A couple of days ago, the government of Canada announced that is was doubling the GST rebate for six months. It also announced that it was providing a one $500.00 payment to low income renters and covering dental expenses for children under 12 years old. The reason for these measures is the help low to modest income Canadians deal the rising costs due to inflation. What are some of the details of measures? And will this measure work?
Canada Doubling GST for Six Months
On the government’s website, they list the current GST rebate rate for lower income Canadians who qualify. For the July 2022 through June 2023 benefit year, is is as follows:
- $467 for singles without children;
- $612 for married or common-law partners;
- $612 for single parents; plus
- $161 for each child under the age of 19.
With the new measure, GST rebates will be doubled for six months during this period. Here’s what the Prime Minister stated on his Twitter feed as to specifics: “We’re doubling the GST Credit for six months – delivering support to roughly 11 million people. Single Canadians without children would receive up to an extra $234, couples with two children would receive up to an extra $467, and seniors would receive an extra $225 on average.”
Canada Providing One Time Payment to Low Income Renters
According to CTV news, the government is providing a time time $500.00 payment to low income renters. Who are eligible? Any family whose net income is less than $35000.00 per year and individuals whose net income is less than $20000.00 per year. The goal is to pay this amount by the end of the year pending parliamentary approval.
Canada Providing Dental Care for Children Under 12
The government is also providing dental care for children under 12 years old whose families’ income are less than $90000.00 per year. The same CTV article mentioned that this is the first phase of the government’s promised National Dental Program. The target date for starting the program is December 1, 2022 and the program will cover expenses retroactive to October 1, 2022. These direct payments will provide up to $650.00 per child. These payments will vary depending on family income. For example:
- $650 would be provided per child if the family’s adjusted net income is under $70,000;
- $390 would be provided per child if the family’s adjusted net income is between $70,000 and $79,999; and
- $260 would be provided per child if the family’s adjusted net income is between $80,000 and $89,999.
Canada Doubling the GST Rebate, Will it Work?
Who knows? You can see why the government wants to help those affected most by the recent rise in inflation. However, the reason we have inflation is that we have too much spending which is driving up prices of good and services. As a result, the economy is overheating. You are taught in Economics that if you want to grow an economy, you spend money. If you are government, you focus on giving money to those who are more inclined to spend it on goods and services. This is usually lower income people who will spend the money on the things they need. And that’s what is worrying some Economists. Will this spending measure by the government actually increase inflation and therefore increase prices? The government is hoping that it doesn’t. Only time will tell.