In 1917, the federal government found it needed to raise more money. In August 1914, Canada, along with the rest of the British Empire as it then was, had declared war on Germany. To raise the extra money, the Canadian Parliament voted to tax people directly on their income. This was to be only a temporary tax. Money was needed to fight the war, but the Finance Minister said that when the war ended, the tax would be 'reviewed.'
As we all know, income tax is still with us. After the war, the government had to build hospitals, look after soldiers who had been wounded, pay pensions. In other words, it still needed more money, so it kept the tax.
Until recently, Revenue Canada collected income taxes for the government. Nowadays, the federal agency that collects taxes is called the Canada Customs and Revenue Agency - CCRA for short. As well as collecting income tax, the agency also looks after the goods and services tax credit program (GST refunds). It looks after the Canada Child Tax Benefit program too. If you want to receive either a GST refund or a Child Tax Benefit, you must file an income tax return.
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