In December, 2014 Canada Revenue Agency announced that starting January 1, 2015 all federal refunds and benefits would be deposited directly into recipients’ bank accounts. Given the reduction in delivery services by Canada Post, the possible loss of cheques in the mail or stolen from outside mail boxes, and other eventualities, this is probably a convenience for most people. But not all. There is a sizeable number of Canadians who – for personal reasons – prefer to receive that cheque; or are in circumstances where they are homeless, or transient without a permanent address, possibly trying to deal with serious financial or health problems. There are community service organizations trying to deal with this, but they are limited in how they can make sure benefits are always received by eligible people. In some circumstances they act as trustees, providing an address, and keeping cheques safe for the recipient. However, these are not solutions which can solve the problems of those who are unable to actually acquire and maintain a bank account
CPP, OAS and GIC payments are also subject to the same rules. However, the two departments – CRA and Service Canada – do not exchange the kind of information that would allow Canadians to register once for both departments. While many people already have this arrangement, if you don’t – for both or either – it will have to be done on-line, by phone or my mail. Mail is the slowest, up to three months to get that information into the system; the other options are almost instantaneous. Just make sure you have the number of the bank account. Banks have forms, or you can simply provide information for the account you choose, either chequing or savings. The phone number for CRA is 1-800-959-8281 and for Service Canada, it is 1-800-277-9914. When trying to reach any government department, patience and persistence are requisites. Best time to call is early morning, accompanied by a tall cup of coffee or the beverage of your choice. If you prefer to use the online CRA service you can register and then log into My Account.
The system will take time to roll out, but Service Canada confirms that the deadline is actually April, 2016. No-one knows at present what will happen to money owing Canadians who don’t comply. But that is a problem that will have to be faced.
The CRA assures us that registering for direct deposit does not authorize the CRA to withdraw money you might owe the CRA. You can choose an existing account or set up a new one in any financial institution you choose, but don’t close the old one before the deposit is received in the new one…..just in case there’s a lag in turn-over.
No fee bank accounts for seniors which used to be offered by the major banks, no longer exist. Canadians approaching 60 will discover that although their parents’ seniors’ accounts are “grandfathered”, the best they can get is a discount. Encouraged by the federal government (but not forced) the banks did come up with low cost accounts, particularly geared to those with low income or who do not wish the “bells and whistles” provided by other accounts. However, the services are limited. A basic plan, for example, could cost $3.95 a month, allowing only 12 transactions a month, including a combination of self service and up to four teller-assisted transactions. The $2 monthly statement fee still rankles, as does the knowledge that banks use depositors’ funds to make investments for which they receive interest, and charge us for the privilege of using our bank accounts.
While CIBC, BMO, SCOTIABANK, TD and RBC still rule the roost, many Canadians continue to use to Credit Unions and others are exploring services at other institutions that offer online banking. Then there are those such as Presidents’ Choice which also has locations offering service, and no cost accounts. As more people become adept at technological advances, these will continue to make serious inroads into the market, which leads to the question: is real service to consumers on its way out as the Big Five chase more lucrative sources of revenue?