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BMO Harris Private Banking

BMO Harris Private Banking

April 29, 2011 09:00 ET

REPEAT-BMO Tax Season Study: Majority of Canadians Will Use Refunds to Pay Down Debt or Invest

- Overwhelming majority (95 per cent) will file their returns before or by the April 30th deadline

- Most Canadians (84 per cent) want a more simplified tax system

- Men are more likely to use their refunds to invest than women

TORONTO, ONTARIO--(Marketwire - April 29, 2011) - With the 2010 tax deadline less than 48 hours away, BMO Harris Private Banking today released the results of a survey revealing that more than half (56 per cent) of Canadians will do the responsible thing this year and use their refunds either to pay bills and credit card balances or invest.

Nine per cent will use their refunds for travel and leisure items, while another nine per cent will put the money towards home renovations. According to the Canada Revenue Agency, the average tax refund exceeded $1,400 for the 2008 tax year.

The study also found that an overwhelming majority of Canadians (95 per cent) plan to file their tax returns either before or by the April 30th deadline.

"This tax season, it's all about doing the responsible thing," said Sara Plant, Vice-President and National Director, Wealth Services BMO Harris Private Banking. "These results really speak to the character of Canadians and the importance they place on financial responsibility."

Ms. Plant points out that having a financial plan in place that incorporates effective tax planning and management will help ensure investors are maximizing their financial returns and avoiding costly fines and unwanted surprises come tax time.

How would Canadians change the tax system?

The study, conducted by Leger Marketing, also examines Canadians' views on the current tax system, including changes they would like to see in the future. For example:

  • 84 per cent are looking for a more simplified tax system
  • More than three-quarters (76 per cent) would like more tax incentives for home ownership/renovations
  • Over two-thirds (69 per cent) are interested in more family-friendly tax incentives
  • 62 per cent would like to see a reduction in capital gains tax
  • More than half (57 per cent) would like to move to a flatter tax model

Other key findings from the survey include:

  • Men are more likely than women to use their tax refund to invest in a Registered Retired Savings Plan (24 per cent versus 17 per cent)
  • Most Canadians (64 per cent) agree that social benefits payments should be delivered through their tax return (this includes fitness credits and child care benefits)
  • Older respondents are more in favour of simplifying the tax system, reducing capital gains and adding more tax incentives for home ownership/renovations

The online survey was conducted by Leger Marketing from March 28 – March 31, 2011, with 1501 Canadian adults.

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