Taxpayer Rights in the Digital Age: The benefits and risks of digitalization for vulnerable populations in the Canadian income tax context

Office of the Taxpayers’ Ombudsman 1000-171 Slater Street
Ottawa, Ontario   K1P 5H7 | Telephone: 613-946-2310 | Toll-free: 1-866-586-3839
Fax: 613-941-6319 | Toll-free fax: 1-866-586-3855

© Minister of Public Services and Procurement Canada 2020

Cat. No.: Rv10-21/2020E-PDF
ISSN: 978-0-660-35107-0

May 2020

This publication is available in electronic format at canada.ca/en/taxpayers-ombudsman

Introduction

In the context of taxpayer rights, what does it mean for a tax revenue agency to set the goal of making those who interact with it “feel like valued clients, not just taxpayers”Footnote 1 ? To declare a goal of improving service to Canadian taxpayers is laudable, and if successful, will likely bring many improvements to the average Canadian’s interaction with its tax and benefit administration, the Canada Revenue Agency (CRA). In Canada, the Taxpayer Bill of RightsFootnote 2 outlines the rights that apply to us specifically as taxpayers, not simply as clients of an agency that processes our income tax and benefit returns and administers our benefits. How will this shift in the CRA’s organizational identity, and its related focus on improving digital services,Footnote 3 affect the taxpayer rights of vulnerable populations in Canada?

Taxpayer

The term “taxpayer” includes any person who interacts with the CRA, whether or not they are liable to pay tax. This could include any individual, business, corporation, charity, or other legal entity that is subject to Canadian tax statues, eligible to receive an amount as a benefit, or provided a service by the CRA.

Among other rights, taxpayers in Canada have the right to receive entitlements and to pay no more and no less than what is required by law; the right to be treated professionally, courteously and fairly; the right to complete, accurate, clear, and timely information; the right to have the costs of compliance taken into account when the CRA administers tax legislation; and the right to be represented by a person of their choice.Footnote 4 The CRA’s digital delivery of services impacts all of these rights.

This paper explores the intersection of digital innovation, digital services,Footnote 5 access, and taxpayer rights in the Canadian context, in light of the experiences of vulnerable populations in Canada, from the perspective of the Taxpayers’ Ombudsman. Many aspects of the CRA’s digitalization can further marginalize vulnerable populations but there are also opportunities for digital services to help vulnerable persons in accessing the CRA’s services. 

The position of Taxpayers’ Ombudsman was created in 2007, by Order in Council,Footnote 6 as a special adviser to the Minister of National Revenue (Minister). The mandate of the Taxpayers’ Ombudsman is “to assist, advise and inform the Minister about any matter relating to services provided to a taxpayer by the [CRA]”.Footnote 7 This includes examining and resolving complaints filed with the Office of the Taxpayers’ Ombudsman on a service matter affecting a particular taxpayer, and examining systemic issues and making recommendations to the Minister. The Taxpayers’ Ombudsman operates under the guiding principles of independence, objectivity, fairness, and confidentiality.Footnote 8 

As a result of this mandate, the Taxpayers’ Ombudsman interacts with many members of vulnerable populations and organizations who assist vulnerable persons. We define “vulnerable populations” as a collection of diverse individuals who are disadvantaged and/or marginalized in some way. This could be due to socio-economic factors, living situations, or difficulties accessing government services. In the present context, vulnerable populations may include:

The Government of Canada’s approach to digitalization

The Government of Canada recognizes the importance of digital services to Canadians and the expectation for “…information to be at their fingertips, available instantly, from any device and at any time.”Footnote 9 The Government of Canada wants to create “An online experience so easy, users choose the digital channel.”Footnote 10 

The Government of Canada’s vision is that it is:

an open and service-oriented organization that operates and delivers programs and services… in simple, modern and effective ways that are optimized for digital and available anytime, anywhere and from any device. Digitally, the Government of Canada must operate as one to benefit all Canadians.Footnote 11 

With the goal to achieve a digital Canadian government, the Strategic Plan of the Treasury Board Secretariat (TBS) of the Government of Canada outlines six themes to support this goal:

The TBS states that digital first does not mean digital only, but that “digital service delivery cannot be an afterthought and, importantly, in-person and telephone interactions must be digitally enabled to deliver excellence in service.”Footnote 13  Encouragingly, the TBS acknowledges that often people still want to speak with a live person when they have questions or are experiencing difficulties and therefore traditional service delivery approaches have not been fully replaced.Footnote 14 

In September 2018, the Government of Canada outlined ten digital standards to guide the government’s development of policy, programs, and services,Footnote 15 intended to change as requiredFootnote 16 . Two of these standards contain descriptions regarding ensuring “everyone receives fair treatment” and the need to “collect data from users only once and reuse wherever possible.”Footnote 17 Both of these are important for vulnerable populations, especially in the context of tax administration.

Collecting and reusing information will assist many vulnerable persons who often have difficulty obtaining and retaining documentation. It can be problematic and costly to be repeatedly required to provide the same documentation to different government departments and agencies, or even different areas within one department or agency, such as the CRA.

The Government of Canada’s goal of creating a single window for people to access Government of Canada information, and integrating service delivery, both across and within government departments and agencies,Footnote 18 can make accessing government information and services easier for vulnerable persons. However, this must be done with more than just digital services.

The Government of Canada’s Canadian Digital Service (CDS)Footnote 19 prepared a preliminary roadmap to outline how the Government of Canada could work towards delivering all of its public-facing services digitally by 2025.Footnote 20 

It is clear the Government of Canada is focusing on and strongly encouraging people to use digital services. While this make sense for those who are comfortable with and have access to digital services, it is important these strategies and plans do not further marginalize already vulnerable populations. There is some indication this is being kept in mind.

A lot of the statements and terminology used in the Digital Operations Strategic Plan appear encouraging in minimizing the risks of digitalization for vulnerable populations. For example, “user-focused design,” “user-centred methods,” and “user experience design”Footnote 21 are important. The TBS Policy on Service and Digital also states it focuses on the user, ensures proactive consideration of service needs at the design stage, and takes an integrated approach.Footnote 22 One of the requirements is to ensure “the development and delivery of client-centric service by design, including access, inclusion, accessibility, security, privacy, simplicity, and choice of official language.”Footnote 23 

However, these terms and the bulk of the content of the documents reviewed here appear to assume connectivity, knowledge, and access. For example, research with users of digital services in mind is promoted; however, there is less consideration of how to empower more users. The Government of Canada’s plans and strategies on digital services do not adequately address the importance of basic access to digital services for vulnerable and marginalized persons.

The CRA’s approach to digital services

The CRA is following the Government of Canada’s approach to digital services. In the CRA’s 2019-20 Departmental Plan, the Commissioner of the CRA (Commissioner) stated:

The CRA will sustain its leadership role within the Government of Canada in digital service transformation. As we add more digital services for Canadians to use, the Agency will focus on citizen engagement to better understand what they need.Footnote 24 

The 2019 mandate letter of the Minister of National Revenue, from the Prime Minister of Canada, speaks to “better digital capacity and services for Canadians.”Footnote 25 The Prime Minister tasks the Minister with ensuring the CRA supports more Canadians who wish to file their returns without paper forms, and working with the Minister of Digital Government to “meaningfully improve the satisfaction of Canadians with the quality, timeliness and accuracy of services they receive from the CRA.”Footnote 26 

Over the last several years, the CRA has embarked on a self-described, intentional shift, both in its internal culture and in its treatment of taxpayers, towards a client-centric approach, in response to the Government of Canada’s goal of ensuring the CRA is “fairer, more helpful, and easier to use.”Footnote 27 The appointment of a Chief Service Officer in March 2018 cemented this new approach. A senior CRA executive was charged with “leading the Agency’s service transformation agenda with an integrated, client-focused approach.”Footnote 28 The CRA states that in doing so, it “stands among other public and private-sector organizations that are committed to the pursuit of excellence in client experience.”Footnote 29 Two facets of this new client-centric approach are a focus on the digital experience of taxpayers and the use of customer experience (CX) or user experience (UX) methodology to overhaul its service model.Footnote 30 

In his message in the CRA’s 2020-21 Departmental Plan, the Commissioner reflects this desire to meet public expectations regarding digital services.

More and more, the public expects government institutions to adapt to change quickly and efficiently, often by adopting the latest in technology. We will adopt new approaches, technological tools and processes to take advantage of increasingly sophisticated analytics and respond to evolving client expectations.Footnote 31 

In his earlier message in the CRA’s 2018-19 Departmental Plan, the Commissioner indicated the CRA is responding to the trend of Canadians “increasingly spending more time on smartphones and tablets and less time on personal computers.”Footnote 32 The CRA is committed to ensuring the quality of its digital services, regardless of the device used to access those services.Footnote 33 And, “in keeping with the Government of Canada’s policy of digital first,” the CRA reported in its 2018-19 Departmental Results report that it is “enhancing its digital services to make them increasingly available anytime, anywhere and on any device.”Footnote 34 

The CRA created a Digital Services Modernization Strategy to “provide Canadians with a world-class service experience that is focused on the user, is secure, and digital from end-to-end.”Footnote 35 In its 2019-20 Departmental Plan, the CRA states this “has long been the CRA’s goal” and it is continuing to add and improve digital services.Footnote 36 

The Commissioner has recognized not everyone has access to digital devicesFootnote 37 and can benefit from a focus on digital services, and that the needs of vulnerable populations must be specifically considered.

For those who may have unique needs, like seniors, first-time filers and newcomers, we will continue to develop tailored and proactive support to help them apply for the benefits they are eligible for, claim available deductions, and meet their tax obligations.Footnote 38 

The Commissioner has stated “In addition to our online service options, we will improve the available alternatives for those who choose to use them, so no one gets left behind”[39] and the CRA has committed to providing “a seamless and consistent service experience across all service channels”Footnote 40 .

However, the CRA has not simply been responding to the desires of those it serves. It has also been actively “promoting use of online services … as an alternative to calling the CRA, reducing use of paper forms…”Footnote 41 There is therefore a tension between what the CRA states regarding its commitment to serving vulnerable populations and its desire to lead in the Government of Canada’s digital transformation.

Barriers to accessing digital services

A risk of the digitalization of information and services are the barriers it can create.

The CRA is not only a federal tax collection agency. It administers personal income taxes for all territories and provinces except one. It also administers at least 135 social and economic benefit, credit, incentive, and other programs for the federal government and for the provincial and territorial governments of Canada. The CRA also collects debts in a number of areas one would not immediately associate with a tax revenue agency. Given this, and the fact that Canada has a self-reporting tax system, there is an obligation on the CRA to ensure services exist to help people file their returns, and access benefits, credits and other programs the CRA administers.Footnote 42 

There are many barriers to accessing CRA’s services and to filing a return. Filing a return is required to access the benefits, credits and other programs administered by the CRA. Therefore, barriers to filing a return are also barriers to accessing these programs.

With the difficulties vulnerable populations have in accessing government services generally, the push to digitalization and digital services can be problematic, sometimes further marginalizing these populations. This can be due to a number of factors, including:

In two surveys conducted by Prosper Canada (one of financial empowerment experts, and one of persons with low income), the most cited barriers to filing a return, for low-income Canadians were:

The CRA also researched barriers to filing a return and accessing the CRA’s services, with respect to vulnerable populations generally, and specifically regarding newcomers to Canada and those who are housing insecure. This research highlights similar barriers and noted that those living in northern Canada experience a more pronounced effect of barriers to completing their return, given there are few options to assist filers, none of which were free of charge. Barriers identified include:

The CRA’s research also identified that:

A general lack of awareness and lack of knowledge is compounded by a lack of preparedness. Many feel as though they have missed an opportunity to claim benefits that are owing to them. This creates heightened frustration toward the government with some thinking the government’s lack of assistance is intentional to minimize payment of eligible benefits.Footnote 46 

The CRA’s research reflected many reasons why someone who is homeless or housing insecure may not file their return or may do so inconsistently:

Contributing factors included: fear or stress related to one's financial situation and worries that filing taxes may result in debt; avoidance of an existing debt with the CRA; a negative perception of the tax system, the CRA, or the government generally; challenges with tracking deadlines and with obtaining and keeping financial documents; and lack of necessary identification. Two factors that stood out during interviews as particularly salient were that, first, some individuals did not realize that they stood to benefit from filing, and second, the immediate concerns of day-to-day life were so pressing for some that tasks requiring advance planning and organization, such as filing taxes, become deprioritized.Footnote 47 

The CRA’s authentication or verification of identity requirements affects all vulnerable populations, not just those who are homeless or housing-insecure, and it is an issue I have long tried to address with the CRA. In my report “Reaching Out”,Footnote 48 on improving the CRA’s Community Volunteer Income Tax Program, an entire section is dedicated to “Barriers in the CRA’s authentication and authorization processes,” where I made recommendations to the Minister of National Revenue on improvements that could be made to this process. These barriers negatively impact people’s ability to access the CRA’s services. The CRA must balance the legal requirements, policies and procedures put in place to protect taxpayer information, in the digital context, against the actual risk, the barriers to access they create, and the expectations and needs of taxpayers generally. It is the most vulnerable individuals who most frequently face barriers because of these requirements.

Examples of barriers in the CRA’s requirements for verifying one’s identity include:

The challenge of obtaining and storing documents necessary to file one’s return also contributes to difficulties in verifying one’s identity.Footnote 50 This is especially true for those who are homeless or housing insecure. The CRA’s research states: 

Shelter environments are not conducive to keeping one's financial documents organized. Many participants reported having lost documents … For those who have had many temporary residences or who have had to flee negative circumstances, it may not be easy or even possible to bring their important documents with them.Footnote 51 

It is easy to see how the CRA’s push towards digital services can add to and exacerbate many of the identified barriers. Research conducted by the CRA has found that the CRA’s push to digitalization also creates barriers:

Like many other federal government organizations, the CRA has in recent years expanded its online services and encouraged users to take up those services. This includes a shift to online tax filing, the introduction of an online platform for managing tax affairs and receiving correspondence from the CRA, and a transition to online forms of communication and service delivery. While these changes have been largely successful in simplifying the way that many Canadians interact with the CRA, for others this shift has created new barriers to accessing information and benefits.Footnote 52 

In public opinion research conducted by the CRA on modernizing its correspondence, participants compared new CRA correspondence with the previous version. The results found:

The current versions are perceived to encourage going online: With respect to the current versions of the correspondence, some participants observed that there are multiple references to going online, and sometimes the same website is referred to more than once. This is perceived to have the general effect of encouraging the reader to go online at the CRA website for information or service.Footnote 53 

This approach, to someone who does not have online access or the required level of knowledge for such access, can put up additional barriers in communicating with the CRA. The CRA, and the Government of Canada generally, have a responsibility not only to ensure their strategies do not create barriers, but also to reduce barriers to services wherever possible.

In additional public opinion research conducted by the CRA, it sought to learn why filers choose a particular method of filing their returns. The CRA collected information regarding, amongst other things, barriers to filing electronically and what could help Canadians move to filing electronically.Footnote 54 

The research found mixed results in whether the participants would be open to changing to filing electronically in the future, with 59% reluctant or somewhat reluctant to file electronically. Participants identified the three top reasons or barriers to switching to electronic filing as: they were used to filing their returns on paper (60% ranked as a major reason), they enjoyed filing their returns on paper (52%), and they wanted to “keep control” over what was included in their returns (50%).Footnote 55 

The rest of the list of barriers identified offer a better view of the barriers that are more likely to affect vulnerable persons:

These barriers could be categorized as security of information, access, and knowledge. Below I will explore access and knowledge in more detail as they are significant barriers to accessing digital services.

Connectivity issues in Canada

There are many areas and communities in Canada where Internet access is limited, unreliable, insufficient, or non-existent. Getting online is just the first challenge. The quality and speed of Internet access must also be sufficient to use digital services.

Canada is a country with a large landmass and an unevenly distributed population. The population density of Canada is approximately four people per square kilometre.Footnote 57 There are many rural and even very remote areas in Canada that are populated but sparsely, especially in the northern and central areas of Canada.

Canada’s population is concentrated in several areas. The majority of the population lives within 160 km of the border with the United States. The most densely populated area of the country is eastern Canada, extending from just east of Windsor to the Maritime Provinces, and includes the major cities of Toronto, Ottawa and Montreal. The second most densely populated region begins in Winnipeg and extends west to the Canadian Rockies. Even along the Canada-US border, in between these two regions, Canada is sparsely populated.Footnote 58 

When the lack of uniformity in population across Canada is coupled with diverse weather conditions, especially some very harsh and unpredictable conditions in the north, some very remote areas, and higher costs for telecommunications companies to provide service in many areas, Canadians do not experience uniform access to digital services.

The density of population is a factor in the services provided by Internet service providers across Canada. In large metropolitan areas, there is competition for customers, and therefore more service options and better services. Statistics Canada defines rural as being “the population outside settlements with 1,000 or more population with a population density of 400 or more inhabitants per square kilometre.”Footnote 59 According to 2016 census data, 16.8% of Canada’s population lived in rural areas.Footnote 60 

According to the Canadian Internet Registration Authority, average upload and download speeds in Canada are improving but rural areas still lag behind urban areas. In 2019, the average upload and download speeds for people living in an urban area were 22.33 Megabits per second (Mbps) and 51.8 Mbps respectively; while in rural areas, upload and download speeds averaged only 7.62 Mbps and 19.52 Mbps respectively.Footnote 61 

The Canadian Radio-television and Telecommunications Commission (CRTC) has set target minimum upload and download speeds of 10 Mbps and 50 Mbps respectively, recognizing that “a well-developed broadband infrastructure is essential for Canadians to participate in the digital economy.”Footnote 62 Most of Canada does not have this level of coverage, with the areas having such coverage very closely matching the more populated areas of Canada.Footnote 63 Much of the rural and remote areas of Canada either do not have Internet access or they are dependent upon satellite Internet access, with the more northern areas of Canada entirely satellite dependent.Footnote 64 Satellite Internet service is very susceptible to weather interruption. Of all the Internet delivery mechanisms, it is the least reliable, the slowest, and the least affordable.Footnote 65  

In his 2018 report, “Connectivity in Rural and Remote Areas,” the late Auditor General of Canada noted that “accessibility to broadband high-speed Internet continues to lag behind for certain population groups in Canada, notably communities in rural and remote areas” and as a result, “people in these areas have less access to important online services, such as education, banking, and health care.”Footnote 66 

Equally important is the need for Canadians to access the CRA’s information and services as the CRA has been shifting more and more to an online presence and digital interfaces for tax and benefit information and filing. Access to CRA’s services is very important, especially when speaking of the access to credits, benefits, deductions etc. this can provide.

There are federal government programs aimed at increasing Canadians’ access to reliable high-speed Internet. For example, the Connecting Canadians program “supports private investment to extend and enhance broadband service in areas where low population density would otherwise make this uneconomical.”Footnote 67 This program defines high speed Internet as 5 Mbps and had a target of connecting 300,000 households by 2019. It invested $50 million in the north with the goal of improving satellite capacity and bringing service of at least 3 Mbps to approximately 12,000 households in Nunavut and the Nunavik region of Quebec.Footnote 68 In Budget 2016, the Government of Canada announced an investment of up to $500 million by 2021 in the Connect to Innovate program, with the goal of bringing high-speed Internet to 300 rural and remote communities across Canada.Footnote 69 

But the Auditor General of Canada found that the Government of Canada generally, and the Department of Innovation, Science and Economic Development Canada specifically, needs to do a lot more to ensure adequate connectivity for Canadians. For example, he pointed out:

In 2018, the Department publicly endorsed the minimum service speed target of 50/10 Mbps, but only for 90% of Canada’s population. It believed that the private sector and current government funding programs could achieve that level. In 2016, 84% of Canadians already had access to Internet speeds of 50/10 Mbps. The Department expected 90% would have access to these speeds by 2020. However, this left out 10% of the population: 3.7 million Canadians living in rural and remote areas. For them, the government had no plan to deliver speeds greater than 5/1 Mbps. The government expected that current and future public- and private-sector initiatives would improve access for those Canadians, although progress might be uneven across the country.Footnote 70 

The Auditor General made numerous recommendations in his report “Connectivity in Rural and Remote Areas,” all of which were accepted by the Government of Canada. He recommended greater, more reliable and more affordable Internet access. He called for a comprehensive strategy to determine the “minimum level of reliable and high-quality Internet service”, timelines to achieve it, resourcing and cost-efficiency, and follow up to determine if improved access leads to the adoption of the Internet services. He recommended minimizing the negative impact of public spending on existing Internet service providers. He also recommended more information be made available to users on things such as the availability, capacity, and cost of Internet service across Canada. He called for a change in how the government auctions spectrums, and to get information from rural and remote stakeholders, to allow better and more affordable Internet coverage in rural and remote areas.Footnote 71 

In Budget 2019, the Government of Canada made a commitment to ensure 95% of Canadian homes and businesses have access to a minimum of 10 Mbps upload and 50 Mbps download speeds by 2026 and 100% by 2030.Footnote 72 

However, having access to Internet with these speeds simply means it exists in those areas. Access to reliable high-speed Internet is but one issue when it comes to vulnerable populations accessing digital services. Having true access requires much more. Other barriers to overcome include:

Affordability

Having a low income is one of the greatest barriers to accessing digital services. In Prosper Canada’s report regarding low-income Canadians filing their returns, the researchers identified lack of computer access keeping one from accessing free online tax return software as a factor in the barriers to filing a return.Footnote 73 

While affordability of Internet services can be a barrier to accessing digital services, affordability of devices is also a barrier. To access services online, one must have access to a computer, tablet or smartphone. These devices are often cost-prohibitive.

The 2016 census revealed that over 14% of Canadians fall below the after-tax low-income measure.Footnote 74 As a percentage of yearly income, lower-income households spend three times more than average Canadian households on high speed Internet.Footnote 75 36% of Canadians listed cost of Internet was listed as a reason they limit their Internet use.Footnote 76 

Therefore, when speaking of access to Internet or digital services, availability of Internet services is insufficient. Affordability must be considered. When considering rural and remote populations this becomes even more important as costs for similar services are higher in rural areas.Footnote 77 

The CRTC noted that low-income Canadians

are increasingly asked to seek government services through digital platforms, yet the calculation for the level of social assistance available from governments does not take into consideration the cost of broadband connectivity that is now becoming essential for doing routine online activities, such as scheduling appointments, education and learning, and searching for jobs.Footnote 78 

In its 2017 Budget, the Government of Canada announced a five-year investment of $13.2 million towards a program to assist service providers in offering low-cost Internet to low-income families.Footnote 79 

The House of Commons Standing Committee on Industry, Science and Technology made many recommendations regarding improving access to Internet. In its recommendation that the Government of Canada “integrate broadband accessibility issues such as affordability and digital literacy in rural Canada within federal programs”, it addressed not only the barrier of affordability but that insufficient digital literacy.Footnote 80 

Digital literacy

Digital literacy is an essential skill to accessing digital government services. Even if Internet service is available, and the prospective user can afford both it and a device that connects to the Internet, they must know how to use the device and navigate the online world of digital services. These two elements of digital literacy are a requirement to accessing digital services. Underlying any attempt to access a government service in Canada is the issue of language literacy – in either French or English. To access the CRA’s digital services, there is the added need for reading and writing literacy, numeracy, and financial literacy. 

In Prosper Canada’s report regarding low-income Canadians filing their returns, these literacy requirements were identified as issues in the barriers to filing one’s return: “Not understanding what to do,” “Problems assembling documents” and “Literacy, numeracy and language barriers”.Footnote 81 The report posits that although there was a 66% drop in the number of Canadians filing their return by paper between 2006 and 2016, “certain demographic groups may be overrepresented in paper filing” and the shift to digital filing is very challenging for many vulnerable persons.Footnote 82 

In its submission to the House of Commons Standing Committee on Industry, Science and Technology, the CRTC identified a lack of digital literacy as a barrier, stating that

governments, individual Canadians, and groups representing consumers and Aboriginal peoples articulated the importance of having a citizenry with the knowledge and ability to navigate the digital world, but they expressed concern that many people lack the necessary skills and knowledge needed to effectively use broadband Internet services.Footnote 83 

In a survey contracted by the CRTC, lack of digital literacy was listed by 24% of respondents as a reason for limiting their use of the Internet.Footnote 84 

Even how the CRA conveys information can be a barrier, with an increasing reliance on providing information digitally. Taxpayers have the right to complete accurate, clear, and timely information.Footnote 85 Upholding this right requires the CRA to provide information that cannot be misunderstood, that is relevant to the intended audience, and in methods and formats easily accessible by the intended audience. This means the CRA must maintain traditional methods of communications. It also means the CRA needs to actively identify the best methods of communicating with vulnerable populations who may not have (easy) access to electronic information. The CRA’s report “Barriers associated with tax filing in vulnerable populations” recognized this, indicating the CRA must provide information in a multitude of ways.

… CRA should consider a multi-mode communications strategy, including both traditional and non-traditional information sources. The use of traditional advertising (TV, newspaper), printed materials / posters in public places and social media (Facebook ads, YouTube) were strongly suggested, as was collaboration with community organizations (seniors’ centers, immigration groups, etc.), and information at government offices related to social services or employment.

Finally, results highlight the need for clear, short messaging, presented in simple language that highlights the benefits of tax filing. Any messaging must also highlight personal financial relevance by letting an individual know that they could realize some personal financial gain if they file their return.Footnote 86 

In its 2017 Budget, the Government of Canada announced a five-year investment of $29.5 million for a Digital Literacy Exchange program to supporting non-profit organizations in operating initiatives teaching digital skills, will a focus on vulnerable populations.Footnote 87 

Risks of a push to digital services

When there are barriers to accessing information and the CRA’s services, and filing a return, there will be inherent risks. These risks are magnified for vulnerable persons. For many people, these barriers are directly associated with the digitalization of the CRA’s information and services. The primary risk of a push to digital information and services is that people will not file a return or, due to issues such as confusion or lack of literacy, will file a return with incorrect information. Being able to file one’s return and obtain benefits is crucial for many of Canada’s vulnerable persons. Canada has a self-reporting taxation system. So that people can confidently self-report, the CRA must make information readily available to those it serves, not only in a way that can be understood but also in a format and language that cannot be misunderstood. 

The immediate effects of not filing a return, or filing a return with incorrect information may include:

People do not know what they do not know. Information from the CRA is crucial to help people, especially those in vulnerable situations, in knowing about the benefits to which they are entitled and how to get those benefits. However, the CRA provides most of this information digitally. The CRA’s research “Barriers associated with tax filing in vulnerable populations” found that even when people are aware of government benefits and financial services,

there appears to be only a moderate understanding that receipt of some benefits is dependent upon filing a tax return. Indeed, those most familiar with this fact suffered a disruption in their benefits after not filing taxes, and accordingly are now aware. Regardless, across locations and audiences, findings show there is limited awareness of the full extent of benefits to which individuals may be eligible for.Footnote 88 

As mentioned, the CRA administers more than 135 social and economic benefit, incentive, and other programs, as well as deductions and credits, for the federal government and for the provincial and territorial governments in Canada. Given the breadth of the CRA’s administration, the CRA has a great deal of contact with vulnerable populations. Therefore, the impact of the CRA’s digitalization is very far reaching.

It is estimated that every year more than $1 billion in income tax credits and benefits to which people are entitled, are never received, many of which are unclaimed by vulnerable persons.Footnote 89 These benefits could help alleviate, or take people out of, their vulnerable situations, such as poverty. Many people rely upon benefits and programs administered by the CRA to support themselves and their families. In 2017, 9.5% of all Canadians lived below Canada’s Official Poverty Line as measured by the Market Basket Measure; of them, 9% were under age 18.Footnote 90 

Two main vulnerable populations in Canada include members of Indigenous and immigrant communities. These two populations also have the highest fertility rates in Canada.Footnote 91 Poverty in these two populations is problematic. The Government of Canada and the CRA have advertising and products targeted to these populations to promote applying for the CCB and other benefits although much of it is digitally based – such as online, Facebook, YouTube, Twitter, etc.

Reducing child poverty is what the Government of Canada promoted in its changes to the Canada child benefit (CCB) and its efforts to get more people to file their returns and apply for the CCB.Footnote 92 The CCB is a tax-free monthly payment that helps eligible families with the cost of raising children under age 18. It currently provides eligible families with up to $6,639 per child (under age six) per year, and up to $5,602 per child (between age 6 and age 17) per year.Footnote 93 For many, this is a lot of money and necessary for their day-to-day living.

Following are the current amounts of some benefits and credits that can assist vulnerable persons, that are dependent upon filing a return and on the amount of income claimed:

However, to access these benefits, credits, programs etc., administered by the CRA, one must file their return, even if they have no income or no taxable income. A further downstream risk of the digitalization of information and services, and not filing a return or filing one with incorrect information, is that one may unnecessarily continue in poverty or return to poverty.

For example, the CCB is based upon the family’s income from the previous year, as assessed in their return.Footnote 98 If there is difficulty in filing one’s return, this can have immediate impacts on the family income. Yearly, the monthly CCB payments are automatically adjusted based on the latest information on family income. If one does not file their return and they are in a situation where they may not receive communications from the CRA about it, they could end up with the CRA discontinuing their CCB payments. In addition, if there were a change in income that would warrant an increase in the CCB, they would not receive it.

Another risk of the digitalization of information and services has to do with the CRA collecting taxes owing or overpayments. Both of these situations may arise where one does not file their return or files it with incorrect information. It can also arise when the CRA does a review or verification of the filer’s entitlement to benefits, credits, deductions, etc. and they have difficulty providing the required documentation to prove their entitlement. In these cases, not only is the benefit, credit or deduction discontinued, but the CRA may determine there has been an overpayment and seek repayment. These situations can be catastrophic for many who rely upon those benefits, credits and/or deductions.

In its push to file returns electronically, the CRA has changed how to access paper forms and its income tax guide, and they are less readily available than previously. There are those in vulnerable populations who choose to file by paper (e.g. seniors, those who are not comfortable with digital services) and those who must file by paper (e.g. live in a remote area without sufficient Internet connectivity). 

Filing by paper brings with it additional issues. For example, if one is in a remote area and files by paper, there may be issues with timely postal service in their area. The CRA’s service standard for processing returns filed by paper are four times as long as those filed digitally – two weeks if filed digitally and eight weeks if filed by paper.Footnote 99 Having this difference in service standards creates an immediate inequity.

If one files on time but close to the filing due date of April 30, even if the CRA processes the return within the eight week service standard, this comes very close to the processing times for issuing the revised CCB or GST/HST credit payments. The benefit year for both of those is July 1 to June 30.Footnote 100 In fact, during the Taxpayers’ Ombudsman’s examination into the CRA’s delays in processing returns, the CRA advised that given the CRA’s processing timeframes and its timeframes for calculating benefit and credit payments, the CRA does not recommend filing a paper return on or close to the filing deadline of April 30 if the filer relies on their benefit payments for their day-to-day living costs.Footnote 101 There is a risk the CRA may not process the return in time to accurately calculate the benefit or credit, which in turn can jeopardize a filer’s eligibility for and correct calculation of benefit and credit payments.Footnote 102 

Accessing benefits and credits can be difficult for many vulnerable people who are left behind by the push to digital. This digitalization can further marginalize already vulnerable people. There has to be sufficient supports for the population that does not have digital access or knowledge but who need those benefits, credits, services, etc. to which they are entitled, that the CRA administers.

The Taxpayer Bill of Rights outlines the rights people have when interacting with the CRA. It includes the right to receive entitlements and to pay no more and no less than what is required by law; the right to be treated professionally, courteously and fairly; the right to complete, accurate, clear, and timely information; the right to have the costs of compliance taken into account when the CRA administers tax legislation; and the right to be represented by the person of one’s choice.Footnote 103 The CRA’s push to digital delivery of services and information potentially negatively impacts all of these rights.

The CRA’s digital services

The CRA has made considerable investment in recent history in its suite of digital services, including its secure online portals and related initiatives. Over 83% of the CRA’s services are available online.Footnote 104 The CRA’s digital services can be broken down into four main categories:

NETFILE and EFILE

NETFILE is an electronic tax-filing service that allows an individual filer to send their individual return directly to the CRA using the Internet and a NETFILE-certified software product. Persons who are self-employed or own a sole proprietorship can also use this service.Footnote 105 In the 2018 income tax filing season, 87.6% of individual returns were filed online.Footnote 106

The benefits of filing one’s return online include faster processing times - it is immediately received by the CRA’s system, eliminating the transit time of traditional mail and the CRA’s service standard for processing a digitally-filed return is four times faster than if the return is filed by paper, immediate confirmation the CRA has received the return; and access to other digital services such as Express NOA and Auto-fill My Return (see below). The benefit to vulnerable persons is mostly in timing – a better chance of no interruption of benefits, credits, refunds etc., and receiving them in a timely manner. In the 2019 tax filing season, 88.6% of individual returns were filed digitally.Footnote 107

However, not everyone can use NETFILE to file their return. For example, it cannot be used for someone who passed away or went bankrupt in either of the two preceding tax years, an emigrant or non-resident of Canada, or a return for a year earlier than the past four tax years (for example, in 2020, one cannot use NETFILE for a return for 2015 or 

earlier).Footnote 108 Tax preparation service providers must use EFILE to digitally file a return for another person.Footnote 109

Represent a Client

To allow someone else to file a return on their behalf, the filer must authorize a representative, using the appropriate CRA forms.Footnote 110 An authorized representative can use the digital service Represent a Client, which provides them with secure and controlled online access to both individual and business tax information.Footnote 111

The main benefit of Represent a Client, for vulnerable persons, is that someone can assist them with their income tax and benefit matters, including for example, a friend, a family member, a legal guardian, or an accounting or tax preparation service. The individual can provide different levels of authorization and therefore their representative will be able to access different types of information, and do different services for the person they represent.

Through Represent a Client, information that can be accessed and services that can be provided include:

My Account

My Account is one of the CRA’s secure online portals. It allows a filer to send, receive and view information so they can manage their income tax and benefit information and affairs online.Footnote 113 The CRA’s most up-to-date information is displayed in My Account. Therefore, it is possible to see information in My Account before a filer receives the official document from the CRA. For example, if the CRA reassesses a return, details of the reassessment are in My Account before the filer receives the notice of reassessment by mail.

For individuals, My Account is probably the most important of the CRA’s digital services, as it is through having a My Account that one can access many more of the CRA’s digital services. Services and information available through My Account include:

When in My Account, one can also access their My Service Canada Account (with Employment and Social Development Canada (ESDC)) without having to login or revalidate identity, broadening the services one can access through My Account.Footnote 115 In the My Service Canada Account one can view and update Employment Insurance (EI), Canada Pension Plan (CPP), and Old Age Security (OAS) information.Footnote 116

Through the Tell-Us-Once service, one can provide or update their direct deposit information with either the CRA or ESDC and it will be simultaneously updated with the other department. This information can be provided through My Account, My Service Canada Account, by calling the CRA or Service Canada, or by visiting a Service Canada Centre.Footnote 117

However, the requirements for creating a My Account create potential barriers to accessing this digital service, especially for vulnerable persons. To set up My Account, one must provide their:

Therefore, to create a My Account, one must have already filed a return. As a result, My Account, and all the digital services that are dependent upon having My Account, are not available to new filers, such as youth, newcomers to Canada, and those who may have not previously filed as they had not income but are filing for the first time to obtain benefits to which they are entitled. Providing a current postal code can be problematic for many vulnerable persons, such as those who are housing insecure. Additionally, this requires that one know the postal code the CRA has on file. This can be difficult, not only for those who are housing insecure but also for those who, for example, have moved a lot, have memory deficiencies, or mental health issues.

Auto-fill my return

Auto-fill my return allows individuals and authorized representatives to automatically fill in parts of their return with information the CRA has available at the time of filing. This can only be done for returns for 2016 and later. To use Auto-fill my return, individuals must be registered for My Account and authorized representatives must be registered for Represent a client. They must also use certified electronic filing software that offers Auto-fill my return.Footnote 119 In 2018-19 Auto-fill my return was used 11,615,727 times – 24% through NETFILE and 76% through EFILE.Footnote 120

Following are the tax information slips available through Auto-fill my return for returns for the years 2016 to 2019: 

The following information is also available through Auto-fill my return for 2019 returns:

Auto-fill my return may not fill in all of the information required to complete an individual’s return as it can only pull from the information the CRA has in its possession at the time of filing. The CRA maintains that it is the filer’s responsibility to report their income and ensure all information is correct before submitting their return o the CRA.Footnote 123

Despite the filer still being responsible to ensure the information from Auto-fill my return is correct and to add any information that Auto-fill my return does not populate, this digital service can be of great assistance to many vulnerable persons. Easing the burden of keeping and tracking copies of tax related documentation and information greatly reduces the challenges associated with not having a mailing address or a consistent mailing address, memory issues and other disabilities.

This service assists in reducing the documentation burden, as advocated by Prosper Canada in its report “Tax Time Insights: Experiences of people living on low income in Canada”

Documentation burden was cited by many participants as the most time consuming and complicated part of the tax-filing process. The federal government already has access to much of the data that taxpayers are asked to supply at tax time. Finding ways to tap into existing data more effectively, rather than asking tax payers to submit paper documents, to resubmit information that has not changed, or to reapply for benefits when their situation is unchanged, could eliminate a large portion of the burden of tax filing. CRA’s Autofill-my return represents progress on this front.Footnote 124

A family member who is an authorized representative can more easily assist in filing a return for a family member who requires assistance using Auto-fill my return. Furthermore, volunteers with the Community Volunteer Income Tax Program (CVITP)Footnote 125 can choose to use Auto-fill my return when assisting persons with modest incomes and simple income tax situations in filing their returns.Footnote 126

Using Auto-fill my return assists CVITP volunteers in helping many vulnerable individuals. It will allow them to complete returns more quickly. Persons using the services of CVITP clinics are often not aware of all the information needed to file their return, do not have access to that information, or have difficulty retaining that information. CVITP volunteers having access to much of this information through Auto-fill my return can greatly alleviate these difficulties. This in turn will help vulnerable persons more quickly complete their returns and receive refunds, and help ensure they receive benefits, credits and deductions to which they are entitled.  

Express NOA

When a filer who is registered for email notifications, or their authorized representative, files a return online, they are eligible for Express NOA, which provides a notice of assessment (NOA) directly into the certified tax software as soon as the CRA has processed it.Footnote 127 During the 2019 tax filing season, the Express NOA service was used 653,772 times.Footnote 128  The CRA will not send a paper copy of the notice of assessment when Express NOA is used. Instead, the filer will receive an email notification to inform them there is online mail to view in My Account.Footnote 129

The Notice of assessment provides a complete summary of the assessed return; the resulting refund, zero balance, or balance owing; tax assessment summary; explanation of changes and other information; Registered Retirement Savings Plan / Pooled Registered Pension Plan (RRSP/PRPP) deduction limit; and may contain the Home Buyers’ Plan and Lifelong Learning Plan statements. However, it will not reflect any payment sent in with the return as the Express NOA is processed more quickly than the payment can be processed.Footnote 130

Direct Deposit

With a Canadian bank account, individuals can sign up for direct deposit of any amounts to be paid by the CRA, including:

Signing up with the CRA can be done online through My Account, through the MyCRA mobile application, by phone, or through a number of financial institutions.Footnote 131

In 2018-19, 83.6% of benefit and credit payments administered by the CRA were made by direct deposit.Footnote 132

Payments

In addition to making payments through My Account and Represent a Client, My Payment is an online service where one can make payments directly to the CRA using their Interac, Visa Debit or MasterCard Debit cards.Footnote 133 One can make online payments by credit card through a third party provider, PayPal or Interac e-Transfer.Footnote 134 Digital options for making payments can be beneficial to persons who may have difficulty interacting with others or getting to a Canada Post outlet or financial institution where they can make in-person payments.

Online mail and Email notifications

If a person has My Account and has registered for email notifications, the CRA will send an email notifying that individual they have mail to view in their My Account; when mail sent by post has been returned to the CRA; and when important changes are made in their My Account such as a change of address, banking information, marital status or authorized representative.Footnote 135

Examples of mail you can currently receive through My Account include benefit notices and slips, instalment reminders, statements, preassessment and processing review letters, and notices of assessment or reassessment. As well, for some of its programs, the CRA sends letters requesting information and documentation through My Account.Footnote 136 If one has submitted an audit enquiry and provided an email address on the original submission form, the CRA will send an email notification when the CRA’s response is ready to view, even if they have not signed up for email notifications.Footnote 137

Being able to view mail online can be very helpful for persons who are housing insecure or whose mailing address may change frequently. With online mail and email notifications, one can still access their information, and stay current with their tax and benefit affairs. This is also helpful for those who may have difficulty clearing the CRA’s identity verification questions when telephoning the CRA for information.  

ReFILE

Through the CRA’s online ReFILE service, individuals and EFILE service providers can send requests for adjustments for returns, with certified NETFILE and EFILE software. Individuals (NETFILE users) can use ReFILE to send adjustments for returns starting with the tax year 2016, while EFILE service providers can send adjustments for returns starting with the tax year 2015.Footnote 138

With ReFILE, the same lines of a return can be changed as with Change my return in My Account.Footnote 139 An advantage to using ReFILE or Change my return is that the adjustments are made much more quickly than if an adjustment request is mailed to the CRA, and therefore the filer will know sooner if they have an amount owing, for example. The CRA’s service standards for processing adjustment requests are two weeks for digitally-filed requests, and eight weeks for paper-filed or verbal requests.Footnote 140

There are a number of restrictions to using Change my Return and ReFILE. For example, Change my return cannot be used to change:

In addition to the above restrictions, ReFILE also cannot be used for such actions as:

Submit documents

Filers and their representatives can submit documents electronically to the CRA through Submit documents in My Account or Represent a Client.Footnote 143 When documents are submitted in this way, the CRA provides a confirmation number and a reference number for use in communicating with the CRA.Footnote 144

There are two categories of documents one can provide to the CRA through Submit documents:

Mobile Apps

The CRA has several mobile apps that can be easily used on mobile devices, to view certain information, manage certain services, and obtain resources to assist in filing a return. Two examples are MyCRA and MyBenefits CRA.

MyCRA provides the following services and resources:

MyBenefits CRA provides the following services and resources:

Chatbot

The CRA has introduced a chatbot, which is an online chat mechanism it has named “Charlie” to answer general tax filing questions. The CRA states “Charlie will make it easier to get information you need to help you file your income tax and benefit return!”Footnote 148 In theory, the chatbot could help persons who have difficulty navigating the Internet. However, Charlie only provides general information that is already available online therefore, if someone is able to navigate well enough to access the chatbot and know what questions to ask it, they are likely able to get information from the CRA’s website.   

Benefits of the CRA’s digital services

As noted above, many of the CRA’s digital services can assist vulnerable persons in managing their information, filing their return, receiving payments, and generally in their dealings with the CRA. However, any benefits to digital services are based upon the person having Internet access, access to a device connected to the Internet, and a certain amount of computer (or other device) literacy. In its Digital Operations Strategic Plan: 2018-2022, the TBS stated, “a recent academic study found that 94% of homeless people owned a cellphone, which social advocates have called important lifelines to services.”Footnote 149 

Perhaps the best way to see the potential for digital services to assist persons in vulnerable situations is to provide examples. 

Take, for example, someone who is homeless or housing insecure. They may not have a mailing address and therefore, cannot receive mail from the CRA or others – no tax slips required to file a return, no Notice of Assessment, no requests from the CRA for additional information required to process a return and provide a refund or process a benefit application, and no cheques from the CRA. Someone who is homeless or housing insecure or, for example, fleeing an unsafe situation, will have difficulty keeping copies of their paperwork and tracking information or it may be impossible to keep their records. If they phone the CRA, they will have difficulty clearing security questions to validate their identity because they have to answer questions such as amounts reported on certain lines of their last return and their address the CRA has on file. When one experiences homelessness or must move frequently, updating their information with the CRA is not their top priority. Therefore, the information in the CRA’s records may not be current.

Added to these factors are those the CRA found in their study on the experiences of the homeless and housing insecure in filing taxes:

…fear or stress related to one's financial situation and worries that filing taxes may result in debt; avoidance of an existing debt with the CRA; a negative perception of the tax system, the CRA, or the government generally; challenges with tracking deadlines and with obtaining and keeping financial documents; and lack of necessary identification. Two factors that stood out during interviews as particularly salient were that, first, some individuals did not realize that they stood to benefit from filing, and second, the immediate concerns of day-to-day life were so pressing for some that tasks requiring advance planning and organization, such as filing taxes, become deprioritized.Footnote 150 

How can the CRA’s digital services help? Many of these services depend upon having My Account. This online portal allows people to access their tax and benefit information and manage their tax and benefit affairs any time they can access the Internet. While they may not have regular Internet access, there are many community centres, libraries etc. where one can access the Internet. It also allows their authorized representative, including, for example, a CVITP volunteer to access information. With these digital services, the individual and/or their authorized representative (depending upon the level of authority granted) can:

Without using these CRA digital services, this individual may not have filed their return, received a refund, and received benefits and credits to which they are entitled. With these digital services, and the resulting additional funds, this individual may be able to secure housing and improve their situation.

The CRA conducted research on the experiences of Indigenous communities with tax filing. The CRA found:

Frequently identified challenges or difficulties Indigenous Peoples encounter when trying to complete their tax return include the following: the cost of filing a tax return; limited financial literacy; limited computer or Internet access; lack of access to services, advice or assistance in their community regarding tax filing; and difficulty assembling the required documents (i.e., it was observed that this is often the case when couples separate and there are custody-related issues).Footnote 151 

The biggest barrier to accessing the CRA’s digital services would be access to the Internet due to, for example, living in a remote location, and/or low income. If this barrier can be overcome, the CRA’s digital services can assist with the cost of filing a return, lack of access to services, and with assembling the required documents. Filing one’s own return online is cheaper than using the services of a tax preparer and simpler than filing on paper, especially with Auto-fill my return. Documentation can be retrieved from, stored in, and submitted through My Account. Information online, and now the chatbot, could assist with some of the concerns around financial literacy.

Digital services could also assist vulnerable populations in accessing existing support. With access to Auto-fill my return, CVITP clinic volunteers have greater access to filers’ information, greatly increasing the likelihood of more returns being filed. Often accessing a CVITP clinic can be problematic for those in remote areas, or with issues around mobility, transportation, time off work, or childcare, for example. Permitting CVITP volunteers to use digital services to a greater degree, such as providing telephone and/or online services in assisting with filing a return, would also assist in bridging the gap for persons needing assistance in filing their return. With the COVID-19 pandemic and the necessary closure of CVITP clinics, the need for such options has become even more apparent.

Another example of where digitalization can assist is in authenticating/verifying one’s identity when communicating with the CRA. One can access general information on the Internet without verifying their identity, and apply the general information to one’s situation. If one were to phone the CRA for general information, they likewise would not need to verify their identity but if they were to begin discussing their personal situation in relation to that information, they would need to verify their identity.

Charlie the chatbot is another digital service that does not require one to provide their identity at all. The chatbot does not give personalized information but it is more interactive that simply reading information on the Internet. One can ask questions and be directed to information. One can also use the digital services offered by My Account, or any of the mobile apps, to access their personal information, instead of phoning the CRA. In such cases, they will need to know their sign-in information but they would not have to answer the various, and changing, questions of the CRA agent.

Through My Account or with the help of a CRA agent, one can create a PIN (personal identification number) to verify one’s identity when contacting the CRA on its Individual tax and benefit enquiries lines.Footnote 152 This means one only needs to remember this PIN and not have access to or remember the additional information required for the traditional method of verifying one’s identity.  

Digitalization such as voice or other biometric recognition is something that could make identity verification much easier, and the CRA may be considering implementing this technology. In its 2017 Privacy Impact Assessment regarding its Telephone Enquiries Program, the CRA noted

The new or modified program or activity involves the implementation of one or more of the following technologies:

Enhanced identification methods - this includes biometric technology (i.e. facial recognition, gait analysis, iris scan, fingerprint analysis, voice print, radio frequency identification (RFID), etc...) as well as easy pass technology, new identification cards including magnetic stripe cards, "smart cards" (i.e. identification cards that are embedded with either an antenna or a contact pad that is connected to a microprocessor and a memory chip or only a memory chip with non-programmable logic).Footnote 153 

Non-Digital CRA Services to assist vulnerable populations

What is the CRA doing to ensure those who are not using the CRA’s digital services are not left behind? The main ways to communicate with someone, if not digitally, is in person, in writing, or by telephone, as well as more traditional forms of media such as radio, television and print media. The CRA no longer has in-person service counters but it does outreach and it has the CVITP. It has telephone services and it communicates with filers by mail.

Not only is it important for the CRA to continue providing non-digital services but it must continually improve these services. The CRA must provide the same level of service to those who cannot, or choose not to, use digital services, as those who use the CRA’s digital services.

CVITP

The Community Volunteer Income Tax Program (CVITP), or the Volunteer Program in Québec, is one of the CRA’s main ways to assist vulnerable populations. The CRA partners with community organizations who provide free return preparation clinics for people, including vulnerable persons who may otherwise have difficulty filing their return. The CVITP not only allows people to meet their tax obligations, but also to gain access to, or continue to receive, the government credits and benefits designed to support them.Footnote 154 In the 2019 tax filing season, CVITP volunteers prepared 835,216 returns.Footnote 155 

To be eligible to use the services of the CVITP, the CRA prescribes that the filer has a modest income and a simple tax situation. The CRA’s definition of a simple tax situation is one that may include interest income under $1,000; income from employment, pensions, support payments, and scholarships; and benefits from disability, employment insurance, or social assistance. One cannot use the services of the CVITP if they have income from self-employment, if they have employment expenses, business or rental income/expenses, or capital gains, if they were bankrupt, or if they are filing a return for a deceased person.Footnote 156 

The CRA’s definition of “modest income” means a threshold of $35,000 for an individual, $45,000 for two people, and for each additional member of the family an increase of $2,500.Footnote 157 The CRA advised my Office that CVITP organizations and volunteers have the ability to offer to complete returns outside of the guidelines, but the CRA does not promote this. 

The CVITP can be an excellent way to assist vulnerable populations, including those who are negatively affected by the digitalization of income tax and benefit information and services. The CVITP could be a tool that would allow people to keep pace. However, despite recent improvements to the program, in its current framework, it can fall short.Footnote 158 

Many CVITP clinics and volunteers use many of the CRA’s digital services to assist filers. This can be a benefit, as in the case of using Auto-fill my return (as discussed). It can also cause some difficulties. For example, the CRA requires that if filing online (through EFILE), a return must be transmitted to the CRA within 48 hours of preparation,Footnote 159 which can be prohibitive if a volunteer must meet with a filer more than one time in the preparation process, particularly if this requires several trips to a filer’s home. CVITP volunteers have relayed that the CRA’s identity authentication process is often a barrier to accessing information necessary for them to file returns.

Many community organizations offering CVITP services struggle with difficulties including those around the digitalization of the CRA. For example, lack of adequate Internet connectivity. This leads to problems obtaining necessary training and information, and filing electronically. If they cannot file electronically, they cannot use Auto-fill my return to assist filers who do not have all their tax slips. There are also the costs associated with things such as having sufficient numbers of computers and printers, and Internet access, which can be prohibitive.

Outreach

Through the CRA’s Benefits Outreach Program, organizations who assist vulnerable populations can request an in-person visit from a CRA outreach officer, to provide information to the organization’s clients on the benefits and credits to which they may be entitled.Footnote 160 

In February 2019, the CRA opened three New Northern Service Centres (NSCs), one in each of Canada’s territorial capitals, to “deliver in-person outreach and make information on taxes, tax–filing, and benefits more readily available.”Footnote 161 In doing so, the Minister of National Revenue recognized “that individuals and businesses in Canada’s Territories face unique circumstances. The CRA is committed to addressing the barriers faced by individuals and small businesses when it comes to filing their tax returns.”Footnote 162 

Mail

The CRA uses mail as a means of necessary communication with filers but also as a means of educating and reaching non-filers. The CRA conducts mail out awareness campaigns, targeting populations who are not filing a return. For example, the CRA sent 205,425 nudge letters to educate people on the need to file a return to get benefits and credits to which they may be entitled.Footnote 163 By February 8, 2019, individual recipients of these letters filed 25,621 returns resulting in $13.3 million in tax refunds and $19.2 million in credits and benefits.Footnote 164 

The CRA embarked on an exercise to improve the quality of its written correspondence, to make it easier to understand.Footnote 165 However, the CRA also uses this written correspondence to encourage the reader to go online instead of relying upon non-digital services.Footnote 166 

Telephone

Even with the CRA’s digital services, the telephone is a critical means of contacting the CRA to get information and manage ones income taxes, benefits and credits. This is especially so for vulnerable populations. The CRA’s telephone services have been widely criticized for lack of timely service, dropped calls, and provision of inaccurate and/or inconsistent information.Footnote 167 The CRA continues to work to improve these services and in the 2018 Federal Budget, the Government of Canada allocated $206 million over five years and $33.6 million in ongoing funding to the CRA to improve telephone services, double the size of the CVITP, and update and modernize the CRA information technology infrastructure.Footnote 168 

The CRA reported that in 2018-19, it modernized its enquiries telephone systems, providing estimated wait times, created national queues to allow callers to speak to the next available agent regardless of location in the country, reviewed recorded calls to improve quality and accuracy of information provided, added two dedicated telephone lines – one each for individuals and businesses in northern Canada.Footnote 169 

In its 2018-19 Departmental Results Report, the CRA reported that CRA benefit enquiries agents answered 2,101,948 calls and 1,405,293 calls to benefit enquiries lines were served by automated services; and overall, 10,602,275 calls were answered by CRA agents and 6,924,882 calls were answered by automated services.Footnote 170 

The CRA offers a Tax Information Phone Service (TIPS), which is an automated telephone service. Through this service, callers can:

One can also make payment arrangements over the telephone, through the CRA’s TeleArrangement service, and by contacting a CRA agent at its Debt management call centre.Footnote 172 

File my Return is an automated telephone service the CRA introduced for the 2018 tax filing season, through which select filers can file their return. One must be invited by the CRA to use it and eligibility is for those with a low or fixed income whose situations are unchanged from year to year.Footnote 173 

The CRA advises that a main reason File my Return was developed was to address a lack of access to computers and the Internet. The CRA states that in 2019 it invited 4,060 individuals from Canada’s three territories which are in the north, to use File my Return but that only 1% used the service. The CRA also states that of the 542,008 individuals on social assistance whom it invited to use File my Return, only 8% used it. This low uptake speaks to the importance of consulting with those affected when changes are made to services provided, with ensuring the appropriate people are consulted, and the correct questions are asked, so that the services provided meet the needs of those whom they target.  

Alternate formats

Upon request, the CRA provides forms, publications, and individual correspondence in some alternate formats for persons with disabilities. The alternate formats are digital audio (MP3), electronic text such that screen reading software can read the information to the individual, braille, and large print. These requests can be made online or by telephone.Footnote 174 

Paper filing

Many Canadians still file their return by paper, either by choice or by necessity (such as filing a return type that the CRA does not accept electronically, lack of sufficient access to the Internet, or other socio-economic factors). The CRA reported that in the 2019 tax filing season, 11.4% of individual returns were filed by paper.Footnote 175 

Although in 2018 the CRA said it has no plans to eliminate paper income tax returns, and that “It’s really about not leaving anyone behind and making sure everyone has access to interact with us in as easy or straightforward manner as possible,”Footnote 176 getting a paper return has become much more difficult than in previous years.Footnote 177 Previously the CRA mailed paper return forms and the guide to individuals but stopped that practice. It also used to be that one could obtain the return forms and guide at Canada Post outlets. For the 2018 tax filing season, the CRA had planned only to send a paper copy of the forms and guide to persons who filed paper returns the previous tax year. I raised issue with this and recommended that paper copies remain available.

The CRA changed its planned approach and mailed paper income tax packages to 1.7 million individuals who filed paper returns the previous tax year.Footnote 178 In the 2019 tax filing season, the CRA made a limited quantity of 2018 tax packages (combining the forms and guide) available at Canada Post and Service Canada outlets, and Caisse Populaire Desjardins locations in Quebec.Footnote 179 

For the 2020 tax filing season, the CRA again mailed the 2019 income tax package to 1.7 million individuals who filed a paper return the previous year.Footnote 180 On February 25, 2020, the CRA again reiterated it does not want to leave anyone behind, stating “Since we know some Canadians, who may prefer the paper method, might not have received a copy in the mail, a limited number of tax packages will be made available, in both official languages, at select Service Canada sites across Canada” but, copies would no longer be available at Canada Post or Caisse Populaire Desjardins locations.Footnote 181 

As well, on its webpage “Do you file your taxes on paper? Here’s what you need to know,” the CRA had stated it was making limited quantities of tax packages available to pick up in person at “select northern and rural Service Canada locations.”Footnote 182 This information was later removed from the webpage, leaving only information on how to download a copy of the forms and guide or how to contact the CRA to request the income tax package be mailed out.Footnote 183 

One can order a limit of nine paper copies of the income tax package and other forms, guides and documents by calling the CRA or via the CRA’s website.Footnote 184 CVITP volunteers can obtain more than nine paper copies although the CRA does not provide information on this to CVITP volunteers.Footnote 185 

While the majority of filers may use digital services, and push for ever-increasing digitalization, the CRA needs to ensure the minority, who may be less vocal but are often more vulnerable, receive the same level of service in a non-digital format that is easily accessible to them. 

Conclusion

The CRA has made considerable investment in recent history in its suite of digital services. While such improvements do and will continue to increase the degree of ease and convenience for many in their interactions with the CRA, making use of such services require that persons are able to authenticate their identity; have access to devices on which they can use certified tax software, possess a moderately sophisticated digital literacy in one of Canada’s two official languages (English and French), and most fundamentally, have access to reliable Internet; or afford the services of a tax intermediary.

Rights exist for everyone, not just the majority. In fact, rights are more necessary for the minorities, the vulnerable, the voiceless, the powerless, the unseen, and the unheard. Such is the case for taxpayer rights. Of the rights in the Taxpayer Bill of Rights, the following are especially important for vulnerable populations when the CRA is moving to more digital services:

Fairness requires consideration of individual experience and circumstances vis-à-vis the CRA’s services. Going digital removes the human element and therefore often the ability to consider individual circumstances. To quote Nina Olson, former Taxpayer Advocate for the United States, “If you can’t look at the facts and circumstances of a particular taxpayer then I don’t know what you’re in the business of tax administration for.”Footnote 186

Digital services need to be approached from the perspective that they empower people, not marginalize them. There is the greatest room to empower with respect to vulnerable populations. Other populations are already empowered in so many ways. Building digital services from the perspective of the vulnerable populations and empowering them, will also create services that benefit other populations.

As the Taxpayers’ Ombudsman, I lead my Office in helping to address a power imbalance between people and the CRA. Digital services can also help to bridge this gap or, they can make it wider.

Consulting with vulnerable persons and organizations who assist them, is critical when the CRA (and government generally) is designing digital services. It is important to ensure that in designing services to meet the needs of vulnerable persons, that one checks their privilege and preconceptions. As such, I recognize that I can start the conversation but neither I nor the CRA can finish it alone. 

The CRA needs to involve in these consultations those among its employees who can identify with the vulnerable populations and not just on the surface. It is not about the CRA educating people on how to access its system and its digital services, and what the CRA is doing for them. That is secondary and can only happen after the CRA finds out what people need from it.

It can be difficult to connect directly with vulnerable persons and in large enough numbers to adequately understand their needs, from their perspective. One of the best ways to ensure digital services benefit vulnerable populations is in partnership with organizations who assist them. They can help give the vulnerable a voice. Firstly, find out how to make digital services work for the vulnerable, to be accessible and user-friendly. Find out:

Secondly, provide increased targeted digital services, access to Internet, and supports to these organizations so they can provide better service to their clients. For example, technology and increased digital services may best serve vulnerable populations when the CRA uses digital solutions for CVITP organizations and volunteers.

While there is room for improvement, generally, the Government of Canada and the CRA appear to have a good approach to providing digital services. They are seeking to meet the needs of the majority and at least appear to be considering the needs of those who do not have easy access to digital services. For example, conducting research and focus groups with persons from vulnerable sectors, to better understand their needs and expectations, and having the goal of designing the CRA’s programs and services from the perspective of its clients. More of this approach and type of research, and specifically related to the provision of digital and non-digital services, is needed.

The CRA’s use of customer experience (CX) or user experience (UX) in developing its digital services is important. However, it is based upon people having access to digital services. The various problems associated with reliable Internet access must first be addressed for vulnerable persons to be able to benefit from the CRA’s digital services.

The Government of Canada’s goals on improving connectivity across Canada will only resolve part of the problem. Socio-economic factors must also be addressed and innovative solutions found, such as supporting free computer access centres. This is something on which all levels of government will need to collaborate, to ensure access, especially in rural and remote areas. In these areas the small and widely dispersed populations make it less profitable for the public sector to offer such Internet services, and more difficult for community organizations to have a sufficient base to support offering these services.

Agility and flexibility with respect to digital services is a necessity, as is prioritizing what changes to make and at what point. If something is not working well, such as not user-friendly, not meeting the target audience, etc., the CRA needs to be able to quickly make changes.

What does the ideal look like with respect to digital services? Some key elements are:

The push to digital is not going away. Much of the population expects it. Tax revenue agencies need to not only keep pace but also be on the cutting edge of innovative ways to use the digital world to enhance their services, for those who most need their services. It may seem obvious but this cannot be done at the expense of those who are already vulnerable. Digital services can be used to help vulnerable persons, but that needs to be a specific goal, in and of itself. Sufficient connectivity and access is necessary. Keeping up with and pushing the boundaries in technology is necessary. Finding out what people need is necessary. To ensure vulnerable persons have a voice in saying what they need, it is essential to collaborate with those groups and organizations whose mandate is to assist and serve our vulnerable populations.

Annex 1 - Taxpayer Bill of Rights

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Canada Revenue Agency
Taxpayer Bill of Rights
  1. You have the right to receive entitlements and to pay no more and no less than what is required by law.
  2. You have the right to service in both official languages.
  3. You have the right to privacy and confidentiality.
  4. You have the right to a formal review and a subsequent appeal.
  5. You have the right to be treated professionally, courteously, and fairly.
  6. You have the right to complete, accurate, clear, and timely information.
  7. You have the right, unless otherwise provided by law, not to pay income tax amounts in dispute before you have had an impartial review.
  8. You have the right to have the law applied consistently.
  9. You have the right to lodge a service complaint and to be provided with an explanation of our findings.
  10. You have the right to have the costs of compliance taken into account when administering tax legislation.
  11. You have the right to expect us to be accountable.
  12. You have the right to relief from penalties and interest under tax legislation because of extraordinary circumstances.
  13. You have the right to expect us to publish our service standards and report annually.
  14. You have the right to expect us to warn you about questionable tax schemes in a timely manner.
  15. You have the right to be represented by a person of your choice.
  16. You have the right to lodge a service complaint and request a formal review without fear of reprisal.

Commitment to Small Business

  1. The Canada Revenue Agency (CRA) is committed to administering the tax system in a way that minimizes the costs of compliance for small businesses.
  2. The CRA is committed to working with all governments to streamline service, minimize cost, and reduce the compliance burden.
  3. The CRA is committed to providing service offerings that meet the needs of small businesses.
  4. The CRA is committed to conducting outreach activities that help small businesses comply with the legislation we administer.
  5. The CRA is committed to explaining how we conduct our business with small businesses.
For more information, visit the CRA website at canada.ca/taxpayer-rights
 

Agence du revenu du Canada

Charte des droits du contribuable

  1. Vous avez le droit de recevoir les montants qui vous reviennent et de payer seulement ce qui est exigé par la loi.
  2. Vous avez le droit de recevoir des services dans les deux langues officielles.
  3. Vous avez droit à la vie privée et à la confidentialité.
  4. Vous avez le droit d'obtenir un examen officiel et de déposer par la suite un appel.
  5. Vous avez le droit d'être traité de façon professionnelle, courtoise et équitable.
  6. Vous avez droit à des renseignements complets, exacts, clairs et opportuns.
  7. Vous avez le droit de ne pas payer tout montant d'impôt en litige avant d'avoir obtenu un examen impartial, sauf disposition contraire de la loi.
  8. Vous avez droit à une application uniforme de la loi.
  9. Vous avez le droit de déposer une plainte en matière de service et d'obtenir une explication de nos constatations.
  10. Vous avez le droit que nous tenions compte des coûts liés à l'observation dans le cadre de l'administration des lois fiscales.
  11. Vous êtes en droit de vous attendre à ce que nous rendions compte.
  12. Vous avez droit, en raison de circonstances extraordinaires, à un allégement des pénalités et des intérêts imposés en vertu des lois fiscales.
  13. Vous êtes en droit de vous attendre à ce que nous publiions nos normes de service et que nous en rendions compte chaque année.
  14. Vous êtes en droit de vous attendre à ce que nous vous mettions en garde contre des stratagèmes fiscaux douteux en temps opportun.
  15. Vous avez le droit d'être représenté par la personne de votre choix.
  16. Vous avez le droit de déposer une plainte en matière de service et de demander un examen officiel sans crainte de représailles.

Engagement envers les petites entreprises

  1. L'Agence du revenu du Canada (ARC) s'engage à administrer le régime fiscal afin de réduire au minimum les coûts de l'observation de la loi engagés par les petites entreprises.
  2. L'ARC s'engage à collaborer avec tous les gouvernements en vue de rationaliser les services, de réduire les coûts et d'alléger le fardeau lié à l'observation de la loi.
  3. L'ARC s'engage à offrir des services qui répondent aux besoins des petites entreprises.
  4. L'ARC s'engage à offrir des services au public qui aident les petites entreprises à observer les lois qu'elle administre.
  5. L'ARC s'engage à expliquer sa façon de mener ses activités auprès des petites entreprises.
Pour obtenir plus de renseignements, visitez le site Web de l'ARC à canada.ca/droits-contribuable

Annex 2 - Glossary of Acronyms

CCB             Canada child benefit

CDS             Canadian Digital Service

COVID-19    coronavirus disease 2019

CPP             Canada Pension Plan

CRA             Canada Revenue Agency

CRTC           Canadian Radio-television and Telecommunications Commission

CVITP          Community Volunteer Income Tax Program

CWB            Canada workers benefit

CX                customer experience

DTC             Disability tax credit

EI                 Employment Insurance

ESDC           Employment and Social Development Canada

GST             Goods and services tax

HBP             Home Buyers’ Plan

HST             Harmonized sales tax

Mbps           Megabits per second

NOA            Notice of assessment

NSC             Northern Service Centre

OAS             Old Age Security

PIN              personal identification number

PRPP           Pooled registered pension plan

RFID            radio frequency identification

RIF               Registered Income Fund

RSP             Retirement Savings Plan

RRSP           Registered Retirement Savings Plan

TBS              Treasury Board Secretariat

TIPS             Tax Information Phone Service

TFSA            Tax-Free Savings Account

TV                television

US                United States of America

UX                user experience

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