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Tax-filing a gateway to poverty reduction in Calgary say experts

Not filing taxes leaves thousands of dollars in benefits and tax-credits on the table for low income Calgarians.

And tax time is just around the corner.

Federal and provincial benefits like the Canada Child Benefit, old age security, GST rebates, climate action incentive payments, and income support are all tied to filing with the Canada Revenue Agency.

For example, the Canada Child Benefit provides up to $6,833 per year, per child, for the lowest income families.

“So things that really help people who live on low incomes, and increase their income—many times those extra resources are tied to filing taxes,” said Donna McBride, director of operations with Momentum.

Although the tax filing deadline is April 30, Momentum and other partner agencies that make up the Apsire Calgary Financial Empowerment Collective are looking to help low-income Calgarians prepare for tax season.

“Really, why we do this work as a poverty reduction strategy is because it does help people increase their income by helping them understand what benefits that they qualify for,” said McBride.

“One of the strongest methods for doing that is by having community agencies that have relationships and trust with people who live on low incomes, to put on clinics.”

Trust is a key component of poverty reduction

One of the key methods to introducing low income Calgarians to benefits that come from tax filing, has been to engage them through the agencies they may already be working with.

Whether that means low income seniors through the Kerby Centre, or for Calgarians receiving basic needs support through Rise Calgary. Currently, there are more than 30 agencies offering programming to help move people out of poverty.

McBride pointed out how Momentum's partner agency Rise Calgary has used that trust gained to help people get fair access to the tax system.

"They're trained and authorized through the Canada Revenue Agency, so they can be trusted to know that everything they're saying is true and accurate, and people can trust that," she said.

Filing with the Canada Revenue Agency can be an intimidating process for people, not just those experiencing poverty. An underestimated aspect of poverty is how complex it can be for individuals to file their taxes, especially if they haven't for several years.

"If you factor in a low income, or potentially homelessness, that just adds extra barriers to that," said Ameera Shivji, communication and engagement specialist with Vibrant Communities Calgary.

One of the ways that VCC has made it easier for people to access tax clinics, and to find the right clinic for more complex tax needs, is through providing direct links to those registered with the CRA.

"We want to do anything that we can to support those agencies and getting the word out there," she said.

Free clinics have helped Calgarians to access millions in benefits

In 2019, 8,798 returns were filled by low income Calgarians using free clinics, accessing $43 million in benefits.

Some of the barriers to accessing these benefits have been in addition to the complexity of filing taxes, the high cost of commercial tax help, literacy and numeracy barriers, and precarious housing.

In 2020 for example, only three per cent of homeless Calgarians were able to take advantage of the GST tax credit, according to VCC.

The cost of going to a commercial tax preparation service can also be a burden for low income individuals and families, with up to 15 per cent of their refund going to the preparation service.

A particular concern identified by Prosper Canada in 2019 was some commercial tax preparation services helping clients to access disability tax credits, and then taking up to 40 per cent of the refund as a fee for doing so.

VCC launched the File For Free YYC campaign during the pandemic to try and better reach individuals who had become missed as the tax clinics moved online.

"A lot of tax clinic serving agencies weren't getting to folks without in person services, and we wanted to make sure that people knew that the tax clinics were still going on, even though they were remote," said Shivji.

Currently they are working to expand upon that campaign this year, helping Calgarians to access more than just expert help.

Information such as where to borrow a laptop computer, where reliable Wi-Fi access is located, is available for people who might be able to do their taxes on their own, but need the computer resources to do so.