Mia Rabson, The Canadian Press Posted on Thursday, September 8, 2022 5:41 AM EDT Last updated on Thursday, September 8, 2022 5:41 AM EDT
The federal government intends to temporarily increase GST rebate checks to try to ease some of the damage of inflation for lower-income Canadians.
Prime Minister Justin Trudeau will announce a three-pronged plan to address affordability at the Liberal cabinet retreat in Vancouver today.
Cabinet ministers are meeting ahead of the autumn session of Parliament with the economy and the cost of living crisis front and center.
Two federal sources familiar with the plan say it will seek to double some GST payments for six months, include help for Canadians struggling to pay rent and launch the first step of a national dental care program.
The Canadian press granted the sources anonymity to discuss matters not yet made public.
The Liberals already promised a one-time $500 top-up to the Canada Housing Benefit and began phasing in a national dental care program in last April’s budget.
Both are key demands of the NDP in the confidence and supply agreement that party made with the Liberals.
NDP Leader Jagmeet Singh has made it clear that failure to follow through on those priorities could kill that pact that would allow his MPs to support the Liberal minority government in key votes until 2025.
Singh has also called for add-ons to the VAT cut and the Canada child benefit, but neither was included in the deal with the Liberals.
The Canada Child Benefit is not expected to be included in today’s plan, but an increase in GST payments for six months is part of it.
Canadians with low and modest incomes on their annual tax returns receive a GST check every three months as a rebate for the portion of the GST they pay.
The current benefit is up to $467 a year for a single person with a maximum income of just over $49,000, $612 for married or common-law partners and another $161 for those under 19. The amount received is adjusted based on income.
Payments are indexed to inflation, but the 2022 increase is based on 2021 inflation, meaning payments for the GST credit and most other federal benefits increased by 2.4 percent.
Inflation averaged more than double that in the first seven months of 2022.
The cabinet meeting comes almost a year after the Liberals swept to power in the 2021 election, but also days before a new Tory leader is named.
Trudeau opened Wednesday’s cabinet meeting with a speech in which he acknowledged that there are big challenges facing Canada and the world, but that he is encouraged to move forward and deliver the solutions the Liberal government is planning.
His comments, confirmed to The Canadian Press by two sources with knowledge of what was said, are consistent with his repeated assertions, both publicly and privately, that he has no intention of resigning before the next election.
Ministers were briefed at Wednesday afternoon’s meeting by Michael Sabia, who is the deputy finance minister, and private sector economists, who helped paint a picture of both Canada’s economy and inflationary pressures and of the global situation.
Finance Minister Chrystia Freeland said Wednesday there will be discussions around the table about how best to help Canadians feel the brunt of inflation, but without disrupting the federal fiscal balance.
The Liberal budget promised to introduce a national dental care plan based on coverage for children under 12 in families with household incomes below $90,000.
The first phase was expected to cost $300 million, rising to $1.7 billion annually once a comprehensive dental care plan is implemented.
It’s a complicated process because health delivery is a provincial responsibility and most provinces already have some form of dental care coverage for low-income families.
This year, a one-time top-up of $500 was budgeted for housing at a cost of $475 million.
This report by The Canadian Press was first published on September 8, 2022.