Living wage calculations assume people are filing taxes to get income-boosting benefits, but is that a fair assumption?

In Canada, the personal income tax system is not just used to raise revenue, it is also an important way for the government to deliver various income support benefits, like the Canada Child Benefit and GST refunds. By not filing, many individuals and families may be losing out on thousands of dollars in benefits.

The Alberta Living Wage network uses several of these supports when calculating living wages. However, in Alberta, more than 15% of working age adults don’t file their taxes – the second highest in the country, according to a February 2020 report published by the University of Calgary School of Public Policy.

A recent study from Prosper Canada noted that many people with low incomes are unaware of the benefits or where to get help. Literacy, numeracy and language barriers and problems assembling and storing documentation all came into play when determining whether to file. There was also considerable fear of drawing government scrutiny or making mistakes. COVID-19 has also added a new challenge to accessing available supports.

When you sign on as a living wage employer, we encourage you to support your employees in filing their taxes. Check out Tax Filing Help for information and up-to-date resources and help us spread the word and share resources because together we can break down barriers to tax filing.