Our website is focused on the link between the CVITP and poverty reduction.  The federal government’s first ever Poverty Reduction Strategy, introduced in 2018, set a target for reducing the poverty rate by 2020 by 20% from its 2015 level.  In March 2022, the Official Poverty Dashboard of Indicators maintained by Statistics Canada indicated that the poverty rate, which was 14.5% in 2014, had declined to 6.4% in 2020.  This is well in excess of a 20% reduction!

However, Statistics Canada recently released a paper which revised the poverty rate for 2020 to 8.1%.  This revision took into account the 2021 Census of Population figures.  While not as impressive as 6.4%, it still exceeds the target the government set for reducing poverty by 2020.

But this accomplishment is likely to be short-lived for two reasons.

First, 2020 saw the introduction of a large number of benefits to help people who had suffered loss of income due to COVID related lockdowns.  While not the intended objective, these benefits lowered income inequality as well as the proportion of the population living on low incomes.  While many of these supports were maintained in 2021, these income supports were largely withdrawn in 2022 as the economy opened back up.

Second, 2022 has also seen rising price inflation.  Price inflation disproportionately impacts those on low incomes, reducing their purchasing power, as people in this group live on fixed incomes or low wages which do not rise as fast as inflation.

Whether or not these two factors have led to an increase in the poverty rate will only be known in March 2024 when Statistics Canada releases its poverty data for 2022.  The implications for the CVITP will be evident more immediately as an increasing number of residents fall into poverty, becoming eligible to receive federal and provincial or territorial government benefits which are income tested.  Since the filing of a current income tax and benefit return is a condition for receiving many of these benefits, the federal government will be keen to facilitate filing.

But will the CVITP be ready to provide this service in the 2023 season to an expanding clientele?  The most recent figures for the CVITP show, at the very least, that the CRA will struggle to do this. Consequently, many low-income people who are eligible for this service in 2023 will likely have to turn to commercial return preparers to file in a timely manner.  Others will file late, risking interruptions in the flow of their benefits.

For more details, see our full article on this topic here.