July 1, 2026

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Summary

Although the government’s intention to offer some form of automatic tax filing was announced in the fall of 2020, this initiative has not yet been implemented. Government messaging over the years has led to some confusion about how the initiative will operate.

A recent CRA publication clarifies that there are two parts. The first, called “deemed filing” will be piloted this fall with 3,000 non-filers. The CRA will give them notice and, if the individual agrees or remains silent by the deadline, the CRA will file their return for them. In 2027, it plans to expand this number to 6,000 non-filers; in 2028 and 2029, it hopes to serve up to 50,000 non-filers through deemed filing.

The second part is more ambitious. In 2027, 1 million low-income residents with simple tax situations will be invited to review their pre-filled 2026 income tax and benefit return through their CRA account. By 2029, up to 5.5 million residents will have access to a pre-filled return. This assumes these individuals can access their CRA account, understand the pre-filled return, know what information may be lacking that needs to be provided to the CRA, and trust the CRA to prepare their return properly. That’s a tall order.

Deemed filing is unlikely to reach many vulnerable individuals who consistently do not file a return. And it remains to be seen if the rate of adoption for pre-filled returns will prove to be any better than for SimpleFile services.

Absent significant reforms aimed at simplifying the Canadian tax and benefit system, automatic tax filing is unlikely to significantly increase low-income households’ access to the benefits to which they are entitled.

This is the third section of the article entitled “Are Other CRA Programs Better At Helping Low-income Households File Their Returns?”

This is the CRA initiative that most people have probably heard about.  And while everyone seems to think they know what it means, the reality is quite different.  This is in part because federal government communications on this initiative have changed over time and remain confusing.

What is the government’s current thinking?  The clearest indication came in May 2026, when the government released the results of its consultations on automatic tax filing.  This document included a section on “Next Steps” that contains two separate initiatives which I deal with in turn below.[i]

1. Deemed filing

This initiative is intended to get benefits to those who have not filed their return.  Here is what the consultation document says about this initiative:

“In 2026, pending royal assent, the CRA will conduct a small, deemed filing pilot for eligible individuals with a lower income and simple tax situation. This will allow the CRA to implement deemed filing using limited criteria, to identify issues, and address challenges before a broader rollout.

“The CRA will send a notice to eligible individuals in their CRA account about deemed filing 90 days after the filing deadline. They will have 90 days from the date of the notice to take action (per Budget 2025 commitments). They must review their information. If any changes are necessary, they must opt out of deemed filing before the CRA files the return on their behalf and file their return on their own to access the credits and benefits they may be entitled to.“

How will this pilot work?  Those who have not filed by the end of July and are included in the pilot will receive a notice (90 days after the filing deadline of April 30) indicating they will have 90 days – until the end of October – to opt out of the process and file on their own.  Otherwise, the CRA will file their return on their behalf.

This initiative is intended to help low-income individuals who owe no taxes and may have forgotten to file their 2025 return to access the credits and benefits they may be entitled to and which are conditional upon filing their return.[ii]

How will the CRA communicate with these clients?  Presumably by postal mail.  The CRA is unlikely to send notices to chronic non-filers as the CRA may not even have a valid postal address on file for these clients and it may be quite unaware of their current income tax situation.  The CRA is most likely to limit the pilot to clients who have filed in previous years and for whom the CRA has ample information on file to confirm that their income tax situation has been and remains simple.

There are two risks in the case of those clients who do not contact the CRA to make changes or opt out of this process.  For the CRA, there is a small risk that some of these clients will not declare taxable income for which the CRA has no record on file (e.g. self-employment).  For the clients themselves, there is a large risk that they will lose out on some of the credits and benefits they are entitled to which are dependent on providing the CRA with information it does not have.  (Many provincial and territorial benefits and credits are of this type.)

It remains to be seen whether the CRA will communicate the results of this pilot before ramping up implementation in the 2027 tax season.  A recent study published by the Office of the Parliamentary Budget Officer indicates that the CRA plans to include 3,000 individuals in the pilot this fall and 6,000 individuals in 2027.  While the numbers thereafter are 50,000 per year, this suggests the impact of deemed filing will remain very small on low-income residents who have consistently failed to file a return.

2. Pre-filled returns

This second initiative is more ambitious.

“In March 2027, the CRA will offer a pre-filled return service for eligible individuals with low incomes within the CRA account. The pre-filled returns will reflect data the CRA has on file in real-time. Eligible individuals will have until the tax filing deadline on April 30, 2027, (a minimum of six weeks) to review their pre-filled return, make necessary changes, and respond to the CRA. By responding to the CRA, the individual will either deny or consent to the CRA filing the return based on the data provided.“

There are two parts to this initiative.  The first part is explicitly outlined above.

It is noteworthy that pre-filled returns will be made available only to those on low incomes who have previously received access to their CRA accounts online.  Those who have not requested access or who have been locked out of their accounts will not be eligible, at least initially.  Therefore, the CRA will communicate to eligible individuals by means of email.  These individuals will need to access their CRA account to review the pre-filled return.

The success of this initiative depends on several factors.

First, individuals will need to be able to access their CRA accounts.  My intuition is that low-income households are less likely than others to have requested access to their CRA accounts due to the costs (access to a laptop and an internet connection) and lower digital literacy (this is particularly true among seniors).  But even if they have gained access in the past, maintaining access is an issue due to lost passwords and locked accounts.

Second, individuals will need to easily understand the pre-filled return.  This cannot be assumed as CRA written communications can be confusing for many clients.

Third, individuals will need to know what additional information the CRA needs but does not have on file to complete the return.  Again, this cannot be assumed as the tax code is fiendishly complicated.  Many individuals are unaware of the various credits and benefits they are entitled to which require them to provide additional information.  (This is often why they consult with a third party on the preparation of their return.)

And fourth, because of the two foregoing points, much of the success of this initiative will rest on the trust these have people have in the CRA.  Yet trust in government and the CRA in particular is poor among many low-income households.  And given its recent poor record of providing timely and accurate information to taxpayers, its reputation may, at present, be suffering among taxpayers more generally.

As a result, some recipients of pre-filled returns may still opt to file using other methods, such as paying a professional or asking a CVITP volunteer to prepare their return.  Just as with SimpleFile services, the adoption rate will be the real test of the effectiveness of this initiative.

As this is only open to low-income individuals with access to their CRA account, a history of filing returns which establish they have a simple tax situation, and a willingness to trust the CRA, I suspect that this is unlikely to be used, at least initially, by many individuals.  Nevertheless, this is the basis for the Prime Minister’s October 2025 statement that this initiative “will reach up to 5.5 million low-income Canadians by the 2028 tax year.”  Just as we have seen with SimpleFile services, many will be invited but few may accept the invitation.

But there is also a second part to this initiative that is not made explicit in current CRA statements.  What happens to the pre- filled returns of eligible individuals who do not respond to the CRA by the April 30^th deadline?  No information is given.  However, it is conceivable that, after that date, their situation could be similarly to that of individuals eligible for deemed filing.  I suspect that this will be made clear in advance of the 2027 tax season.

Reduced expectations

Laurin of the C.D.Howe Institute identifies two goals driving the government’s attempts to promote automatic tax filing: reducing costs for those who do file and reaching vulnerable individuals who don’t file.

The expansion in the availability of pre-filled returns may reduce the cost of filing a return for some low-income households that are otherwise dependent on commercial options.

But deemed filing is unlikely to reach many vulnerable individuals who consistently do not file.

Absent significant reforms aimed at simplifying the Canadian tax and benefit system, automatic tax filing is unlikely to significantly increase low-income households’ access to the benefits to which they are entitled.  The CRA’s own Ombudsman seems to agree.

Read Conclusion – Answering The Initial Question

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[i] These two initiatives are also confirmed toward the end of a CRA press release issued early in May 2026.

[ii]Royal assent is required because changes need to be made to the Income Tax Act stipulating the specific conditions under which the CRA is allowed to file a return of an individual without their explicit consent.