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Writer's pictureArisnel Mesidor, M.A., RCIC-IRB

Exploring the Dynamics of Tax Filing Among Newcomers in Canada


Tax filing

The tax-filing habits of immigrants are a valuable indicator of their integration into a new society. This crucial aspect of the immigrant experience in Canada has seen notable trends and variations, as highlighted in a recent study using the Longitudinal Immigration Database, spanning from 1993 to 2019.


The study unveiled a compelling narrative: an overall enhancement in tax-filing rates was observed from the mid-1990s to the late 1990s, stabilizing thereafter. As of 2019, approximately 90% of immigrants who arrived in Canada between 2017 and 2019 filed their taxes within a year of landing, a significant increase from the 83% observed among those who landed between 1993 and 1996. This pattern underscores the evolving nature of immigrant engagement with the Canadian tax system over time.


Diving deeper into the demographics, a striking pattern emerges. Refugees consistently exhibited the highest propensity to file tax returns immediately upon arrival in Canada. This trend might reflect their higher awareness of financial benefits available through settlement services. In stark contrast, immigrants entering Canada under the Federal Skilled Worker Program demonstrated the lowest filing rates. Intriguingly, immigrants with graduate degrees also displayed a tendency to delay tax filing compared to those with lower educational attainment. These trends hint at a complex interplay of factors including awareness of financial benefits, access to settlement services, and perhaps differing career trajectories.


When examining immigrant couples, particularly those with children under 18, they were more likely to file tax returns compared to other immigrant couples, especially before 2009. However, this disparity in filing rates narrowed in the following years, suggesting a shift in awareness or circumstances affecting these groups.


These findings are instrumental in understanding the tax-filing behaviour of Canada's immigrant population. They not only reflect the socioeconomic integration of immigrants but also highlight the role of tax filing in accessing government benefits. This knowledge is crucial for shaping policies and support systems for new Canadians.


However, it's important to note the limitations of this study. Factors like family dynamics upon landing and the international emigration of immigrants present challenges in accurately capturing the full picture of immigrant tax-filing behaviour. Future research, integrating additional data sources like the Census of Population, could provide more nuanced insights into these trends.


References:

  1. Tax-filing rates of newly landed immigrants in Canada: Trends and insights: https://doi.org/10.25318/36280001202301100004-eng

  2. Statistics Canada study on immigrant tax-filing: https://schindlerconsulting.us19.list-manage.com/track/click?u=9fc8b1bff633310f5215a381a&id=d9253baff2&e=cd4fbf08ec



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