The Success of Benefits Program Reflects the Importance of Tax Clinics

Posted on March 6, 2019
By Justin Williams

tax-468440_1920The release of the Canadian Income Survey for 2017 came with a welcome piece of news for those working in poverty reduction: fewer Canadians and especially fewer children were living below the official poverty line and the low-income measure in 2017. In fact, Canada has already reached its 2020 target of a 20% reduction in poverty. While there is still significant work to be done to reach a 50% reduction in poverty by 2030, and to ultimately eliminate poverty, it is clear that the work being done by every level of government and by community-based roundtables is having an impact.

Poverty Reduction Highlights 2016 to 2017:

  • 825,000 Canadians lifted out of poverty
  • Percentage of Canadians living below the poverty line from 10.6% to 9.5%
  • 133,000 fewer children living below the official poverty line (and 278,000 fewer children living in poverty compared to 2015)
  • Lone-parent families’ rate of poverty declined from 29.2% to 22.7%
  • Child Poverty in Alberta cut in half from 10% to 5%

One of the main reasons for the impressive reduction in poverty has been improvements to tax benefits available to individuals and families. As part of the Opportunity for All, Canada’s first national poverty reduction strategy, the Federal government made major changes to Canada’s tax benefit programs to support individuals with modest means. These include the Canada Workers Benefit, Guaranteed Income Supplement, and the Canada Child Benefit. The Canada Child Benefit, which was introduced in 2016/17 provided increased support for more than 3.3 million families in Canada. In 2018, the Canada Child Benefit was indexed to inflation to ensure that it would increase with the cost of living to support families with the cost of raising their children.

Tax benefits like those mentioned above require individuals to file their taxes to be enrolled or to stay enrolled in programs. Community-based programs to encourage tax filing are crucial to the success of these programs as they support individuals who might be reluctant to file their taxes maximize the returns available to them. This is why the national strategy double support for the Community Volunteer Tax Program.

Vibrant Communities’ Cities Reducing Poverty views tax filing support as an important component of financial empowerment of individuals. When combined with financial literacy support, a positive tax return can support individuals to move out of poverty, pay off debts, develop a saving strategy. Additionally, these supports help infuse money into their communities as individuals with modest incomes gain more dollars to spend locally. In 2017, more than 15 members of the Cities Reducing Poverty network were actively working to support financial empowerment including financial literacy workshops and tax filing supports. Not surprisingly, these tax clinics had a real impact on the individuals and communities that they served.

End Poverty Edmonton: Make Tax Time Pay in 2017

  • 31 Make Tax Time Pay sites
  • Supported 4,230 individuals to file returns
  • Anticipated returns of over $11.5 million in benefits and returns

Enough for All Calgary: Financial Empowerment Collaborative 2017

  • 8,445 people participated in tax clinics
  • 84% increase in participation over 2016
  • Over $3.7 million provided in benefits and returns

Tamarack and Vibrant Communities applauds the work being done to eliminate poverty in Canada. There is much work to be done, but last week’s announcement reflects the value of combined efforts to address poverty to create population-level outcomes. This is why we are so excited about our work to support cities to implement Opportunities for All as a truly national poverty reduction strategy.

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Cities Reducing Poverty, Poverty Reduction Strategy, Justin Williams

Justin Williams

By Justin Williams

Justin is the Managing Assistant with Tamarack’s Vibrant Communities team. Before joining Tamarack, he worked in higher-education and student advocacy managing research and political affairs teams. Justin is passionate about the role of governance processes in promoting community, sustainability and poverty reduction.

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