Canada’s refugees have more tax return probability in the 1st year than skilled workers. A recent study by Statistics Canada states that skilled workers have less possibility to file for tax returns after arriving in Canada in their first year. This study summarizes all the recent patterns of tax filing among new immigrants in Canada between the age group of 25 and 64. This records the data of immigrants between 1993 and 2019.
The study even claimed that filing rates enhanced in 1990 and continued to remain steady. Furthermore, it states that 90 percent of new immigrants file income tax returns in their first or second year of landing.
Landing attributes, including immigration class or education level, impacted the filing rates.
Canada’s refugees have more tax return probability in the 1st year, with the highest filing rates
Those new immigrants arriving in Canada as refugees emerged to possess the greatest filing rates of tax returns. This is irrespective of private or government sponsorship. Nearly 95 percent of refugees applied for tax returns after two years of their arrival in Canada.
Contrarily, economic immigrants arriving through the Federal Skilled Worker Program under Express Entry had the least possibility of filing tax returns. Between 2017 and 2019, 77 percent of new immigrants filed taxes. In the same period, FSWP candidates contributed nearly 16 percent of new immigrants who landed in Canada. They were in their prime working age group, 25 to 64 years.
This immigration turned out to be the third-largest after Family Class and Provincial Nominee Programs. In addition, the tax filing rates for the Canadian Experience Class, provincial programs, and Family Class were around 89 percent.
The Statistics Canada study confirmed that refugees had a higher probability of filing tax returns. This was primarily due to their accessibility to settlement services after they arrived in Canada.
Furthermore, it is also because refugees have an increased awareness of accessing the financial advantages of filing a tax return.
Official Languages
Newcomers with Quebec as their province of arrival also indicated a higher filing rate. The study also claims this is due to Quebec’s distinct program for skilled workers and not using the FSWP.
91 percent of new immigrants filed tax returns between 2017 and 2019 among Quebec Skilled Workers. Notably, the study also confirmed that Francophone immigrants had the highest filing rates.
This is evident through the fact that those speaking French are highly likely to come to Quebec as QSWP candidates and not as FSWP candidates.
Quebec is not involved with the FSWP because it has a distinct provincial agreement with IRCC.
Those who arrived as newcomers in British Columbia between 2017 and 2019 have a tax filing rate of 89 percent. 87 percent of them filed in Ontario. This was the lowest rate among all other provinces and territories. Although this 2 percent difference appears negligible, 43 percent of newcomers reported Ontario as their landing province. Overall, after perceiving the ratios, the gap is much more than it appears.
Education
Out of those newcomers who arrived between 2009 and 2012, 13 percent of individuals with graduation degrees have not filed tax returns over the previous five years after their arrival. According to the study, people with high-level skills can access opportunities outside Canada and depart from here. However, it has been observed that its verification is challenging.
Newcomers in Canada – what are the advantages of filing tax returns?
Canada’s government provides ample benefits to those who file income tax returns. For instance, couples having children might qualify for Canada Child Benefit. This indicates the government’s monthly tax-free payment to assist families in managing expenses for raising their kids. In addition, Permanent Residents qualify for the above. Even Temporary Residents who have resided here for a minimum of 18 months are also eligible for the same. Further, their permit must not read “does not confer status” or doesn’t confer temporary residence status” to be eligible.
A few others also involve quarterly GST rebates for residents in Canada who have low incomes. They have access to provincial or territorial benefits based on the provincial residence.
The amount of benefits usually differs on the basis of income, family status, and family size.
Canadian Tax System
Any individual working in Canada comprises an income percentage that gets deducted from the gross salary in the name of income tax. As income tax, this money goes to Canada’s government to cover the expenses of the services it offers its residents. This includes services like education, healthcare, public-funded childcare, and infrastructure.
Annually, any individual residing and working in this country must go for tax filing through the Canada Revenue Agency. When someone files their taxes, the CRA is notified of their whole income from all sources. The CRA then determines whether the taxpayer paid too much tax, which could lead to a refund, or if they did not pay enough. They would be required to provide a payment to make up the shortfall in this scenario.
Do you have any queries on Canadian immigration? Get in touch with our immigration representatives at MakeHomeCanada by writing to us at [email protected].
