It’s an acknowledged fact that the cost of living has been on a steady upward trend for the past several years. Making that trend even more problematic is the reality that such cost increases have been greatest in areas where eliminating or cutting back on expenditures is hardest. Food prices, especially, have increased significantly. According to Statistics Canada’s research, “as of July 2025, Canadians were paying 27.1% more for food purchased from stores than they were in July 2020”.
Notwithstanding the fact that Canada has a publicly funded health care system, the reality is that each year millions of individual Canadians incur medical and para-medical expenses (like prescription drug costs) which can be significant and which are not covered by that public health care system. Absent a private health insurance plan which provides reimbursement for such expenses, they must be paid for on an out-of-pocket basis.
For individual Canadians, one of the few positive aspects of the recent pandemic was the opportunity it provided to work from home – first as a mandated public health necessity and later as a choice provided by employers. For most employees, working from home was a welcome option which provided better work-life balance and a break from the cost and aggravation of the daily commute. In addition, having a work-from-home arrangement allowed employees to claim a tax deduction for costs (like home heating and other utilities costs, internet access, etc.) which they would have had to incur in any event. For most employees, working from home was a win-win situation.
Canada’s tax system is what is known as a “self-assessing” one, in which taxpayers are expected (in fact, in most cases, required) to take the initiative to prepare and file an annual tax return by a specified deadline, to report all taxable income on that return, claim allowable deductions and credits, and pay any balance of income tax owed for the year.
