Direct Deposit of Canadian Tax Payments

Payment by Direct Deposit
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The government of Canada has been pushing to phase out the use of paper checks for government payments. Those who haven't yet enrolled in direct deposit can still receive paper checks, but the government is trying to move as many people as possible to the electronic option. It's an optional (but strongly recommended) perk for anyone receiving government checks of any kind.

The Canadian government began its campaign to convert people to the direct deposit option beginning in 2012. It estimated that the cost of producing a check was around 80 cents while making a direct deposit payment costs the Canadian government about 10 cents. Government officials said they expected to save about $17 million annually with the conversion to direct deposit, and it would be a "greener" option as well.

Government checks are still being sent by mail in Canada to people living in remote areas where there is little or no access to banks. The rest of the approximately 300 million government payments are being delivered via bank direct deposit. Like with payroll direct deposits, the funds from Canadian programs are made available immediately upon the issue, instead of the recipient having to wait for the check to arrive in the mail.

The Canada Revenue Agency (CRA) handles payments for a variety of different programs, and all are eligible for direct deposit payments. The list includes:

Change in Personal Information

There are several ways Canadians can request direct deposit of these payments or to inform the CRA of a change in their bank or mailing information, which is required. You can use the My Account Tax Service online or send your income tax return by mail. Canadians can complete a Direct Deposit Enrollment form at any time, and send it via the mail.

If you prefer to update your information by phone, call 1-800-959-8281. You can get help completing the direct deposit information, starting or canceling the service, changing your banking information or adding other payments to an existing direct deposit account.

Notify the CRA as soon as possible about a change in address or your payments, either by direct deposit or mail, may be interrupted. You must also notify the CRA as soon as possible if you change your bank account. Do not close the old bank account until you have received a payment in the new one.

Direct Deposit Not Required

When it first began the push toward the direct deposit, there was some confusion about whether it was going to be required for Canadian government payments. But those who prefer to receive paper checks may continue to do so. The government won't be phasing out paper checks entirely. If you're not interested in the program, simply don't enroll.

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Munroe, Susan. "Direct Deposit of Canadian Tax Payments." ThoughtCo, Feb. 16, 2021, Munroe, Susan. (2021, February 16). Direct Deposit of Canadian Tax Payments. Retrieved from Munroe, Susan. "Direct Deposit of Canadian Tax Payments." ThoughtCo. (accessed May 7, 2021).