Each year, the Canada Revenue Agency (CRA) suggests income limits that host organizations should use for the clients eligible to receive free tax preparation services through the CVITP. For example, the suggested income limits for the 2019 tax year (i.e. returns being prepared in 2020) are as follows:
| family size | total family income is under… |
|---|---|
| 1 person | $35,000 |
| 2 persons | $45,000 |
| 3 persons | $47,500 |
| 4 persons | $50,000 |
| 5 persons | $52,500 |
| More than 5 persons | $52,500 plus $2,500 for each additional person |
These numbers refer to the total family income for the tax year, not the anticipated income for the year in which the return is prepared. Otherwise, the tax situation of the individual must be a simple one with no income, or income from employment or a pension. The self-employed and those who have recently filed for bankruptcy are excluded from attending these clinics as their tax situation is deemed by the CRA to be more complex.
Here is what we know about the evolution of the numbers of clients receiving this service.
DP = Departmental Plan (published at the beginning of the fiscal year)
* planned (not actual)
** https://www.newswire.ca/news-releases/free-tax-clinics-go-virtual-830205481.html
*** Based on Statistics Canada T1 Family File, Final Estimates (2018)
What do the numbers tell us?
Given the few years that are reported on, the available numbers don’t really tell us very much. In the earlier years reported, the growth was slow. The number for the 2018 Tax Year represents strong growth. (This also coincides with the first year of a commitment by the government to increase funding to the CRA for the management of the CVITP.)
The CRA anticipates very strong growth in the numbers of clients attending CVITP tax clinics in the 2019 and 2020 Tax Years. We may not know the actual numbers for these years until sometime in 2021 and 2022.
The number for the 2019 Tax Year may not be realistic given the CVITP tax clinics had to close mid-March 2020, after only 15 days of operation, as provinces across the country introduced public health restrictions to contain the spread of the COVID-19 virus. When the provinces started to ease the restrictions, most host organizations which operate CVITP clinics only in March and April simply chose not to re-open their clinics. In May, the CRA announced the creation of “virtual” CVITP clinics but these were offered by a relatively small number of host organizations.
What is missing from the numbers?
Low-income Canadians are intended to be the target clients of the CVITP. But as the CRA does not give any information on the percentage of low-income Canadians being served through the CVITP, we are unable to determine the extent to which the CVITP is actually meeting the needs of this group.
Some cautionary notes about the numbers
Surprisingly, the CRA’s numbers on CVITP clients or “individuals assisted” have not always been a focus of the CRA’s reporting. Up until and including the 2018 tax year, the CRA tracked its performance based on the number of returns processed by the CVITP, not on the number of individuals assisted. (This explains why the number for 2018 is taken from a CRA news release announcing the opening of free virtual clinics to complete the 2019 tax season. The background notes to the release include the number of individuals assisted through the CVITP for the 2018 Tax Year.) Starting with the 2019 Tax Year, the CRA will be tracking its performance based on the number of individuals assisted.
There are a few other issues with these numbers:
2017 Tax Year: Footnote 6 on page 41 of the DRR for 17/18 fiscal year indicates that the number of individuals assisted in the 2017 Tax Year grew by 4.4% over the 2016 Tax Year. For this to be true, the figure for the 2016 Tax Year would need to be 673,815 individuals assisted; yet this number is not reported anywhere and contradicts the 702,965 reported for the 2016 Tax Year.
2019 Tax Year: Page 11 of the DP 19/20 states that the number of individuals assisted is expected to increase by 100,000 over the 2018 Tax Year. But this only makes sense if one uses the 2017 Tax Year figure given in the DRR 17/18, not the figure of individuals assisted reported for the 2018 Tax Year. Similarly, page 11 of the DP 19/20 states the number of individuals assisted will grow by 14% over the 2018 Tax Year. But this only makes sense if one uses the 2017 Tax Year figure given in the DRR 17/18, not the figure of individuals assisted reported for the 2018 Tax Year.
Read next about what has happened over the years with the returns filed by the CVITP in The Evolution of the CVITP – Returns.