Over 20 million pages of paperwork for one small tax deduction? Why Canadian employers are calling on the Government to innovate tax filing now.

(OTTAWA) – October 16, 2020 – Patrick Gill, Senior Director, Tax and Financial Policy at the Canadian Chamber of Commerce, today issued the following statement:

“The pandemic has seen a meteoric increase in the number of Canadians working from home, requiring them to equip their new remote offices. Yet it’s not clear whether these Canadians can claim expenses associated with assembling and running home offices this coming tax season.

According to Statistics Canada, 6.8 million Canadians worked from home at one point during the year, roughly 4.7 million more Canadians than usual. An ambiguous definition in the tax code means every Canadian working from home this year could claim their home office expenses. If this happens, tens of thousands of Canadian employers would be required to fill out a three-page form, known as a T2200, 6.8 million times.

The good news is the Canada Revenue Agency (CRA) identified the problem months ago. The bad news is the CRA’s working solution still means millions of pages of paperwork for filing. A simpler approach would be to give employers the option of using one of the “other information” boxes on the T4 to supply the CRA with the information it needs.

Resolving costly and time-consuming paperwork like this could, and should, be an enticing policy win for any government. For relatively little cost and effort, a government could claim real leadership in fostering tax innovation, not to mention proactively identifying and eliminating burdensome administrative processes.

The limitations of Canada’s old-fashioned methods are becoming increasingly obvious as our institutions struggle to address new and evolving challenges. As other countries fine-tune their approaches to so-called “mobile-friendly” government services, Canada is still grappling with the basics of outdated electronic and analog systems.

Business leaders, economists and Canadians have been clear tax reform is a critical element in repairing the economic damage of COVID-19. As a trade-dependent nation, Canadian job creators cannot afford to fall further behind American and European competitors because of an outdated tax structure. If there was ever a time to finally commit to modernizing our tax structure and systems, surely now is the time to get started.”

To learn more about the Canadian Chamber’s efforts to update Canada’s tax system, visit: http://ThinkGrowth.ca

About the Canadian Chamber of Commerce – Because Business Matters

The Canadian Chamber of Commerce helps build the businesses that support our families, our communities and our country. We do this by influencing government policy, by providing essential business services and by connecting businesses to information they can use, to opportunities for growth and to a network of local chambers, businesses, decision-makers and peers from across the country, in every sector of the economy and at all levels of government, as well as internationally. We are unapologetic in our support for business and the vital role it plays in building and sustaining our great nation.

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