‘Welcome to Canada’ benefit for international students? It’s a myth

Accountant Samarjit Khaira says he came up with the phrase  “welcome to Canada” to describe government benefits that international students are eligible for. Photo courtesy of Samarjit Khaira

By Rhythm Rathi

BELLEVILLE – International students all over Canada have heard about the “welcome to Canada” cash benefit – but there are a lot of misconceptions about it.

The “welcome to Canada” phrase comes from Samarjit Khaira, an accountant in Halton Hills, Ont., who has many international students as clients. He came up with it six years ago, in an effort to encourage clients who were newcomers to Canada to file their income-tax returns even though they weren’t yet employed here.

The reason is that newcomers are eligible for federal and provincial benefits – sales-tax credits and the Trillium Benefit – which can only be claimed by filing a tax return. The credits range from about $200 to about $700 a year.

But many international students don’t realize that in the process of claiming these benefits, they’re filing a tax return.

Rashi Rane, 22, from Mumbai, India, currently enrolled in the supply-chain management and global logistics program at Fleming College in Peterborough, applied for the “welcome to Canada” benefit after spending six months here.

“I came in December 2019 to Canada, and I must have applied maybe in June or July of 2020,” Rane told QNet News on Wednesday.

It was friends who were also international students who suggested she apply for it, she said.

“I live in a student house with other students and … graduates from Fleming and Trent (University),” she said. “They mentioned it casually, that ‘Why don’t you apply for it? You’ll get some money.’ ”

Rane contacted an accounting firm and “I mentioned that I wanted to apply for ‘welcome to Canada tax’ and they told me the details: that we would need certain documents, and this would be the timing, and you can expect this much amount. And that’s how it went.”

The accountants didn’t explain that she would be filing an income-tax return, she said.

“Everybody around me, whoever I have spoken to about this, just thinks it’s free money coming from the government,” said Rane. “Nobody understands the depth or where exactly this money is coming from.”

Ravi Inder Singh Meet, from Punjab, India, who’s enrolled in the global business management program at Loyalist College, applied for the benefit recently after learning about it from friends. While Meet understood that he was filing a tax return, he said, his friends led him to believe that the “welcome to Canada” benefit was something separate – an extra bonus.

“There is a sudden air all around that it is (a) ‘welcome (to) Canada’ ” payment from the government, he said, adding that he now understands how it works.

Khaira, 30, explained how he came up with the “welcome to Canada” idea: “I was sitting with a bunch of new clients. They were international students and they had come to me to file their taxes. And I was explaining it to them, how they could file for the previous year” even though they had been in Canada for only a short time that year and had not worked here during that period.

“I was explaining how they are eligible for the GST/HST credits, as well as the Trillium Benefit” for the previous year. “And as a newcomer it’s hard to grasp all of that. I felt like, ‘I need to simplify this and lay this out in layman’s terms.’ So I said, ‘If you apply for the previous year as well, you’ll be eligible for extra credits.’ ”

Someone said,  “So it’s like a ‘welcome to Canada’ thing,” said Khaira. “That just really struck a chord with me, and I was like, ‘You know what? That’s exactly what it is.’

“I started using that term … and now I have clients who I am doing taxes with for the first time, and they call me and say, ‘Can you apply for my “welcome to Canada” tax?’ ”

Khaira said he has got several clients thanks to the term, because other accountants have told international students that nothing like that exists. It is a popular term in the international student community, even though nothing like a “welcome to Canada” bonus actually exists, he said.

“It may be someone who did their taxes with me and told his friends,” said Khaira. “It just spread like wildfire. We have a client base from B.C. to P.E.I., and this term is really a national phenomenon. 

“It was just a promotional strategy. I had to dumb it down a little bit instead of throwing heavy terms like ‘GST/HST’ at people who have just been in the country for two or three months.”

Khaira advises that everyone should be aware of what they apply for and receive from the Canada Revenue Agency, and not fall for phone or online scams that mention the “welcome to Canada tax.” There have been cases where scammers have targeted international students pretending to be CRA agents and asked them to provide their social insurance number so they could get the “welcome to Canada” benefit.

There is no such thing in the CRA’s books as the “welcome to Canada tax,” and the agency will never call people about it, Khaira said.

Paul Murphy, a Canada Revenue Agency spokesperson, confirmed that there is no such benefit.

“There are several federal and provincial benefits and credits that are tied to filing a tax return, but that’s not one of them,” said Murphy. “I can go through the list with you … but there is no ‘welcome to Canada.’ ”

The main benefits that international students receive are GST/HST credits that are paid out quarterly for modest-income residents to compensate for the tax they pay to buy goods, Murphy said. If they file their tax return as a resident of Ontario they also receive the Trillium Benefit.

Murphy also confirmed that the agency does not issue penalties or demand money via phone. Taxpayers are subject to financial penalties only when they owe taxes and miss the April 30 deadline to file.