For hundreds of thousands of Canadians living on tight budgets, a single unfiled tax return can quietly cost them thousands of dollars in government benefits they never knew they were missing. Now, the federal government is moving to fix that and the country’s fiscal watchdog says the payoff could be significant.
The Parliamentary Budget Office (PBO) released a new report estimating that Ottawa’s plan to automatically file taxes for certain low-income Canadians could see eligible individuals receive an average of $2,212 in owed benefits for the 2025 tax year alone with that figure expected to climb in step with inflation in the years that follow.
Canada’s benefit system from support for workers and parents to supplements for low-income households is largely administered through the Canada Revenue Agency (CRA). The catch? Most of those benefits are tied directly to whether a person files their taxes. Miss a filing year, and you miss the cheque.
For many low-income Canadians, particularly those who don’t owe the government any money, filing taxes can feel pointless. But the consequences of not filing are quietly costly. Benefits go unclaimed. Families fall behind. And the government, despite having the data it needs to calculate what people are owed, sends nothing.
The 2025 federal budget introduced a plan to change that. Under the new framework, the CRA would automatically file tax returns on behalf of certain low-income individuals who haven’t been filing and offer pre-filled returns to others with straightforward tax situations.
The idea is simple: if the government already has your income and benefit information, why make you jump through hoops to access what you’re entitled to?
Parliamentary Budget Officer Annette Ryan put a price tag on the initiative in her office’s latest report. She estimates the program will result in the federal government paying out $342 million over five years, with administration costs of roughly $87 million leaving a net benefit to Canadians of around $255 million.
The PBO doesn’t expect the program to hit the ground running at full speed. Ryan’s office projects that automatic filings will begin in the next fiscal year for a modest 3,000 eligible Canadians, before the CRA scales the service up substantially reaching 50,000 individuals by the 2027 tax year.
That gradual ramp-up reflects the logistical challenge of identifying eligible non-filers, verifying their information, and ensuring accuracy before automating what has historically been an individual responsibility.
For those who qualify lapsed or long-time non-filers who don’t owe the CRA money the average benefit of $2,212 per year is not pocket change. For a single parent or a senior living on a fixed income, it could mean the difference between making rent and falling short.
The PBO’s analysis underscores a broader point: the gap between what low-income Canadians are entitled to and what they actually receive isn’t always a policy gap sometimes it’s a paperwork gap. Automatic filing is a direct attempt to close it.
Whether the CRA can deliver on the ambitious expansion timeline remains to be seen. But if the program rolls out as planned, tens of thousands of Canadians could soon find that filing their taxes or having them filed for them is finally worth something.
