A study estimates that using invoice data to prepare returns could sharply reduce tax-reporting costs, especially for smaller businesses.
Canadian businesses currently prepare their own goods and services tax and harmonized sales tax returns. The study examines a system that would use information from national electronic invoicing to prefill those returns, an approach already used in some European Union and Latin American countries.
The researchers estimate CAD 14.3 billion in compliance-cost savings for registered businesses over 10 years, measured as present value. After accounting for implementation costs, the estimated gain for the wider economy is CAD 13.6 billion. The analysis also estimates a CAD 2.6 billion net gain for governments and an approximately CAD 11 billion after-tax gain for Canadian businesses.
Estimated savings and gains
The study estimates that a Canadian system of prefilled goods and services tax and harmonized sales tax returns would produce CAD 14.3 billion in compliance-cost savings for registered businesses over 10 years. More than 99% of those savings would go to more than 3.7 million medium-sized, small and self-employed businesses.
After estimated implementation costs are deducted, the projected improvement in economy-wide welfare is CAD 13.6 billion. The reduction in business costs is also estimated to increase income-tax collections, resulting in a net government gain of CAD 2.6 billion after costs. The estimated net after-tax gain for Canadian businesses is approximately CAD 11 billion.
Why the estimate matters
Small and medium-sized businesses face disproportionately high costs under the current reporting system. The analysis suggests that prefilled returns could direct most of the savings to these businesses while also producing a positive budgetary effect for both federal and provincial governments.
Canada has not adopted this system. The findings therefore provide an estimate of the potential economic and government effects of a policy change, rather than a measure of results from an operating Canadian program.
Evidence and caveats
The researchers used an integrated financial, economic and stakeholder cost–benefit analysis. This is a modeled estimate based on projected savings, implementation costs and tax effects, not an evaluation of a Canadian prefilled-return system in operation.
The abstract does not provide the analysis’s underlying assumptions, such as the detailed implementation costs or how quickly businesses would adopt the system. The reported figures should therefore be understood as estimates whose results depend on those model inputs.
// Source
Journal of Benefit-Cost Analysis · 2026 · DOI: 10.1017/bca.2026.10056
Authors: Foroogh Nazari Chamaki, Glenn P. Jenkins, Frank Milne
Institutions: Queen's University, ARC Resources (Canada)
