Will Canada’s new automatic tax filing actually make your life easier?
For some Canadians, it may be welcome news that the Canada Revenue Agency (CRA) is launching automatic tax filing. However, one expert is advising people to manage their expectations.
In October, Prime Minister Mark Carney announced that the CRA is moving forward with its plans to expand its automated tax filing process to ensure that low-income Canadians receive the benefits they’re entitled to. This includes payments like the Canada Child Benefit and the GST/HST credit.
The automated and free process is expected to help millions of Canadians file their taxes. According to the federal budget, the measure would apply to the 2025 and subsequent tax years, which means filing could begin this year. The CRA plans to scale up this initiative to 5.5 million people for the 2028 tax year.
While this may sound promising, Gerry Vittoratos, national tax specialist at UFile Canada, says it’s an “interesting concept,” but he’s unsure if it will really make tax filing easier for many Canadians.
Automatic tax filing eligibility criteria
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According to the 2025 budget, to be eligible for automatic tax filing, Canadians must meet the following criteria:
- Your taxable income for the tax year is below the lower of either the federal basic personal amount or the provincial equivalent (plus the age amount and/or disability amount, where applicable)
- All of your income for the tax year is from an official CRA slip
- You didn’t file a return at least once in the preceding tax years
- You didn’t file a return for the tax year prior to, or within 90 days following, the tax filing deadline for the year
- Any other criteria as determined by the Minister of National Revenue
“It’s targeting a very small percentage of taxpayers,” Vittoratos told Daily Hive.
Based on the criteria, to be eligible, your income would have to be less than the federal basic amount, which was $16,129 for 2025. The provincial equivalent varies by province, but in Ontario, for example, it was $12,747 for 2025.
The measure would certainly help Canadians living in poverty, who make up 7.4 per cent of the population, or approximately 2.8 million people, according to the latest Statistics Canada data.
Vittoratos also highlighted that the requirement for all of your sources of income to be from an official CRA slip rules out anyone who is self-employed.
The catch
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“It’s a great concept because you would think, ‘Okay, well, I don’t have to do anything, and the government is going to turn around and just produce a tax return for me,'” explained Vittoratos.
However, he said there’s a catch.
“They can’t produce a return because there’s certain information that they don’t have in hand,” he said.
He gives the example of medical expenses that the CRA isn’t aware of because medical expenses are usually receipts, and they are not official slips from the government. Another example is donations, which are documents the government is not aware of.
The federal budget outlines how the process would work: before filing a return on behalf of an eligible individual, the CRA would provide that person with the information it has available for their tax return.
The person would then have 90 days to review the information and submit changes to the CRA.
“If the eligible individual does not confirm the information (with or without changes) by the end of the 90 days, the CRA could file a tax return on the individual’s behalf,” reads the budget. “The CRA would then issue a notice of assessment, and subsequently determine and issue the individual’s credit and benefit entitlements. ”
Vittoratos said it’s not as easy as it sounds, and there will still be some work needed to file your taxes through this system.
He said Canadians are better off filing their own taxes with other free programs. In fact, the CRA provides a list of certified, free tax filing options.
“Instead of doing the back and forth with the CRA, you can just do it yourself,” advised Vittoratos. “You go into the program, you plug in your information, you plug in your receipts and then just submit, and you’re not paying anything anyway.”
He acknowledged that the measure is helpful for vulnerable people who don’t file their returns, but still stressed that the necessary back-and-forth and waiting could be a hindrance.
“That person has to wait 90 days, and the government’s going to wait 90 days before they actually process the return,” Vittoratos explained. “In the meantime, you can file yourself, and within a week, you have your assessment.”
This measure is in addition to the CRA’s existing SimpleFile service.
With files from Irish Mae Silvestre