Do Canadians really need one tax deadline?
The Canada Revenue Agency announced Tuesday it would be giving Canadians until May 5 to file their personal tax returns due to a bureaucratic blunder. The same extension was offered last year, that time because the CRA was dealing with a data breach due to the Heartbleed computer bug.
Two straight years of unexpected flexibility may not quite be an omen that the rigid Canadian tax system could someday be structured more sensibly. But it does prove the world can march on even without every tax return filed by the last day of April.
The current arrangement is inefficient, not to mention unpleasant. The bulk of the nation’s 28 million individual tax returns are aimed at one single deadline. A more logical system would surely stagger taxfiling dates more evenly over the year. It could base your deadline on your last name, your address, or your birthday.
Instead, the CRA is forced now to hire an army of seasonal contract employees just to deal with a mountain of spring filings. And in most cases, the arbitrary deadline isn’t even necessary.
“For most people it’s irrelevant, because most people don’t owe money,” said Jamie Golombek, managing director of tax and estate planning with CIBC Wealth Advisory Services. “Most people, when they file a tax return, get a refund.” And if you’re owed a refund, there’s no penalty for not filing. You can ignore the deadline.
This year, everyone gets to. After the CRA erroneously issued a notification last Friday reminding tax filers the deadline was May 5 — perhaps copied and pasted from a memo last year — the tax department issued a statement saying it wouldn’t penalize any stragglers as long as they file by May 5.
Caroline Battista, a senior tax analyst with H&R Block, said the employers, charities and financial institutions that have to send out slips to taxpayers in February or early March may not like the pressure that comes with that annual deadline either.
But adapting to staggered deadlines would be even harder. “I don’t know of any jurisdictions that have a staggered deadline,” Battista said. “Does that mean the people with birthdays at the beginning of the year have to pay their taxes sooner? They might not like that.”