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Will Trudeau’s $4.5B affordability plan help you? Here’s what to know

Click to play video: 'Ottawa unveils $4.5B affordability plan including dental care, GST credit'
Ottawa unveils $4.5B affordability plan including dental care, GST credit
WATCH: CIn an effort to curb inflation, the federal government has announced a plan worth more than $4.5 billion to help Canadians cope with the soaring cost of living. Abigail Bimman explains – Sep 13, 2022

Prime Minister Justin Trudeau says his government plans to roll out a six-month boost to the GST tax credit, a dental benefit for some children, and a one-time top up of the Canada Housing Benefit — all totalling $4.5 billion — to help Canadians cope with the soaring cost of living.

Speaking from the Liberal caucus retreat on Tuesday, Trudeau unveiled the spending plans, which build on commitments made in the most recent federal budget earlier this year.

Since that was released in April though, inflation has risen and remained stubbornly high even as the Bank of Canada pushes forward with interest rate hikes, keeping the cost of everything from groceries to gas to all kinds of consumer goods and services elevated.

Read more: NDP’s Singh says party will push government to act on dental care, housing

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Click to play video: 'Another interest rate hike, but is it really helping lower inflation?'
Another interest rate hike, but is it really helping lower inflation?

Of that $4.5 billion, $3.1 billion is in addition to the spending on affordability announced in that budget, Trudeau said.

“These will be the very first pieces of legislation we introduce when the House [of Commons] returns,” he told reporters gathered at the caucus retreat.

He billed the dental benefit for some children under the age of 12 as the “first step” in a key commitment made by the Liberals with the NDP in the governance agreement the two parties struck.

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That Canada Dental Benefit will be for children under the age of 12 who do not have access to dental insurance and will only be for families with income under $90,000 per year. It would provide for direct payments of up to $1,300 per child over the next two years.

NDP Leader Jagmeet Singh had warned there would be “repercussions” if the plan for dental care for children under 12 was not in place by the end of the year.

Click to play video: 'New Liberal/NDP dental care proposal'
New Liberal/NDP dental care proposal

As well, the one-time top up to the Canada Housing Benefit will be available for renting families with a net income of less than $35,000, or renting individuals making less than $20,000, “who pay at least 30 per cent of their income on rent,” according to a government statement.

The benefit is expected to go to roughly 1.8 million Canadian renters, and be about $500.

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The 11 million Canadian households who already receive the GST tax credit will also see their credit double for six months. For single Canadians who do not have children, that’s expected to mean an extra $234 in the GST credit, while couples with two children would get around $467 this year.

Conservative Leader Pierre Poilievre said the spending will not help average Canadians and could risk making inflation worse. He said the $500 Canada Housing Benefit top up would “go up in smoke” for someone paying $2,000 per month in rent.

“It simply pours more gasoline on the inflationary fire,” Poilievre said on Tuesday.

Read more: Freeland touts affordability programs, but no new spending, to combat inflation

Trudeau billed the spending as targeted when questioned by reporters, while Finance Minister Chrystia Freeland said Canada’s economy is in a good position to weather global challenges.

“I think the most important thing is to understand there are Canadians out there who are really hurting … what we’re doing with these specific measures is targeting those most vulnerable, those most hard-hit by increases in inflation,” said Trudeau.

“They are also sufficiently targeted that we are confident they will not contribute to increased inflation.”

Freeland acknowledged the global economy is facing considerable challenges, but said regulations in place on Canadian institutions such as banks are mitigating some of the domestic risks facing Canada.

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“Right now we are in a very challenging, very volatile global environment, as we were in 2008,” Freeland said.  “We have a system that is very stress tested and as the global economy is going through a lot of stress, it’s like a big life jacket for Canadians.”

Last month, Freeland stressed the need for the government to avoid pouring “fiscal fuel” on the fires of inflation through efforts to help Canadians cope with the growing lack of affordability.

Click to play video: 'Freeland does not want to pour ‘fiscal fuel on the flames of inflation’ in pursuit of affordable Canadian living'
Freeland does not want to pour ‘fiscal fuel on the flames of inflation’ in pursuit of affordable Canadian living

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