainable development strategy in support of the Federal Sustainable Development Strategy’s target for reducing poverty in Canada by 2030. This included the OAG’s overall criticism that the CRA has failed to show the link between these actions and the goal of reducing poverty.
In the second section of this article, I have shown that the CRA could make a link between four programs it offers, including the CVITP, SimpleFile, deemed filing and pre-filled returns, and the federal government’s target for reducing poverty. These four programs aim to help low-income households file their returns and, as I have argued, filing a return and obtaining a notice of assessment are the keys to triggering the automatic payment of many income-tested benefits and to receiving a vast array of subsidies for essential goods and services. These income-tested benefits and subsidies help reduce income-based poverty, thereby contributing to the federal government’s overall poverty reduction target.
Assume the CRA recognizes that facilitating access to filing a return and obtaining the NoA are its main contributions to reducing poverty in Canada. Then the next steps the CRA would need to take to provide more convincing evidence of its support for the federal poverty reduction target include:
1Set ambitious targets for the CVITP, SimpleFile, deemed filing and pre-filled returns that cumulatively reach an increasing proportion of households living in poverty each year
2Provide the support the four programs need to achieve these targets
3Publish the targets and the results achieved annually for each of these four programs
The third and final article in this series will examine the CRA’s current plans for the CVITP.
[i] See this article for a list of the most well-known income-tested federal benefits which are either triggered automatically on filing a return or, following an application, require filing a return to maintain eligibility.
[ii] The last list I could find was in the CRA’s Departmental Results Report for 2016-2017. See “Benefit programs and benefit-related services delivered by the Canada Revenue Agency” under “Other Items of Interest” on this page.
[iii] Prosper Canada’s Benefits Wayfinder is not a centralized list of all the government benefits that can be accessed by filing a return and obtaining a notice of assessment. Instead, it is tool to help individuals find which income-tested benefits they are eligible to receive. But it comes about as close as one can get to a centralized list of such benefits.
[iv] I track data for one medium sized clinic which uses the CRA’s suggested income thresholds. Consistently over the last three years, 90% of the clients served by this clinic live below the official poverty line.
[v] In my annual update, I make this generous assumption. When comparing the numbers of individuals served with Statistics Canada’s estimates for the total number of people living in poverty in the corresponding years, I find that on average only a quarter of individuals living in poverty are helped to file their returns through the CVITP.
[vi] The draft of the Federal Sustainable Development Strategy for 2026-2029 represents a step back from the alignment with the UN SDGs and the Canadian Indicator Framework that was integral to the FSDD for 2022-2026. Furthermore, the implementation strategy, as currently envisaged, leaves more room for the CRA to do less than is presently the case for poverty reduction.