Postponed announcement of one-time increase in GST refunds and rental assistance
Mia Rabson, The Canadian Press
VANCOUVER — Prime Minister Justin Trudeau was due to announce new measures to Canadians on Thursday to help them deal with the rising cost of living, but the death of the queen has upended his plans.
We know, however, that the federal government will soon double GST rebate checks for six months, increase benefits to help low-income Canadians pay their rent and launch the first phase of the national dental plan.
News of Queen Elizabeth II’s death on Thursday afternoon derailed plans to unveil the measures at the Liberal cabinet meeting in Vancouver, and it’s unclear when that announcement will now take place. Prior to the unscheduled postponement, however, two sources familiar with the matter had spoken to The Canadian Press on condition they were not named, to discuss matters that are not yet public.
The three-day cabinet retreat, which ends Thursday evening, comes as the government prepares for the fall parliamentary re-opening on September 19 and the arrival of a new Conservative leader. Cabinet meetings have been heavily focused on the economy and the cost of living.
The New Democratic Party (NDP) considers these measures a huge victory following its decision last winter to reach a “support and confidence agreement” to keep the minority government in power until 2025. The Liberals However, they must implement programs dear to New Democrats, such as dental care and housing assistance. These two measures were already announced in the budget in April, but they have not yet been deployed.
According to the sources, the first phase of the dental program will allow parents of children under 12 to apply for reimbursement of $650 to cover dental care this year, and again next year, until a more formal and permanent program be developed.
However, this is a complex and delicate process because health care delivery is a provincial responsibility and most provinces have already implemented some form of dental coverage for low-income families.
In terms of housing assistance, Ottawa will provide a lump sum supplement of $500 to the Canada Housing Benefit. The Liberals had budgeted $300 million for dental care this fiscal year and $475 million for housing allowance.
NDP Leader Jagmeet Singh has made it clear that if his priorities aren’t met, he could end the pact that sees his MPs supporting the minority Liberal government in key votes in the Commons, until 2025 .
In addition to dental care, Mr. Singh had asked for top-ups to the GST rebate and the Canada child benefit, but these two measures were not included in the agreement with the Liberals last March. According to our sources, the Canada Child Benefit should not be included in the plan announced eventually, but the increase in GST refunds for six months will be part of it.
Canadians considered “low or modest income” on their annual tax returns receive a GST rebate check every three months as a rebate of a portion of this federal sales tax. The current benefit can reach $467 per year for a single person with a maximum income of just over $49,000, $612 for married or common-law couples and an additional $161 for children under 19. year.
The amount received is adjusted according to income and disappears entirely above a certain income threshold. This threshold is set at just over $49,000 for a single person, just over $50,000 for a childless couple, and over $60,000 for a couple with four children.
Payments are indexed to 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%. However, inflation was on average twice as high in the first seven months of 2022.
The cabinet meeting comes nearly a year after the Liberals held onto power in the 2021 election, but also days before the appointment of a new leader of the Conservative Party, the official opposition in Ottawa.
Justin Trudeau kicked off the cabinet meeting on Wednesday with a speech acknowledging that Canada and the world face great challenges, but he said he was motivated to keep going and provide the solutions envisioned by the Liberal government.
His comments, confirmed to The Canadian Press by two sources, were consistent with his repeated claims, both publicly and privately, that he had no intention of stepping down until the next federal election, due in 2025.
At their meeting on Wednesday afternoon, Michael Sabia, Deputy Minister of Finance, along with private sector economists helped ministers paint a picture of both the Canadian economy and inflationary pressures, as well as the world situation.
Finance Minister Chrystia Freeland said Wednesday there will be discussions around the table about how best to help Canadians weather inflation as much as possible, but without upsetting the federal budget balance.