Thank you, Mr. Chairman, and I thank you and the committee members for the opportunity to appear before you today.
Our company is the largest assisted tax preparation firm in Canada. During tax season, we have approximately 1,100 service locations, both company and independent franchises, with nearly 10,000 associates operating coast to coast to assist Canadians with their taxes year-round.
As a result of the COVID-19 global pandemic, this tax season has been like no other in Canadian history. Throughout this crisis, H&R Block Canada has remained in frequent communication with the Canada Revenue Agency to ensure Canadians are still able to file.
In the early days of the crisis, our company immediately responded by implementing additional sanitary and social distancing measures in all of our locations. Once the full implications of COVID-19 were announced by public heath officials, H&R Block Canada’s office network transitioned to a national drop-off model, thereby allowing Canadians to safely and securely drop off their tax documents at any of our locations, where they could be prepared and filed by our tax professionals. This approach has allowed us to establish a balance of safety by ensuring social distancing while being able to continue serving Canadians with filing their taxes in a safe and efficient manner.
In mid-April, H&R Block Canada deployed nationwide an “Upload from Home” service that permits Canadians to upload their tax documents to a secure online portal, where their returns can be prepared and filed virtually by our tax professionals, all from the comfort and safety of their homes.
Our upload from home and national drop-off services would not be possible this tax season were it not for the CRA’s willingness to take important steps to permit our industry to better assist Canadians with their taxes during the crisis. For example, in late March, the CRA announced its intention to begin recognizing electronic signatures for the T183 form, which previously had to be signed in person by millions of Canadians every year to authorize tax preparers to file their taxes.
Tax-Filer Empowerment Canada, the leading industry association for Canada’s tax preparation and software industry, has closely collaborated with the CRA and other key government stakeholders to advance the use of electronic signatures in tax filing.
According to government statistics, in the 2019 calendar year, nearly 17.5 million Canadians filed their taxes with the assistance of a tax preparer, representing nearly 58% of the tax-filing population. Taking this into consideration, it is paramount during this time of social distancing and staying at home that Canadians have the option to work virtually with a tax preparer to have their taxes prepared and filed.
Given the breadth of the challenges that our country and the world are currently facing resulting from COVID-19, why is H&R Block Canada investing considerable resources to develop new approaches for Canadians to file and working to raise awareness on the importance of filing?
Simply put, many Canadians unfortunately find themselves out of work as a result of business closures stemming from COVID-19 and need immediate access to financial support. It is now more important than ever that Canadians file their taxes in order to receive their refunds and benefits. In 2019, the average refund received by Canadians was $1,800. This equates to almost one month of full support under the Government of Canada’s new emergency response benefit.
For many Canadians, their tax refund will be a significant financial support to help them manage everyday life through this crisis. It is for this reason that H&R Block Canada has been strongly advocating to provincial governments and the Government of Canada that tax preparation be deemed an essential service. I am pleased to report that as of today, tax preparation remains a permitted service in all provinces throughout Canada.
With under a month left in Canada’s extended tax season, government statistics indicate that at the end of this April, over five million fewer Canadians had filed their taxes compared to last year. It is likely that of these five million, some are lower-income Canadians, particularly since COVID-19 has resulted in the closure of tax clinics throughout Canada. To fill this critical gap, H&R Block Canada recommends that the Government of Canada closely collaborate with Tax-Filer Empowerment Canada and other industry stakeholders to determine how best to ensure lower-income Canadians file their taxes in order to ensure they do not forgo their benefits.
To this end, some initiatives to consider may be a joint government/industry awareness-raising campaign to encourage lower-income Canadians to file. In addition, there may be opportunities worth exploring for industry to work with the federal government to support virtual tax clinics.
The message I would like to leave with this committee today is that Canada’s tax filing system has stood up remarkably well in the face of the COVID-19 global pandemic, and the CRA has been responsive to industry input to implement measures to better assist Canadians with filing this tax season.
We recommend that this committee also support collaborative efforts between the federal government and the tax preparation and software industry to ensure that Canada's most vulnerable are able to file their taxes and receive their benefits in a timely manner.
On behalf of H&R Block Canada, thank you again, Mr. Chair and committee members, for the opportunity to appear.
I'd be pleased to answer any questions that committee members may have.