Canada’s Auto Tax Filing Plan Promises $2,000+ to Low-Income Earners, but at a Price

For thousands of Canadians who have never filed a tax return or simply stopped trying help may soon arrive in the mail. A new federal program will have the Canada Revenue Agency (CRA) do the filing for them. The catch? It comes with a price tag that taxpayers will foot, and the rollout, at least initially, is modest.

The Parliamentary Budget Officer (PBO) released a report this week laying out what the federal government’s automatic tax filing program will actually cost and who stands to gain the most from it.

The idea is straightforward enough: the CRA will prepare pre-filled tax returns for Canadians who have a history of filing and whose financial situations are relatively uncomplicated. The program targets mostly lower-income individuals who, despite qualifying for federal benefit payments, never see that money because they haven’t filed a return.

Prime Minister Mark Carney first announced the initiative in October, framing it as a practical step toward getting financial support into the hands of those who need it most. Without a filed return on record, the government simply has no mechanism to issue benefits regardless of how eligible someone may be.

Those benefits include the newly introduced Canada Groceries and Essentials Benefit, which replaces the former GST/HST credit, along with the Canada Child Benefit and the Canada Disability Benefit. For households living below the income thresholds required to qualify, missing these payments can mean a meaningful financial shortfall year after year.

According to the PBO’s projections, Canadians who benefit from automatic filing can expect to receive an average of $2,212 for the 2025 tax year. That figure is expected to grow gradually, reaching approximately $2,391 by the 2029 filing year reflecting both benefit increases and a broader eligible population over time.

The program won’t reach full stride immediately. In its first year, the CRA anticipates filing roughly 3,000 returns automatically. That number is projected to climb sharply, hitting 50,000 by 2027 as the agency scales up its capacity.

As for what it will cost the government to run all of this, the PBO estimates total spending will reach $429 million over five years a figure that includes both the administrative overhead of building and operating the system and the actual benefit payments that flow to newly enrolled recipients. Administrative costs alone are expected to be $22 million in the first year and $87 million cumulatively over five years.

The program’s announcement has prompted broader conversations about who should be eligible in the first place.

Just days before the PBO report dropped, the Taxpayers’ Ombudsperson released a separate assessment of the CRA with its own set of recommendations. Among them: expand the automatic filing program well beyond low-income Canadians to cover anyone whose tax situation qualifies as “simple” regardless of how much money they make.

The ombudsperson’s position reflects a growing view that the benefits of automated filing reduced stress, fewer errors, better uptake of entitlements shouldn’t be reserved only for those at the lower end of the income scale.

Whether the government moves in that direction remains to be seen. For now, the program as designed is a targeted intervention, built around the premise that the Canadians most likely to miss out on benefits they’re owed are also the ones least likely to navigate the tax system on their own.