October 29, 2025
Summary: In the first article in this series, I showed that SimpleFile, the CRA’s service for transitioning to automatic tax filing, had very poor adoption rates in 2024 and 2025. In the second article, I noted that the CRA is consulting on using SimpleFile again in 2026 but with an important twist: participants who receive an invitation but do not file their return by a specified date will receive a pre-filled return prepared by the CRA. I then listed the ways that this could go wrong for the CRA and the low-income individuals they are attempting to serve.
On October 10, Prime Minister Carney announced that automatic tax filing for low-income Canadians will be rolled out on a large scale beginning in 2027. The CRA’s approach will likely build on the two-step process used in 2026 but the first step, the SimpleFile invitation, would probably be eliminated. Instead, during the 2027 tax season, eligible low-income individuals would simply receive their pre-filled return prepared by the CRA.
The purpose for introducing automatic tax filing was to help non-filers get the benefits to which they are entitled. The CRA’s implementation of SimpleFile in 2024 and 2025 did not fulfill this purpose. Its plans for 2026 and the large-scale rollout of automatic tax filing in 2027 will probably continue to focus primarily on shifting low-income Canadians who currently file – and get their benefits – toward a single method. By place greater reliance on its own technology to prepare and file returns, the CRA could cut out the intermediaries who have traditionally assisted these individuals. This includes the CVITP.
I have argued elsewhere that the government may see the rollout of automatic filing as a reason to wind down—or at least further underfund—the CVITP. If the government does this, I believe it would be a serious mistake. Because many CVITP clients struggle to understand CRA correspondence, it is likely that numerous recipients of pre‑filled returns—including many former CVITP clients—would require assistance before giving the CRA informed consent to file.
The CVITP is uniquely positioned to provide this support free of charge. It could play a vital complementary role in the CRA’s transition to automatic filing, but only if the agency invests in preparing and strengthening the program for this role.
In any event, the CVITP will remain essential in 2027 and beyond—for individuals ineligible to receive pre‑filled returns, those who do not inform the CRA of their current mailing address, and especially for non‑filers who need to catch up on filing for prior years.
In the first article of this series, I examined the performance of SimpleFile in 2024 and 2025. Marketed as automatic tax filing, the service has been largely avoided by low‑income residents who were invited to use it, with most choosing other filing methods.
In the second article of this series, I explained that the CRA is likely to use SimpleFile again in 2026, despite its poor adoption record. In 2026, the focus will be less on the service itself and more on the SimpleFile invitation. Recipients who do not file a return by the April 30th deadline would receive a pre‑filled return from the CRA. Once they consent, the CRA would file it. Yet many may withhold consent until they have obtained help from independent sources.
This final article examines the Prime Minister’s recent announcement of a large‑scale rollout of automatic tax filing for low‑income Canadians, beginning in 2027. It also considers how the CRA might draw on the CVITP to meet its implementation challenges.
An announcement welcomed by many
On October 10, the Prime Minister’s office announced that starting with the 2026 tax year, the CRA would “automatically file… taxes to ensure [low‑income Canadians] receive government benefits they qualify for.” The rollout is expected to reach up to 5.5 million people by 2029.
Three clarifications are important:
- The reference to the 2026 tax year means the measure begins in the 2027 tax season.
- It will be phased in over three years, with more households added each year.
- The phrase “up to” signals that the actual number could be lower.
The announcement received wide media coverage and was generally welcomed by social policy advocates. According to CBC reporting, the rollout would expand from 1 million people in 2027, to 2.5 million in 2028, and up to 5.5 million in 2029.
What does it mean in practice?
Because the announcement offered few details, its practical meaning remains unclear. Based on the 2026 approach the CRA is likely to use and described in the second article of this series, the agency would probably eliminate the SimpleFile invitation and instead send eligible individuals a pre‑filled return directly. (SimpleFile might still be an option for those who prefer not to use the pre-filled return.) Recipients might be required to respond by April 30th to avoid interruptions in benefits starting July 1st. This interpretation aligns with media reporting.
Three scenarios
Implementation will differ depending on several factors.
Scenario 1 – Benefit reform
Future changes could allow eligibility and the calculation of benefits and credits to be determined using information the CRA already has on file. This would remove the need for client input. In this scenario, the CRA could provide clients with pre‑filled returns that include estimated benefits and credits, where applicable. The client’s role would be limited to confirming their declared income and giving the CRA consent to file their return.
I judge the likelihood of this scenario by 2027 to be low. It would first require negotiations with provinces and territories that rely on the federal return to determine eligibility and the calculation of their own benefits and credits. (Quebec is the only exception.)
Scenario 2 – Filing without consent
The CRA could file returns for low‑income participants who neither respond to their pre‑filled return nor provide the CRA with consent to file. This approach might be considered if, in 2026, the CRA finds that many individuals fall into this category. It would allow the CRA to issue benefits that do not require additional client input.
I judge the likelihood of this scenario to also be low. The main reason is that filing without confirmation of income would expose the CRA to risks of undeclared income and potential tax evasion. But there are also two other considerations. Individuals whose returns were filed without consent could be frustrated or confused if they stopped receiving refunds or benefits they had previously obtained, without realizing those payments depended on their input. This approach could also result in a significant number of undelivered cheques to low‑income individuals who have not given the CRA direct deposit information nor their most recent mailing address.
Scenario 3 – Filing only with consent
The CRA would not file the returns for low‑income participants who neither respond to their pre‑filled return nor provide consent to file. This approach might be considered if, in 2026, the CRA finds that few individuals fall into this category and are missing out on benefits to which they are entitled. It could also be considered if many individuals fall into this category for the same reasons outlined in Scenario 2.
I judge this scenario to be the most likely. For the various reasons identified in the second article, most participants are likely to opt out, as they did from using SimpleFile in 2024 and 2025, by using other filing methods.
While the CRA might present the new pre-filled return process as a success, the reality is likely to mirror the SimpleFile experience: most low-income individuals will continue to prefer other filing methods they understand better, particularly those that provide benefit estimates, which remain their primary motivation for filing a return.
The role of the CVITP in an era of automatic tax filing
The CRA relies on two main programs to help low‑income Canadians file returns and access benefits: SimpleFile and the Community Volunteer Income Tax Program (CVITP). Unlike SimpleFile, first introduced in 2018 under another name, the CVITP has operated since 1971 and has proven highly effective. In 2024, it assisted 857,540 individuals to file their returns and is on track to surpass 900,000 in 2025—evidence of its enduring success.
When piloting SimpleFile in 2024 and 2025, the CRA made no use of the CVITP network to support its adoption. Recent government announcements on automatic filing likewise make no mention of the CVITP, reflecting the lack of any perceived link between the two programs.
But I have argued elsewhere the government may see the rollout of automatic filing as a reason to wind down—or at least further underfund—the CVITP. If the government were to do this, I believe it would be a serious mistake. Why?
CVITP as a traditional service provider
Many CVITP clients struggle to understand CRA correspondence. Their experience is not atypical. As I indicated above, the most likely scenario is one in which most recipients of pre-filled returns opt out, choosing instead other filing methods.
By 2026, close to 1 million low-income Canadians will be turning to the CVITP for assistance in filing their returns. If the CVITP remains a viable option for filing returns in 2027, many low-income Canadians will continue to use it to file their returns. On the other hand, a declining CVITP would have a negative impact on low-income access to benefits regardless of the availability of new automatic filing procedures.
CVITP as a partner fostering uptake of new procedures
Equally important, if the CRA wants strong adoption of its new automatic filing process in 2027, participants will need additional support, over and above the CRA documentation they receive. Without the CVITP, some participants might turn to commercial providers for this support, undermining the government’s stated goal of reducing filing costs for low‑income Canadians.
The CVITP is uniquely positioned to provide this support free of charge. Its 3,500 host organizations and 18,000 volunteers are embedded in communities across Canada and trusted by the people they serve. The CVITP could play a vital complementary role in the CRA’s transition to automatic filing, but only if the agency invests in preparing and strengthening the program for this role.
Regardless, the network will remain essential in 2027 and beyond—for individuals ineligible to receive pre‑filled returns, those who do not inform the CRA of their current mailing address, and especially for non‑filers who need to catch up on filing for prior years.
Conclusion
The original purpose for introducing automatic tax filing was to help non-filers get the benefits to which they are entitled. The CRA’s implementation of SimpleFile in 2024 and 2025 did not fulfill this purpose. Its likely plans for 2026 and the large-scale rollout of automatic tax filing in 2027 will continue to focus primarily on shifting low-income Canadians who currently file toward a single method.
If these plans are successful, the CRA will cut out the intermediaries who have traditionally assisted these individuals. The CRA will do this by placing greater reliance on its own technology to prepare and file returns. What could possibly go wrong?
I hope I have shown that there are many reasons to be sceptical about the success of this initiative. I would like to think that the CRA will rapidly realize it needs the CVITP to improve its chances of success and that it will take the necessary steps to strengthen the CVITP while preparing it for a supporting role in this endeavour. But I will remain sceptical about the transformative nature of the automatic tax filing initiative until I see evidence that the CRA has come to this realization.
Social policy advocates should also be cautious. As I hope to have shown through this series, most participants in the next phase of automatic filing are already receiving their benefits. Real improvements in benefit and credit take‑up will continue to come primarily through other filing methods and chiefly the CVITP. This community volunteer program will remain indispensable in helping non‑filers – who would only be eligible to receive a pre-filled return once they were more or less up to date in filing – to access the refunds, benefits, and credits to which they are entitled.