Automatic tax filing could create problems for some lower-income Canadians who depend on tax-linked benefits, the Taxpayers’ Ombudsperson warned in a submission to Parliament.
The office is asking the House of Commons Standing Committee on Finance to examine the proposed deemed-filing provisions in Bill C-31 before the legislation is passed.
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Why automatic tax filing is raising concerns
Automatic tax filing is being developed to help people with lower incomes and simple tax situations file returns and maintain access to credits and benefits.
The Taxpayers’ Ombudsperson said the goal is worthwhile, but raised concerns about how the proposed deemed-filing system would work in practice.
Under the proposal, the Canada Revenue Agency could file a return for certain eligible taxpayers without requiring them to complete or expressly approve the return, unless they take action to opt out.
The office said Bill C-31 does not set a specific date for notifying taxpayers or filing returns on their behalf.
That uncertainty could create a risk that benefit payments are interrupted or delayed, particularly for people who rely on those payments for essential household expenses.
Benefits often depend on filing a tax return
Canadians generally need to file an income tax and benefit return each year to receive or continue receiving payments such as the GST/HST credit, the Canada Child Benefit and the Canada Disability Benefit.
That requirement can apply even when a person had little or no income and does not owe tax.
The CRA says its automatic filing services are intended to remove barriers for lower-income people with straightforward tax situations and help them access the credits and benefits for which they qualify.
The Ombudsperson also warned that the proposed eligibility rules could eventually exclude people who continue using deemed filing.
The bill would require an eligible taxpayer not to have filed a return for one of the previous three tax years, according to the office’s statement.
Ombudsperson backs reviewable pre-filled returns
The Taxpayers’ Ombudsperson recommended that the government and CRA prioritize pre-filled returns that taxpayers can review and approve through their CRA accounts.
The CRA says that service is expected to launch in March 2027, initially inviting about one million eligible individuals to use a pre-filled return for the 2026 tax year.
Under that model, taxpayers would be able to check information already held by the CRA, make corrections or additions and then consent to the return being filed.
The program is expected to expand to as many as 5.5 million people by the 2028 tax year.
| Filing option | Status | How it works |
|---|---|---|
| SimpleFile | Available | Eligible taxpayers file through digital, telephone or paper options. |
| Deemed filing | Proposed and dependent on Royal Assent | The CRA could file for eligible people who do not owe tax, subject to the proposed rules. |
| Pre-filled return in CRA account | Expected March 2027 | Eligible taxpayers review, update and approve information before the CRA files the return. |
What Bill C-31 would change
Bill C-31, formally the second budget implementation bill, was introduced in the House of Commons on May 6, 2026.
Its tax provisions include measures intended to deliver automatic federal benefits for lower-income individuals and create the legal framework for deemed filing.
The bill remains a proposal at this stage.
The Taxpayers’ Ombudsperson’s warning is directed at the committee’s review and is not an announcement that benefit payments have already changed.
The CRA has separately described the deemed-filing initiative as a small pilot planned for fall 2026, pending Royal Assent.
What taxpayers should do now
No immediate action is required because the proposed deemed-filing rules are not yet an enacted change.
However, Canadians who receive income-tested benefits should continue filing their tax returns every year, even when they have little or no income, unless the CRA gives them different instructions.
People who may qualify for the CRA’s future pre-filled-return service should also watch their CRA account and keep their contact and correspondence preferences current.
The CRA says some potential invitees must have filed their 2025 return by October 31, 2026, have a lower income and simple tax situation, hold a CRA account and use electronic correspondence.
The Finance committee’s review will determine whether changes are recommended to the proposed system before Parliament considers the bill further.
Frequently Asked Questions
Has automatic tax filing become law in Canada?
No. The deemed-filing provisions are part of proposed Bill C-31 and remain subject to Parliament’s legislative process and Royal Assent.
Why could deemed filing affect CRA benefit payments?
Many benefits require an annual tax return. The Taxpayers’ Ombudsperson said unclear notification and filing timelines could create interruptions or delays.
When are CRA pre-filled tax returns expected to launch?
The CRA says the service is expected to begin in March 2027 for about one million eligible individuals filing for the 2026 tax year.
Will taxpayers be able to review a pre-filled return?
Yes. The planned service would allow eligible taxpayers to review information, make updates and approve the return before it is filed.
What should Canadians receiving benefits do now?
They should continue filing their tax returns each year, monitor their CRA account and keep their contact and electronic correspondence information up to date.
Fact-Checked: Key facts were checked against the Taxpayers’ Ombudsperson, Canada Revenue Agency and Parliament of Canada materials published or available as of October 7, 2026.
Disclaimer: This article describes proposed legislation and planned CRA services, which may change during Parliament’s review and implementation process.