Low- and modest-income Canadians would benefit from better access to financial advice and counselling, including help with filing tax returns, according to Prosper Canada, a Toronto-based charity dedicated to promoting economic opportunities for those living in poverty.
“We need to make sure that people who can’t afford to pay professionals have access to that assistance too,” Elizabeth Mulholland, CEO of Prosper Canada, said in an interview. “It makes even more difference to them because they’re already dealing with small amounts of income.”
On Friday, Prosper Canada submitted a proposal to the Department of Finance Canada asking Ottawa for $20.7 million over five years to fund its Financial Empowerment Champion (FEC) program, which supports community organizations that provide financial education, tax-filing assistance and money management coaching to “financially vulnerable” Canadians.
The request, made as part of Finance’s consultation process for the 2020 federal budget, would renew the government’s support — otherwise scheduled to end this October — for five existing FEC organizations, and extend the program to an additional 15 FECs across the country. According to Prosper Canada’s proposal, the money would allow the FECs to deliver local services to more than 550,000 low- and modest-income Canadians and help them claim an estimated $1 billion in income benefits.
“[These are] funds that should be flowing to some of the lowest-income people in the country,” Mulholland said.
The federal government has taken steps in recent years to make sure low- and modest-income Canadians can get help with tax filing by funding the Community Volunteer Income Tax Program. Ottawa has also begun automatically enrolling eligible Canadians for certain tax benefits, including the Canada Workers Benefits, rather than having them apply.
Mulholland praised these initiatives, but said that a gap remains in reaching low-income Canadians, particularly those living with mobility issues, in remote areas and on reserve. “We need to close that last mile,” she said.
Helping low-income Canadians file returns, including returns from previous tax years, can sometimes result in those individuals receiving significant tax refunds, Mulholland said. That, in turn, can create opportunities to deliver additional financial advice and counselling on topics such as debt repayment, establishing an emergency fund and setting up an RESP.
“It’s a golden moment to engage them,” Mulholland said. “Once they’re out of survival mode, you can start to have those conversations.”