Millions of low and middle-income Canadians can expect to see higher-than-usual payments from the Canada Revenue Agency (CRA) coming to their banks accounts.
Canada’s sales tax (GST/HST) rebate will be replaced in July by the Canada Groceries and Essentials Benefit (CGEB), which pay out higher tax refunds to eligible Canadians, but will otherwise function the same way as the old rebate,.
The CGEB’s quarterly payments will be increased by 25 per cent every year for the next five years.
But on top of the new CGEB’s higher payments, Canada is putting out an additional one-time GST/HST payment, which begins to pay out on Friday.
This One-time GST/HST credit will pay out an additional 50 per cent of every Canadian’s normal year GST/HST refund, so if an individual normally receives $200 a year in GST/HST rebates, for example, the one-time payment will offer them an additional $100.
Canada’s Minister of Jobs and Families Patty Hajdu says Canadians are “feeling the pinch” right now, with rising food prices high on the list of everyday affordability concerns.
“We’ve seen some leveling off of inflation in other goods, but there’s still persistent inflation with certain food items,” explains the minister.
According to the Bank of Canada, since 2022 food prices have increased by 22 per cent nationwide, while prices on average have increased just 13 per cent.
Hajdu acknowledges that the one-time top-up payment is “obviously not going to cover the cost of an entire grocery bill,” but will provide immediate assistance to anyone that currently gets the GST/HST credit.
In the long run, the federal government will have to respond not just to the financial burden to Canadians of high a food inflation rate, but also the inflation rate itself, which sales tax rebates cannot address.
Earlier this year, the Liberals announced that they are working on a new National Food Security Strategy, which aims to increase Canada’s domestic food production, and could help make grocery costs less vulnerable to global price shocks from events like foreign wars, tariffs, or global pandemics.
Hajdu says her government hopes to implement new policies to support farmers and consumers as quickly as possible.
“The entire name of the game right now is speed,” she says. “The Prime Minister is focused on actions that get projects build faster, that help support food network partners and growers and farms very quickly.”
