Many new immigrants to Canada believe that Canadians pay too much in taxes, according to research conducted by the Canada Revenue Agency. The report titled “Qualitative Research On First Time Tax Filing With Newcomers To Canada” reveals that newcomers often perceive the Canadian tax system as expensive and an integral part of living in Canada. They feel that the tax on goods and services adds up quickly, making life in Canada costly. Additionally, they highlight a significant difference between net and gross pay, which further contributes to their perception of high taxation.
The report also states that newcomers, who often earn little or no income in their early years in Canada, emphasize the importance of keeping as much of their income as possible. They express concern about any deductions related to goods and services tax or income taxes. Another preconception among immigrants is that preparing and filing taxes would be extremely complicated.
Furthermore, immigrants raise issues about the confusing information provided by the Canada Revenue Agency, the unclear and daunting rules, and the use of unfamiliar terminology by the government. The researchers note that while there is an assumption of a common understanding of these terms, newcomers’ lack of experience with tax filing complicates matters.
However, the report highlights that newcomers to Canada understand the value of taxes for the quality of life in the country. They accept their responsibility for filing income taxes, considering taxes to be an integral characteristic of living in Canada based on the experiences shared by family or friends who immigrated earlier. Immigrants also recognize that taxes are necessary to fund important services such as schools, hospitals, and libraries.
Newcomers perceive Canada’s tax system as transparent and accountable. They are content with paying taxes because they can see and enjoy the benefits, something they may not have experienced in their home country. The report’s findings are based on focus group discussions with immigrants, and the Canada Revenue Agency commissioned Environics Research to conduct the study, for which they paid $57,969.
According to the OECD report “Taxing Wages 2023,” Canadians’ take-home pay averages 74 cents for every dollar earned after taxes. It should be noted that the figures in the report do not account for property taxes or the Goods and Services Tax (GST).