Thank you, Mr. Chair and other committee members, for the opportunity to appear before you this evening on behalf of H&R Block Canada and our broader industry.
I also serve as co-chair of the board of directors for Tax-Filer Empowerment Canada, the national industry association for Canada's tax preparation and software industry, so I am pleased to also provide their perspective along with my company's this evening.
I'll give you a little background on H&R Block Canada. We are the largest assistant tax preparation firm in Canada. During tax season we have nearly 1,000 service locations across the country, with nearly 10,000 associates operating coast to coast to assist Canadians with their filing obligations year-round.
I am going to provide some brief commentary on Bill C-47 specifically and then finish up with some more general remarks on budget 2023.
Bill C-47 contains some very important legislative provisions that will enable our industry to better serve Canadians with their taxes. Specifically, these provisions include amendments to the Income Tax Act and the Tax Rebate Discounting Act. These will permit approximately 60% of tax filers who do work with tax preparers and accountants to use electronic signatures on certain key tax forms. If these changes pass, that will open the door for Canadians to file their taxes virtually with their preparers and also to potentially receive refund advances in a timely manner, all without having to leave their homes.
We believe the innovations through this legislation could incent more Canadians to file their taxes as we make the process easier for them and could also ensure that they are able to receive their benefits as soon as possible. H&R Block Canada and our industry have long advocated for electronic signatures, and we fully support the timely passage of these amendments in their current form within Bill C-47.
I would like to switch gears a little bit and talk about budget 2023 and take this opportunity to raise some significant concerns with the budget's proposals to expand the role of the CRA to include filing taxes on behalf of millions of Canadians.
I'd like to first touch on how taxpayers would be negatively impacted by the prospect of government directly preparing and filing their taxes. In Canada, we have what's called a voluntary tax compliance system. This system ensures a clear separation of roles between the tax collector and the tax preparer, for the benefit of Canadians. This gives Canadians the right to independently prepare their taxes in order to maximize their benefits and reduce their tax liability to government.
How would this work if the CRA were to start filing taxes for some Canadians? For starters, the CRA would find itself in a major conflict of interest on two fronts. How can the CRA successfully balance maximizing government revenue while also ensuring Canadians get the most back from government coffers?
H&R Block Canada's independence from government tax collection allows us to remain impartial and to fully dedicate our efforts to maximizing refunds and benefits for Canadians, even in the many instances when the CRA feels that they are entitled to less. In fact, our tax professionals frequently advocate for our clients by opposing CRA rulings that seek to reduce the benefits claimed on their tax returns. If the CRA were to file our taxes, would any of us feel confident that the agency would ever advocate against itself with determination equal to that of an independent third party to ensure that we receive all of our benefits and deductions?
Second, how can the CRA function as an effective impartial regulator when it introduces government products and services to market that are in direct competition with the industry it regulates?
The Government of Canada's policy decision to directly file Canadians' taxes runs counter to the successful partnership between our industry and the CRA, which has served Canadians well for decades. While we don't believe that government tax filing can best assist Canadians, we are very supportive of ensuring that low-income Canadians file their taxes in order to get their benefits. This is why our industry offers several low- and no-cost options to Canadians who need them most.
One quick example is that at H&R Block Canada we have our annual Returning Hope program, which supports Canadians who live below the poverty line and who may be experiencing homelessness. These individuals tend to miss out on government benefits or tax refunds because they're unable to file and often do not have a fixed address or bank account. We have been able to partner with 15 non-profit organizations across Canada to prepare tax returns for over 800 Canadians in need and found over $715,000 in missed refunds and credits.
In-depth tax interviews with Canadians in need, conducted by tax professionals at H&R Block Canada, help determine whether these individuals could qualify for the significant disability tax credit and other applicable related benefits. This is something that automated and telephone government tax filing will not be able to achieve and, therefore, a loss of economic benefits to Canadians who need them most would result.
With that, we would conclude by saying that, instead of embarking on more large-scale government IT projects to create automated tax filing and to expand government telephone tax filing, Canadians' needs would be far better served by the CRA meaningfully working with industry to create the conditions needed to support and expand initiatives like H&R Block Canada's Returning Hope program.
Thank you very much. On behalf of H&R Block Canada and our product industry, we're looking forward to questions.