The release of Ottawa’s 2024 Fall Economic Statement on Monday was overshadowed by internal turmoil within the Liberal Party. But the statement includes some measures which could have important implications for Canadians, particularly low-income Canadians and caregivers.
Many of these measures would be achieved through tax changes.
The statement announces plans to introduce legislation to enable the Canada Revenue Agency to automatically file tax returns for some low-income Canadians. This change would start in the 2025 tax year.
This is a substantive announcement, says Jennifer Robson, a political management professor at Carleton University who has studied the impact of not filing taxes.
People who do not file taxes are not eligible for many government benefits, such as the HST/GST Benefit or the Canada Child Benefit.
About 10 to 12 per cent of Canadians do not file their taxes, according to a report co-authored by Robson. These Canadians are disproportionately low income.
Monday’s economic statement shows the government has “gotten the message,” Robson said.
“The [Fall Economic Statement] is really clear on the fact that this matters, that if people don’t file a tax return, they’re not eligible for a whole lot of benefits, federally and provincially.”
Robson, who is on an advisory council for the Canada Revenue Agency, says it is not completely accurate to call this proposal “automatic” tax filing.
Instead, the Canada Revenue Agency would be authorized to prepare tax returns for certain Canadians based on information the agency already has about them. If an individual did not respond to the tax return in a reasonable time, the return would be considered filed.
The Fall Economic Statement says the government wants to also enable the Canada Revenue Agency to file tax returns for middle class Canadians with simple tax situations.
Muted praise
The statement indicates plans to exempt the Canada Disability Benefit from income tax. The benefit is intended for working-age Canadians with disabilities who live in poverty. People are to begin receiving the benefit in July.
This is an important announcement, Robson says.
Eligibility for the benefit depends, in part, on income. Exempting it from income tax means the money people receive from the benefit will not make them ineligible to receive it in future years, Robson says.
Advocates for the benefit had muted praise.
“Although we appreciate the indication in the fall economic statement that the CDB will be tax exempt, the benefit amount is not enough,” said Rabia Khedr, national director of Disability Without Poverty, a group that lobbies for the benefit.
The maximum monthly amount of the benefit is $200, an amount many have criticized.
Disability Without Poverty is asking the government to triple the size of the benefit, Khedr says.
She also criticized the government for overlooking Canadians with disabilities in many of its measures intended to help with the cost-of-living crisis.
“That GST holiday is going to benefit people who can afford something to begin with,” she said. “Some disabled people might benefit from it. … But those are not the ones who are in deep poverty, because the ones in deep poverty are lining up at the food bank. They’re not going to a restaurant.”
Supporting caregivers
The Fall Economic Statement also contains some measures that could support caregivers.
Among them is the government’s plan to create a new refundable tax credit for personal support workers. The statement says this credit may be modelled after an existing tax credit for volunteer firefighters. That credit allows volunteer firefighters to claim $3,000 if they complete at least 200 hours of work as a volunteer firefighter.
“The proposed refundable tax credit for personal support workers is very good news for care providers across the country who work in high skill but low wage jobs,” said James Janeiro, director of policy and government outreach at the Canadian Centre for Caregiving Excellence in a statement. “This is a step towards proper recognition of care providers as critical parts of the care economy.”
The statement also says the government plans to provide low-interest loans for people adding secondary suites to their homes. These suites could be particularly helpful for people caring for aging parents.
This will “help many families support their loved ones closer to home,” Janeiro said.
Many of the measures in the Fall Economic Statement can only be created by passing legislation. Given the government’s current instability, it is unclear when that legislation will be introduced.
Robson says she could see cross-party support for introducing legislation to simplify tax filing or to exempt the Canada Disability Benefit from income tax.
“There’s actually a good case to say that the automatic tax filing should be one of the pieces that once the House resumes actually makes it into the omnibus legislation.”
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