While this automated system won’t work for everyone’s taxes, especially those who owe taxes, eligible residents will get access to this service. It will ensure that you receive your government benefits on time, like the Canada Child Benefit or the Canada Groceries and Essentials Benefit, since your taxes do need to be filed to receive these.
Who are the 5.5 Million Canadians Predicted for these Benefits?
As this program begins, the federal government is looking to start with the 5.5 million Canadians who are considered to be low-income. This is anyone who makes under the low-income threshold of $16,129. This will start with some in 2026 as part of the pilot program, and then move up to the predicted 5.5 million Canadians by 2028.
Some of the key things the government will look for to determine who is going to use this service are:
- Students with part-time employment
- Seniors receiving Old Age Security and/or the Guaranteed Income Supplement
- Those who don’t file or have gaps in their filing history
- Those who receive social assistance
In order to identify who these people are, the government will use records that they already have access to. This includes previous filing history, T4 employment income slips, T4 pension slips and more. In the beginning stages, they’re going to be sending invitations to those whom they’ve narrowed down who will be a good fit for the program. This means they’re sending invitations to roughly 1.5 to 2 million people in order to start with SimpleFile by phone.
Automated Benefits that are Eligible through Auto-Filing
With the point of the automatic filing process being that those who qualify will automatically receive their benefits, it is important to note which benefits this will impact. Since this will differ for everyone, here are the main ones that should be seeing automatic renewal.
- Canada Disability Benefits
- Canada Groceries and Essentials Benefit
- Canada Child Benefit
- Provincial and Territorial Benefits
The idea behind this program is to get those who don’t file their income taxes the benefits that they’re entitled to. Many people don’t realize that you have to file your income taxes in Canada in order to receive your government benefits.
Choosing Not to Automatically FIle
Before any automatic filing is done, you will receive a notification via mail if you have been selected. You can respond to the notification and decline the invitation. Even after the filing has been done on your behalf, there is still a 90-day window for you to review your pre-filled information, make any changes, or opt out of the service altogether.
You can also just choose to have your taxes done another way before the filing deadline. You can do them yourself through a tax filing software, hire an accountant, or even just complete a paper return and send it to the CRA. This will stop the CRA from automatically filing your return.
Information that is Used to Autofile and How it’s Protected
Autofiling uses information already available in your My CRA Online Account. These include:
- T4 Employment Income Slips
- T3 Trust Slips
- T4A Pension Slips
- T4E Employment Insurance Slips
- T5008 Securities Slips
- T4RSP/T4RIF Slips
- Benefit and Credit information
- Carry forward amounts from previous years
- All previous NOA information
All of this information is already calculated for you and sent to the CRA as well as you. Many already use the CRA’s auto-fill feature to access this information and speed up the filing of their annual income tax return. The only difference between this and the auto file option is that you don’t have to process your tax forms yourself.
How SimpleFile and the Enhanced Auto-Filing System Differ
In Canada, SimpleFile is just the first step in launching the new enhanced auto-filing tax system. Instead of being completely automated, this service offers an interactive phone/digital service for low-income Canadians. It’ll start in 2027 for the 2026 tax year and is only available for simple tax situations that stay the same.
The SimpleFile system is set to help with the taxes of around 2 million Canadians in the first year and is considered to be a pilot project. For the 2027 tax year, the new automatic tax filing system is predicted to start and should be able to help around 5.5 million Canadians with their taxes.
The main difference between the SimpleFile process and the new enhanced auto filing system is that the new system gives the CRA legal authority to file your taxes. With the SimpleFile system, you have to give permission for the CRA to file on your behalf. With the SimpleFile system, only really basic tax returns will qualify. The more enhanced system allows for different variations of simple tax returns that even include tax credits.
Reasons to Consider Automated Tax Filing
With the new tax filing system coming into play, you can see your pre-filled tax return before it is submitted and make any necessary changes. If there are no changes, then your return will just be submitted. This gives eligible individuals, including young adults, access to financial support since they otherwise wouldn’t file to determine eligibility.
Since lowering costs isn’t always doable, offering more Canadians easier access to meet the eligibility requirements can help give them access to more funds. Simple tax situations can be set up with automatic filing, which many countries already do. Eligible people with digital services can also update their marital status at any time, see their GST/HST credit (Canada Groceries and Essentials Benefit) amounts, and even update their banking information.
With this program, you can still verify that your tax information is correct, and have a say in how your taxes are filed. However, many Canadians can still be hands-on in the process of filing their income tax returns while still getting the funds they need to afford the increased costs of living and feed their families healthy meals.
Final Thoughts
While historically in Canada, you’ve always had to do your own income tax return, that seems to be changing really quickly. Due to the fact that many Canadians are missing out on benefits that they’re eligible to receive, Prime Minister Mark Carney and the Prime Minister’s Office are looking to make those benefits easier to access. The simplest way to do that is to create automatic federal benefits by automating tax returns.
With the rising living costs, benefit payments can help many low-income Canadians stretch their money even further. Since many government benefits have certain income limits, especially for those who are low-income, you have to file tax returns to receive those benefits in your bank account.
