Filing taxes is becoming the key strategy for organizations looking to lift people out of poverty in this country. It's also a way to stimulate the economy in parts of the country in a downturn. The challenge is convincing low-income households to actually do their taxes, since that demographic has the lowest filing rate.
Families, in particular, are at risk of missing out on thousands of dollars of benefits and credits that are only accessed by completing a tax return.
A family of four with both kids under five and a working annual income of $40,000 qualifies for more than $13,000 in Alberta, which offers its own tax credits.
For poverty-reduction agencies, having poor people do their taxes is becoming the quickest way to help them get out of poverty. Government benefits are increasing, but without a tax return, you don't qualify.
Several not-for-profit groups offer free tax clinics to help low-income people with the paperwork, but many still don't get their taxes done. Exactly how many is difficult to pinpoint.
The Toronto Daily Bread Food Bank found in a 2005 survey that 25% of its users had not filed their taxes. Others suggest the rate could be lower.
The Canada Revenue Agency would not say how many families are not filing their taxes. Instead, the agency said it has issued more than 9.3 million Canada Child Benefit payments, totaling over $5.5 billion in the first three months of the program. The agency is on track to issue the $23 billion the federal government estimated for the first year of the program in the budget.
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