Policy Forum: Re-Envisaging the Canada Revenue Agency - From Tax Collector to Benefit Delivery Agent

Canadian Tax Journal/Revue fiscale canadienne, Vol. 69, No. 1, 2021, pp. 99-114

16 Pages Posted: 27 Apr 2021

See all articles by Gillian Petit

Gillian Petit

University of Calgary - The School of Public Policy; University of Calgary - Department of Economics

Lindsay M. Tedds

University of Calgary - The School of Public Policy; University of Calgary - Department of Economics

David Green

University of British Columbia (UBC) - Vancouver School of Economics

Jonathan Rhys Kesselman

Simon Fraser University School of Public Policy

Date Written: April 2021

Abstract

In Canada, the tax system is not used just to raise revenue; it is also an important instrument for achieving various social policy objectives. As a result, the tax system has become closely intertwined with the income support system; it now serves as the delivery mechanism for many key income support benefits. As a benefit administration tool, the tax system has advantages, but it is also problematic. First, it relies on self-assessment, which means that the onus is on individual taxfilers to provide complete and accurate information to the government on the income taxes that they owe. However, persons who have no tax liability are not legally required to file tax returns, and therefore many may not do so. In the context of benefit delivery, the reliance on self-assessment risks missing many individuals who are eligible to receive income benefits. Second, individuals generally file a self-assessed tax return only once a year. As a result, the tax system could not respond to the dramatic in-year income shocks that occurred during the COVID-19 pandemic. We identify ways to modernize Canada's tax system and make it more responsive and streamlined for the purposes of benefit delivery. Reforms such as pre-filled tax forms and real-time reporting could greatly improve the ability of the Canada Revenue Agency to deliver income benefits, and the ability of the federal and provincial governments to meet social objectives, including those set out in Canada's and the provinces' poverty reduction strategies.

Keywords: Benefits, support, tax systems, social policy, Canada Revenue Agency

Suggested Citation

Petit, Gillian and Tedds, Lindsay M. and Green, David and Kesselman, Jonathan Rhys, Policy Forum: Re-Envisaging the Canada Revenue Agency - From Tax Collector to Benefit Delivery Agent (April 2021). Canadian Tax Journal/Revue fiscale canadienne, Vol. 69, No. 1, 2021, pp. 99-114, Available at SSRN: https://ssrn.com/abstract=3822626

Gillian Petit

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
Canada

University of Calgary - Department of Economics ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

Lindsay M. Tedds (Contact Author)

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
Canada

University of Calgary - Department of Economics ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

David Green

University of British Columbia (UBC) - Vancouver School of Economics ( email )

6000 Iona Dr
Vancouver, BC V6T 1L4
Canada

Jonathan Rhys Kesselman

Simon Fraser University School of Public Policy ( email )

515 West Hastings Street
Vancouver, British Columbia V6B 5K3
Canada
778-782-5035 (Phone)

HOME PAGE: http://www.sfu.ca/mpp/about/faculty_and_associates/jon_kesselman/

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