Panic season: Canadians scramble to meet tax-filing deadline in the middle of a pandemic
The government is refusing to shift the deadline. Its critics say it's making a stressful time even worse.
In one of the most complex tax seasons in living memory — in the middle of a global pandemic and widespread lockdowns — many Canadians and the tax professionals who help them are scrambling to make today's filing deadline.
The federal government has refused to extend that deadline, as it did last year. Tax preparers say their clients are panicking.
"The anxiety is higher than I've ever seen in the last 10 years that I've been doing this," said Ameet Talreja, who runs a small private accounting practice in Kitchener, Ont.
"Looking at the circumstances, which are worse than last year, I was surprised the government was not able to extend the filing date."
Because of the pandemic, the government extended the tax filing deadline last year to May 31 and subsequently suspended late payment penalties until September. Not this year.
And many Canadians who never before owed Ottawa money on their returns will find themselves owing for the first time ever this year — because they received pandemic relief benefits.
The government has said that those who received benefits and made less than $75,000 won't have to pay what's owed until April 30, 2022.
But if they file late, they will face the normal penalty — 5 per cent of the balance owing, plus an additional 1 per cent for each month after. The CRA says these penalty charges are not included as part of the interest relief offer.
Tax preparers say that if a person knows they'll owe money but can't file by the deadline, they can submit a payment to the CRA and file later to minimize the penalty. That, of course, assumes they can pay up front.
WATCH | Tax advice at the deadline of a complicated season:
The most vulnerable may be most at risk
Tax professionals warn that the people who need the most help — and who can least afford to pay penalties — will be the ones to suffer most from the decision not to extend the deadline.
While many tax services operate online, it's still largely a paper-based process — filers still need to hand over official slips and receipts to their tax preparers. Talreja said a lot of his time this tax season has been spent explaining to clients how to take pictures of their documents to send to him.
Meanwhile, a data breach that locked 800,000 Canadians out of their CRA accounts in March added to the challenge of getting the information necessary to file in a timely way.
Those trying to get through to the CRA on the phone for help report finding it close to impossible.
"I've talked to many constituents who have been on the phone waiting on hold for hours and hours and hours," said Conservative MP Philip Lawrence, the party's national revenue critic.
The Conservatives have called on the Liberal government to extend the deadline by two months, reiterating their plea yesterday in a letter to National Revenue Minister Diane Lebouthillier.
"And if you're late in your tax filing, you have the chance of actually losing your benefits, or at least them being delayed," said Lawrence.
"And those people would be the most vulnerable. It's extremely stressful and in addition to COVID, we're also dealing with a mental health epidemic. We need less stress for Canadians, not more."
Lockdown restrictions pose extra challenges
The logistics of lockdowns in parts of the county have made tax filing even more difficult.
"My clients are concerned that they're not going to get filed on time. We're trying our best, but obviously we started telling people, 'We may not get to you,'" said Gerry Campbell, a tax specialist in Toronto.
Campbell said the lockdown in his region means he has to close each day at 8 pm, when normally he would have extended hours in the lead-up to April 30. And because of pandemic restrictions on indoor capacity, he has line-ups outside his business he's never had before.
And demand for his services is up because more people need help this year to contend with all the new benefit and subsidy programs related to the pandemic.
"My staff last week had over 70 hours of overtime," said Campbell. "I'm sure it's going to be closer to 120 this week."
And then late Thursday, the CRA site that tax professionals use to get access to their clients' tax information, CRA Represent a Client, went down, compounding the challenge of meeting today's deadline. CRA says a routine update to the Canada.ca website temporarily affected access to that portal, as well as the My Business Account portal. It says the issue is resolved now.
The CRA says it needs to keep the deadline as-is to maintain the integrity of the system and to ensure vulnerable Canadians get the help they need.
"Extending filing deadlines for individuals this year would risk interrupting essential credit and benefit payments for millions of Canadians, payments on which thousands of Canadians rely," said the agency in a written statement to CBC News.
The CRA also says that as of April 27, close to 19.6 million tax returns had been filed to the CRA and those filing volumes are consistent with a typical year.
"We strive to be flexible in recognizing the unique circumstances of taxpayers. If individuals are unable to meet their tax obligations due to circumstances beyond their control, they may also request the cancellation of penalties and interest charged to their account."