Millions of Canadians will get GST credits starting Friday. What to expect

Millions of Canadians woke up Friday morning with hundreds of dollars from Canada’s federal government.

That’s because Bill C-30 has passed, doubling the GST Tax Credit for 11 million Canadians for half a year.

The bill, sponsored by Minister of Finance and Deputy Prime Minister Chrystia Freeland, received royal assent last month on Oct. 18.

The legislation is aimed to help low-and-modest-income Canadian families cope with inflation as fears of a recession loom.

The enactment amends the Income Tax Act in order to double the Goods and Sales Tax/Harmonized Sales Tax (GST/HST) credit for six months. This increases the maximum GST/HST credit amounts by 50 per cent for the 2022-2023 benefit year, according to the bill.

“We absolutely understand that times are tough for so many Canadians today. That’s why I was so glad to share some great news, and that is that the GST credit will start arriving in the bank accounts and in the mailboxes of 11 million Canadian households tomorrow,” Freeland said Thursday in the House of Commons while presenting the 2022 fall economic statement.

“That is much needed support. It is going to provide such valuable inflation relief to the Canadians who need it the most,” she said.

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Eligible Canadians who already receive the GST credit will automatically get the top up.

Anyone in Canada who is single, married or has a common-law partner and makes over $65,000 is ineligible for the credit, according to the government.

If you make over $60,000 and are single, married or common-law with fewer than three children, you are also ineligible.

If you’re single, married or common-law and make $55,000, you’re also ineligible, unless you have two or more children.

The same is true if you are single and make $50,000.

The boosted payment equals out to double to amount of the GST credit you would receive over a six-month period.

The maximum payment amount depends on if you’re single, married or have a common law partner and also depends on how many children you have, according to the federal government.

The maximum payment you could receive if you are single:

• $234 if you have no children
• $387 if you have one child
• $467 if you have two children
• $548 if you have three children
• $628 if you have four children

The maximum payment you could receive if you are married or have a common law partner:

• $306 if you have no children
• $387if you have one child
• $467 if you have two children
• $548 if you have three children
• $628 if you have four children

The government has also created a calculator to determine how much you will receive.

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According to an analysis by the parliamentary budget officer, the boosted GST rebates will cost $2.6 billion.

Amin Mawani, associate professor of taxation at York University’s Schulich School of Business, said the bill is a great “targeted approach” to help Canadians who need it most.

“I think it’s a good strategy for sure,” he told Global News.

“Inflation has been the highest in food and rent and low-income earners spend most of their money on those two things.”

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Compared to the broader relief provided by the Liberal government during the COVID-19 pandemic, “this makes much more sense,” according to Mawani.

“It’s a good way to catch the right group. The recipients will be able to use this extra credit towards those expenses that have experienced high inflation rates,” he said.

The bill comes as part of a set of three new policies the Liberal government proposed in Sept. to help the country with the rising cost of living.

A new dental care benefit for those under 12 from low and modest-income families, and a one-time $500 housing rental allowance for low-income renters are the other two.

In Thursday’s mini-budget presented by Freeland, the $30.6 billion promised over the years leading up to 2027-28 includes money set aside for these previously announced as part of the agreement the Liberals made with the New Democrats.

Additionally, starting in 2022-23, Canadian workers who qualified for the Canada Workers Benefit the year before will be automatically issued advanced payments based on their previous tax returns.

Each year, three million of the lowest paid Canadians are eligible for the refundable tax credit that tops up a worker’s income.

However, the benefit is typically delivered through tax returns, which the government said in the fall economic statement means that Canadians “need to wait until the tax year is over to receive the support.”

Those eligible will get “up to” $714 total for single workers and up to $1,231 total for families, according to the document.

“Any additional entitlement for the year would be provided when filing their tax return for the year,” the fall economic statement, which noted the word “inflation” more than 100 times, detailed.

This move is expected to cost around $4 billion over the next six years.

For the current fiscal year, the mid-year budget update is forecasting a $36.4-billion deficit, which is about $16 billion lower than anticipated in the spring budget thanks to high inflation and a strong economic recovery boosting government revenue.

The fiscal update says the federal debt as a share of GDP is 42.3 per cent in fiscal 2022-23 and projected to steadily decline until reaching 37.3 per cent in fiscal 2027-28.

— with files from Global News’ Rachel Gilmore & The Canadian Press