As bills pile up, Canadians are increasingly relying on their tax return to help with everyday expenses

According to recent survey data, 40% of Canadians are relying on their tax refund to help cover rising cost-of-living expenses this year, with another 28% planning to use it for everyday essentials. This is especially pronounced among younger Canadians, with 53% of Gen Z and 48% of Millennials saying they’ll use their refund this way, compared to 40% of Gen X and just 17% of Baby Boomers.

The findings align with data collected in December 2025 about how Canadians feel about rising costs, with 67% saying the cost of living feels as bad as they can ever remember it.

Tax refunds no longer a bonus

Stefanie Ricchio, CPA and spokesperson for TurboTax, says the shift in how Canadians view their refunds has been noticeable.

“Historically, we had individuals who were getting tax refunds and people would think of it as a bonus,” she told Money.ca. “I’m going to take a trip, or buy that big-screen TV.”

That’s no longer the case for many households.

“I think there’s just a general sense of feeling unsafe or not secure,” Ricchio said. “That lack of stability… has altered everyone’s desire to have more discretionary spending, and also just to cover some of the everyday essentials that are increasing year over year.”

Those essentials are adding up. Ricchio noted that housing costs, utilities and groceries are among the most common pressures facing Canadians. And it’s true that while inflation has come down from the elevated levels seen earlier this decade, the cost of daily necessities remains high. Food and housing costs have risen sharply and remain high compared to pre-pandemic levels (2).

It’s no wonder that these rising costs are pushing a growing numbers of Canadians rely on their tax refund to balance their finances.

What is a tax refund, really?

Tax refunds can feel like an annual bonus. In reality, it’s mostly money you’ve overpaid in taxes throughout the year.

That raises a question: should Canadians be relying on a lump sum payment to cover essential household expenses?

From a budgeting perspective, some financial institutions suggest it may make more sense to have that extra money available throughout the year rather than waiting for a one-time payment (3).

Matching your payroll deductions with your actual tax liabilities throughout the year could increase your monthly cash flow. But for many Canadians, paying the extra taxes every two weeks acts as a form of forced savings.

“For some people… knowing that a refund is coming gives them a sense of security,” Ricchio said, noting it can also help cover large fixed expenses like property taxes or insurance payments.

Many Canadians worry they may be missing tax credits

As tax refunds grow in importance, so does making sure you maximize them.

Survey data shows that 58% of Canadians worry they may be missing credits or deductions when filing their taxes, and this number rises to 70% among Gen Z.

Canada’s tax rules include around 400 different credits and deductions that range from medical expenses and tuition costs to charitable donations.

In terms of tax credits that people often overlook, “medical expenses are always at the top of the list,” Ricchio said, adding that Canadians often underestimate how quickly those costs add up or fail to keep proper records.

If you have medical expenses throughout the year that aren’t covered by private or public insurance, hold on to all of your receipts and supporting documentation (the CRA can ask to see it) and make sure you apply to get any credit back that you are entitled to. You may be surprised how much you can recoup.

Filing your taxes unlocks key benefits

Ricchio offers two key pieces of advice when it comes to taxes: don’t procrastinate and make sure you actually file a return. While the latter may seem obvious, it’s important to realize submitting a tax return is essential to receiving a host of government benefits.