The federal government plans to temporarily increase checks on GST rebates in an effort to soften some of the inflation for lower-income Canadians.
Prime Minister Justin Trudeau will announce a three-pronged plan to address affordability at the Liberal cabinet in Vancouver today.
Cabinet ministers are gathering ahead of the autumn session of Parliament with the economy and cost of living crisis in mind.
Two federal sources familiar with the plan say it would seek to double some GST payments for six months, include help for Canadians struggling to pay their rent and launch the first step of a national dental care program.
The Canadian Press granted the sources anonymity to discuss matters that have not yet been made public.
The Liberals already promised a $500, one-time top-up to the Canada Housing Benefit and to phase in a national dental care program in last April’s budget.
Both are key demands from the NDP in the confidence and supply agreement the party made with the Liberals.
NDP Leader Jagmeet Singh has made it clear that not moving on those priorities could destroy that pact that would see his MPs support the Liberal minority government in key votes until 2025.
Singh also called for additions to the GST credit and the Canada Child Benefit, but none were included in the deal with the Liberals.
The Canada Child Benefit is not expected to be included in today’s program, but the increase in VAT payments for six months is part of it.
Canadians with low and moderate incomes based on their annual tax returns receive a GST check every three months as a kind of deduction for part 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 couples and another $161 for children under 19. The amount received is adjusted according to income.
Payments are adjusted for inflation, but the increase in 2022 is based on inflation in 2021, meaning payments for the GST credit and most other federal benefits increased by 2.4%.
Inflation averaged more than double that in the first seven months of 2022.
The cabinet meeting comes almost a year after the Liberals took power in the 2021 election, but also days before a new Conservative leader is named.
Trudeau opened Wednesday’s cabinet meeting with a speech that acknowledged there are big challenges facing Canada and the world, but that he is energized to press on 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, matched his repeated assertions, both publicly and privately, that he has no intention of stepping down before the next election.
Ministers were briefed at their meeting Wednesday afternoon by Michael Sabia, who is deputy finance minister, and private sector economists, who helped paint a picture of both Canada’s economy and inflationary pressures, as well as the global situation. .
Finance Minister Chrystia Freeland said Wednesday there will be round-the-table discussions about how best to help Canadians weather inflation, but without disrupting the federal budget balance.
The Liberal budget promised to introduce a national dental care plan starting with coverage for children under 12 in families with a household income of less than $90,000.
The first phase was expected to cost $300 million, rising to $1.7 billion annually once a full dental care plan is implemented.
It’s a complicated process because health care is a provincial responsibility and most provinces already have some kind of dental coverage for low-income families.
A one-time $500 top-up to housing benefit this year was projected to cost $475 million.
This report by The Canadian Press was first published on September 8, 2022.
