Question Period Note: Canada Workers Benefit

Introduction of the Canada Workers Benefit (formerly the Working Income Tax Benefit [WITB])

• To improve access to the Canada Workers Benefit, the Government is now automatically determining whether tax filers are eligible for the benefit even if they do not claim it.
• This will have an impact on an estimated 300,000 additional low-income workers.
• Budget 2019 provided the CRA with $4 million over two years, to conduct targeted outreach to give low-income workers improved access to the CWB throughout the year and increase awareness of the CWB, including the little-used advance payment provision.
• Introducing the CWB and improving access to the benefit will support low-income individuals and families and, in particular, will help support vulnerable populations such as single mothers—a group with relatively low employment rates and an elevated risk of living in poverty.

• The Canada Workers Benefit (CWB, formerly the Working Income Tax Benefit [WITB]) is a refundable tax credit that supplements the earnings of low-income workers. By letting low-income workers take home more money while they work, the benefit encourages more people to join and remain in the workforce, and currently offers real help to Canadians who are working hard to join the middle class. The CWB is legislated under the Income Tax Act.
• More than 2 million working Canadians will benefit from the strengthened and enhanced CWB for the tax year 2019, up from 1.47 million recipients in 2016, the latest year for which data is publicly available for the WITB, the previous version of the CWB.
• First introduced in the fall of 2005, the WITB has evolved over time.
o In 2016, the Government announced a $250 million enhancement of the WITB, starting in 2019, as part of the enhancement of the Canada Pension Plan.
o In the 2017 Fall Economic Statement, the Government committed to further enhance the WITB by an extra $500 million annually. This put more money in the pockets of low-income workers, and gave people a little extra help as they transition to work.
• The CWB is generally paid once a year. The Canada Revenue Agency (CRA) is now automatically determining whether tax filers are eligible for the benefit even if they do not claim it. This ensures that all eligible low-income workers are receiving the CWB payment that they are entitled to.
• CWB eligible recipients currently have the option to apply for, and receive up to four advance payments of up to a maximum of 50 percent of the benefit, including the disability supplement if applicable, that they expect to claim on their next income tax return. The advance payment option has had low take-up.
• Budget 2019 provided the CRA with $4 million over two years, starting in 2019–20, to conduct targeted outreach to give low-income workers improved access to the CWB throughout the year and increase awareness of the CWB, including the advance payment provision. This new funding will also be used to allow low-income workers to apply online for advance payment of the CWB through the CRA’s My Account portal. As stated in Budget 2019, the Government will continue to look for ways to improve the CWB and support more Canadians working hard to join the middle class.

• Budget 2019 also amended the Income Tax Act to clarify that an individual may be considered to be the parent of a child for the purpose of the CWB, regardless of whether they receive financial assistance from a government under a kinship care program, provided they meet the eligibility requirements. This measure applies for the 2009 and subsequent taxation years.
• Looking forward, Budget 2019 commits to determine what investments are required to support the delivery of the CWB, while reducing the paper burden for eligible workers, and to further improve the CWB and support more Canadians working hard to join the middle class. As announced in Budget 2018, starting in the 2019 tax year, an unattached worker will receive a maximum benefit of up to $1,355, an increase from $1,192 and couples or single parents will receive up to $2,335, an increase from $2,165.
• The maximum benefit provided through the CWB disability supplement was also increased by an additional $160 to offer greater support to Canadians with disabilities who face financial barriers to entering the workforce. As a result of these enhancements, a low-income worker earning $15,000 a year will receive up to nearly $500 more from the program for the 2019 tax year than he or she received in 2018.

• A single parent earning $25,000 a year and claiming $2,500 in child care expense deductions will receive almost $1,700 from the CWB for the 2019 tax year – an increase of more than $600 from 2018.
o To improve access to the CWB, the CRA will automatically determine whether tax filers are eligible for the benefit even if they do not claim it. An estimated 300,000 low-income workers will receive the new CWB for the 2019 tax year as a result of these changes.

• It is estimated that the enhancement and improved take up will help lift approximately 74,000 Canadians out of poverty.

• As part of Budget 2018, our Government introduced the new Canada Workers Benefit (CWB), a refundable tax credit that helps supplement the earnings of low-income workers, by letting them take home more money while they work.
• More than 2 million working Canadians will benefit from the strengthened and enhanced CWB for the tax year 2019, up from 1.47 million recipients in 2016, the latest year for which data is publicly available for the WITB, the previous version of the CWB.
• The CWB will help low-income workers take home more money while they work—up to nearly $500 more for a worker earning $15,000 in 2019.