Why filing taxes is an important first financial step

It wasn’t just the thought of “losing” part of my hard earned money; that worry was soon over. What stayed with me was the fear of making a mistake—misunderstanding the rules, making a mistake and getting in trouble for something I didn’t fully understand.

I remember having a conversation before we moved, when someone asked if I was happy about paying taxes in Canada. I laughed, but underneath, I was depressed. And I was alone.

According to recent data, nearly 90% of new Canadians file their taxes within their first year or soon after arriving, which is encouraging. But the most telling statistic is this: TD’s 2025 survey found that 76% of newcomers fear making mistakes on their tax return, and more than half find the process too difficult.

Even with high participation, there is a clear gap between doing and understanding. I felt that space myself.

A few months after we arrived, I filed my first Canadian tax return. It wasn’t perfect. I leaned on help, asked questions, and tried to make sense of what I was doing. But something changed in that process. For the first time, I began to understand not only how the system worked, but what it was doing for us.

It’s not just a tax return, it’s your entry point

Many people think of filing taxes as an obligation. In Canada, it’s more than that. Filing your taxes is how you get into the financial system. It is how you establish yourself, not just as a resident, but as an active participant in the country’s economic structure. It determines what you qualify for, what help you can get, and how your financial life starts to take shape.

Before immigrating to Canada, I had never heard of things like the Canada Child Benefit. The idea of ​​families receiving financial support based on income to help raise children was new to me. The same goes for EI, the insurance program that people pay into to support them if they lose their job.

Then there are the less obvious benefits: RRSP contributions that lower your taxable income, credits that support low- and moderate-income households, and access to programs and services that are, in some way, included in your tax bill.

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I was also impressed by the tangible results: well-maintained parks, accessible libraries, publicly funded education, and a health care system, albeit imperfect, built on the idea of ​​access.

For the first time, I saw the connection between what you give and what you get. Paying taxes stopped feeling like a loss and started feeling like a contribution.

The system works, but it assumes you understand it

Canada has built a system designed to support its residents and citizens, but it assumes something that isn’t always true: that it understands how it works. For many newcomers, it is not.

Statistics Canada data shows that tax filing is an important part of how newcomers participate in the system, yet many still rely on friends, family, or informal networks to get around. Some use the help of technology, while others try to find out on their own.

That creates conflict and danger—not necessarily making big mistakes, but misses. No credits. Non-existent benefits. Missed opportunities to manage your money effectively.

There are technical complications that are not accurate. Understanding your residency status for tax purposes, knowing what income needs to be declared and when, or rules of thumb like the “90% rule” are not things you naturally know if you didn’t grow up in the system. However, they matter. Because filing your taxes is not just compliance; it’s about access.

Why this step is more important than anything else

In many ways, filing your taxes is the first real financial decision you make in Canada. Before you even think about investing, buying a home, or getting a construction loan, you file.

And that one action starts a chain reaction. It determines your eligibility for benefits, establishes your financial profile, and becomes part of the documents you’ll rely on for everything from renting a home to applying for a loan.