How do immigrants file tax returns?
Statistics Canada has released its latest report.
Statistics Canada conducted a study and found that there has been an overall improvement in tax filing rates among immigrants since the mid-1990s. About 89% of immigrants from the 2017-2019 arrivals filed an income tax return in the year of arrival or the following year. This is notably higher than in 1993-1996 (83%) and slightly higher than in most subsequent years. However, there are significant differences in filing rates by immigration type.
Why even bother filing returns in the first place?
You can read more about the taxation system in Canada in a separate article. In short, everyone who officially works in Canada automatically gives part of their income to the government in the form of taxes. At the same time, all residents and non-residents who have income in Canada must file an annual declaration with the Canada Revenue Agency. Based on these data, the tax agency either assigns additional payments or refunds part of the money.
In addition, there are numerous benefits and payments available to filers from the Government of Canada. These include health benefits, quarterly tax credits, favorable credit terms, and many more.
Who is most likely to file returns?
Of all the groups examined in this study, refugees tended to have the highest filing rates after relocation. The percentage of refugees (whether privately or government sponsored) who filed income tax returns in the year of relocation or the following year is close to or above 95%. Thus, a large proportion of this group is well represented in the tax system and could potentially begin to benefit from the incentives introduced to support them.
Who files less frequently than others?
Immigrants who arrived under the federal skilled worker program are the least likely to file an income tax return after moving, regardless of the year of move. In the '90s, 82% to 85% of them filed paperwork with the Canada Revenue Agency; in the noughties, the rate dropped to 80%; and in 2017-2019, it was 77%. In those years, participants in the skilled worker program made up about 16% of all immigrants aged 25-64. This is the third largest immigration class after those selected under the provincial and family programs.
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