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The Mystery of Unclaimed Tax Benefits

By Karen Kelly

Each year, $1.7 billion dollars in social benefits go unclaimed in Canada, sitting in programs such as the GST tax rebate, the Canada Workers Benefit and the Canada Child Benefit.

Most are meant for people who are struggling financially. As researchers who study social policy and income support for low-income Canadians, Jennifer Robson and Saul Schwartz wanted to know why people who need this financial help aren鈥檛 receiving it.

The answer? They don鈥檛 file taxes.

Jennifer Robson
Professor Jennifer Robson

鈥淲hen people don鈥檛 file, they are shut out from all of the cash benefits delivered through the tax system and that leaves them measurably worse off. Some families are leaving thousands of dollars on the table,鈥 says Robson, a professor in the Master of Political Management program.

She notes that not having a tax return makes it harder for lower income Canadians to access a range of income-tested programs, from childcare subsidies, to legal aid, to pharmacare because provincial and local governments rely on tax information to check eligibility.

She and Schwartz, a professor in the School of Public Policy and Administration, used Statistics Canada data to analyze the economic situations of working aged adults who did not file. They published their findings in an article entitled 鈥.” The article won the Canadian Economics Association鈥檚 Vanderkamp Prize in 2020 for the best paper published in Canadian Public Policy.

Saul Schwartz
Professor Saul Schwartz

鈥淲e estimate that about 12 percent of working-age Canadians did not file a return and, as a result, were unlikely to have received the benefits for which they were eligible,鈥 explains Schwartz. 鈥淲e think the federal government should make serious efforts to reach those people and get them the benefits to which they are entitled.鈥

Robson agrees, citing the effect that would have on measurement of poverty rates in Canada.

鈥淚t鈥檚 a particularly large difference for families with children: it adds up to approximately 30,000 more kids in low-income circumstances,鈥 says Robson. 鈥淚f you are a government looking to reduce poverty, you should consider this.鈥

Read full story in the Faculty of Public Affairs’ Another Take