Prime Minister Mark Carney has unveiled major affordability measures in Budget 2025, headlined by a plan to introduce automatic tax filing for low-income Canadians.
Announced during a press conference in Nepean, this initiative aims to simplify tax filing, ensure more people receive their entitled benefits, and reduce barriers for those with limited access to financial services.
The program will begin in the 2026 tax year and is expected to help 5.5 million Canadians by 2028. Alongside this reform, the government will make the National School Food Program permanent and extend the Canada Strong Pass, reaffirming its focus on cost-of-living relief and social support.
Automatic Tax Filing: A Game-Changer for Low-Income Canadians
How It Works
The automatic tax filing system will allow the Canada Revenue Agency (CRA) to prepare pre-filled tax returns for eligible Canadians with simple financial situations.
Many low-income individuals fail to file taxes because they believe they owe nothing, causing them to lose access to key benefits such as GST/HST credits, the Canada Child Benefit, and the Canada Disability Benefit.
Under the new plan, CRA will use existing data to automatically process returns, reducing missed benefits and administrative burdens. The rollout will start in 2026, expanding gradually to cover millions of Canadians by 2028.
Why It’s Important
Roughly 12% of working-age Canadians do not file taxes each year, often missing essential support. With the CRA capable of pre-filling nearly one-third of annual tax returns, the system will close critical gaps for vulnerable individuals.
However, key details remain uncertain, including income eligibility thresholds, data accuracy safeguards, and whether taxpayers will need to confirm details before filing.
Key Measures Announced
| Measure | Details / Target |
|---|---|
| Automatic Tax Filing | Launch in 2026; reaching 5.5 million Canadians by 2028. |
| Permanent School Food Program | Will serve 400,000 children and save families up to $800 annually. |
| Canada Strong Pass Extension | Extended for holiday 2025 and summer 2026; includes free or discounted access to parks, museums, and rail travel. |
| Automatic Benefit Access | CRA to ensure all eligible Canadians receive federal credits and benefits. |
| Government Efficiency Plan | Focused on reducing waste and reallocating funds to essential social programs. |
These initiatives are designed to improve affordability, reduce inequality, and modernize public services for Canadians.
Supporting Measures in Budget 2025
Permanent School Food Program
The National School Food Program will now be permanent, benefiting around 400,000 children across Canada. The initiative aims to reduce grocery costs by up to $800 per family annually and will be coordinated with provinces and territories to ensure equal access nationwide.
Canada Strong Pass Renewal
The Canada Strong Pass will be renewed for holiday 2025 and summer 2026, giving young adults (18–24) and families free or discounted access to parks, museums, and historic sites, plus reduced rail travel fares.
The goal is to make cultural and recreational activities more accessible while supporting domestic tourism.
Fiscal Responsibility
Mark Carney emphasized that the government will fund these programs by reducing operational inefficiencies rather than raising taxes. The aim is to maintain fiscal discipline while addressing cost-of-living pressures on Canadians.
Benefits and Challenges
Potential Benefits
- Simplified access to benefits for millions of Canadians.
- Reduced workload for tax clinics and service providers.
- Financial relief for families through permanent meal programs and travel discounts.
Key Challenges
- Ensuring data accuracy and privacy in the automatic system.
- Avoiding eligibility confusion during rollout.
- Managing a smooth transition to the new process while maintaining fairness.
The automatic tax filing program announced by PM Mark Carney marks a historic shift toward a more inclusive and efficient tax system. Together with the School Food Program and Canada Strong Pass, these initiatives reflect a broader commitment to affordability, fairness, and economic stability.
By 2028, millions of Canadians are expected to benefit directly from simplified tax filing and expanded access to public support — a crucial step in ensuring no one is left behind.
FAQs
Who will qualify for automatic tax filing?
Low-income Canadians with simple tax situations. The program aims to reach 5.5 million people by 2028.
When will automatic tax filing start?
It will begin in the 2026 tax year, expanding gradually nationwide.
What benefits will it cover?
It will automatically grant access to GST/HST credits, Canada Child Benefit, and Canada Disability Benefit.