Canada

Those who immigrate to Canada often miss out on benefits they could get from the government because they fail to file their income tax returns in the first year or two after arriving in Canada, a study reveals.

In Tax-Filing Rates Of Newly Landed Immigrants In Canada: Trends And Insights, researchers Tahsin  Mehdi, Ying Gai, Ping Ching Winnie Chan, René Morissette, Jason Raymond, Rubab Arim and Dylan Saunders discovered that newly-landed immigrants in Canada sometimes delay filing tax returns as they settle in and so miss out on tax benefits for which they are eligible. 

“Providing them with a financial support structure helps ensure that they become contributing members of society, especially at a time when Canada is relying on immigration to address labour supply issues,” note the researchers.

“For example, one of the most accessible benefits available to families with young children is the Canada child benefit, which is a tax-free payment that was introduced in 2016. The child tax benefit is available to all families with children younger than 18 years, as long as parents or guardians file income tax returns.”

In their study, the researchers found that 15 per cent of couples where both spouses were aged 25 to 64 years and had landed in Canada from 2017 to 2019 with children younger than 18 years had not filed T1 income tax returns in their landing year or the following year.


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“Among immigration classes, families whose principal applicant was a refugee had the highest filing rates at 96 per cent, while those whose principal applicant was a Federal Skilled Worker (FSW) had the lowest, at 74 per cent,” reports Statistics Canada.

“Families where the principal applicant had no university degree at landing were more likely to file at 91 per cent than those with a graduate degree at landing at 79 per cent.”

Access to settlement services, which varies somewhat from province to province and by immigration program may account for some of the differences in the tax filing rate of newly-arrived immigrants.

Refugees More Apt To File Income Tax Returns Than Immigrants Arriving Under The FSW

Refugees, who are the most likely to file income tax reports soon after arriving, are also the only class of immigrants which have access to the Resettlement Assistance Program (RAP).

The researchers suggest more study needs to be done to identify potential beneficiaries of Canadian tax benefits among newly arrived immigrants – but the study also admits this will not be an easy task.

“Establishing a pool of beneficiaries is not a straightforward process by any means. Some immigrants may move back to their country of origin or get jobs outside Canada, so emigration of immigrants poses a significant challenge,” the researchers note. 

“Moreover, international migration has become increasingly fluid and the line between temporary and permanent migration has become blurred … This raises the question of whether to include immigrants who leave Canada as part of the target population of beneficiaries.”

The tax filing rate of newly-arrived immigrants has been improving since the mid-1990s.

“Around 89 per cent of immigrants from the 2017-to-2019 landing cohort filed an income tax return in the year of landing or the year after,” note researchers. 

“This is markedly higher than the rate (of 83 per cent) observed for the 1993-to-1996 landing cohort … and marginally higher than the rates observed for most of the subsequent cohorts.”

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