Try Fund Library Premium
For Free with a 30 day trial!
Earlier this year, a friend asked for my help to create her personal “My Account” on the website of the Canada Revenue Agency (CRA). The main purpose was to obtain the exact amount of contribution room available in her Tax-Free Savings Account.
It was not an easy process. My friend isn’t very computer literate, and she had to search for some of the information requested by the CRA, such as the amount shown on a specific line on her 2024 tax return. The result was repeated system timeouts.
But finally it got done, and she retrieved the information she was looking for. She made a TFSA contribution based on the amount shown in her personal My Account.
Now it turns out that number may have been wrong. Investment Executive reported recently that there was a delay in updating TFSA information on the CRA website this year. The figures are normally updated by April, but this year many people had to wait until June for final numbers and 10% waited even longer.
So, my friend may have contributed the right amount to her plan – or not.
If she overcontributed, she faces a penalty of 1% a month on the excess. According to Investment Executive, the CRA assessed $166.2 million in overcontribution fees in 2024. That figure could balloon this year due to the technical glitch. Some financial advisors have asked the CRA for leniency, given the situation. So far, no reply.
Here’s another story. Last year, I spent several hours preparing an application for the disability tax credit for a family member. He suffers from a severe debilitating disease that has affected his mobility, speech, cognitive function, and the ability to dress himself. Anyone who has completed this application, which includes having a doctor sign off, knows how time-consuming it can be.
Finally, I pulled it all together and sent it off to the Sudbury tax office. Months went by and there was no response. When it came time to file the 2024 tax return, we claimed the credit. It was denied.
As a result, I went through the whole process again this year and sent off another application by registered mail. That was a few weeks before CUPW went on strike again. I have heard nothing – not even an email acknowledgement of receipt. Talk about frustrating!
Another issue confusing tax professionals and filers is bare trusts, which can be as simple as a parent-child joint account. The CRA had announced new regulations for reporting income from these trusts for the 2023 tax year. Then, at the last minute, the agency withdrew the requirement – too late, as in many cases the work had been done.
That led to a review by Taxpayers’ Ombudsman Francois Boileau, which, as reported by CBC, concluded the whole process resulted in “wasted time and effort” by the more than 40,000 people who filed T3 returns.
“The bare trust exemption meant that all of the bare trusts who had already filed did so for no reason, and in many cases at great expense,” Mr. Boileau's report said. “Taxpayers and representatives should not have been left to spend months trying to understand the legislation when the CRA ultimately exempted bare trusts from the filing requirements,” he added.
It doesn’t look like things will improve any time soon. The CRA, like all Federal Government departments, is faced with budget cuts that will mean a spending reduction of $715 million by the 2028-29 fiscal year.
Already almost 3,300 call centre employees have been laid off since May 2024, according to the Union of Taxation Employees. As a result, the union says that fewer than 5% of callers to the CRA reach an agent. That union claim may be self-serving, but anecdotal evidence I’ve heard and read in recent years confirms there is a real problem here.
I have no objection to paying taxes. It’s the price we pay for the services our governments provide, from health care to infrastructure. But I don’t think it’s unreasonable to expect the CRA to operate efficiently and to provide people with correct information in a timely manner.
The service we have now is simply not acceptable.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on X at X.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
For more information and details on how to subscribe to Gordon’s newsletters, go to www.buildingwealth.ca/subscribe.
Notes and Disclaimer
Content © 2025 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
Image: iStock.com/cyano66
Try Fund Library Premium
For Free with a 30 day trial!
Fund Library
