The federal government’s plan to expand automatic tax filing would cost taxpayers about $340 for every simple tax return processed, according to a new report from the Parliamentary Budget Officer.The Canadian Taxpayers Federation (CTF) is urging Prime Minister Mark Carney to scrap the initiative, arguing Ottawa is creating an expensive bureaucracy to provide a service that is already available for free.“The government is taking millions of dollars from taxpayers every year to provide a service that Canadians can already access for free outside government,” said CTF federal director Franco Terrazzano.“It’s outrageous that taxpayers are paying $340 to file simple returns for each person when there’s already free software and even professional accountants cost less.“Only the government would take a free service that’s already being offered and turn it into a multi-million-dollar bill.”The automatic tax filing expansion was announced in Budget 2025.According to the PBO report released Thursday, administering automatic tax filing for 50,000 Canadians with “simple tax situations” would cost taxpayers $17 million annually.That works out to $340 per filer..The CTF noted that some accounting firms charge as little as $100 to prepare a simple personal tax return. Even more complicated returns involving investments, rental properties or self-employment income can cost as little as $300.The federation also pointed out that free tax software is already available for Canadians with straightforward tax situations.Tax-Filer Empowerment Canada echoed those concerns.“Most of the 5.5 million people targeted by [Carney’s] announcement are already receiving their benefits, often filing their taxes through free industry software,” the group stated.“This means taxpayers will now subsidize tax-filing for people who already have free options.”The debate comes as the Canada Revenue Agency continues to grow.The CRA currently employs 52,499 bureaucrats, an increase of 13,015 employees since 2016 — a 33% increase.For comparison, the U.S. Internal Revenue Service employs 95,226 people despite serving a population roughly nine times larger than Canada’s.According to the CTF, the CRA has approximately one bureaucrat for every 800 Canadians, compared to one IRS employee for every 3,500 Americans.“Carney should be looking for ways to make the CRA smaller and more efficient, he shouldn’t be piling on more costs to taxpayers,” Terrazzano said.“If Carney wants to make life more affordable and tax season easier, he should cut taxes and simplify the tax code.”The federation also highlighted the size of Canada’s tax system, noting the Income Tax Act spans roughly 3,800 pages — about the same length as the entire seven-book Harry Potter series.
