Making Life More Affordable
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The past two-and-a-half years have been difficult. A pandemic forced us to stay home to keep each other safe, and the global economy ground to a halt. Russia's illegal and barbaric invasion of Ukraine has driven up the price of food and gas. Now, like people around the world, Canadians are dealing with the impacts of global inflation.
The months to come will continue to be challenging for many Canadians—for our friends, for our families, and for our neighbours.
As we navigate the economic slowdown that is coming for Canada and the world, the government will continue to be there for the Canadians who need it most. The government's support has been carefully designed to avoid pouring fuel on the fire of inflation.
The 2022 Fall Economic Statement includes a series of new, targeted measures that are focused on the Canadians most affected by rising prices, and delivers on key pillars of the government's plan to make housing more affordable for the middle class and people working hard to join it.
The federal government is also continuing to provide support to people and businesses in Atlantic Canada and Eastern Quebec following Hurricane Fiona, with the 2022 Fall Economic Statement confirming significant financial support to assist with rebuilding efforts.
Ongoing Programs to Make Life More Affordable for Canadians This Year
Prior to the 2022 Fall Economic Statement, this year, Canadians have already been receiving significant new support through the government's Affordability Plan. This includes:
- Enhancing the Canada Workers Benefit for an estimated three million low-income or minimum wage workers this year, with a couple receiving up to $2,400 more this year, and single workers receiving up to $1,200 more. Most recipients first received this additional support through their 2021 tax refund.
- Cutting child care fees by an average of 50 per cent by the end of this year for families across Canada with children in regulated child care, and making child care more accessible in Quebec.
- Increasing the Old Age Security (OAS) pension by 10 per cent for the most vulnerable seniors, people 75 years and older, which began in July 2022, will provide more than $800 in new support to full pensioners over the first year, and increase benefits for more than three million seniors.
- Important benefits being indexed to inflation, including the Canada Child Benefit, the Canada Pension Plan, OAS, and the Guaranteed Income Supplement.
- More support for students by doubling the Canada Student Grant to provide up to $6,000 per year until July 2023, and by waiving interest on Canada Student Loans through to March 2023.
This is what the government's Affordability Plan means for Canadians this year:
- A couple in Ontario who earn $45,000 and have a child in daycare could receive about an additional $7,800 above their existing benefits this fiscal year.
- A single senior with a disability, in Quebec, could benefit from an additional $2,700 more this year than she received last year.
- A single recent graduate, starting their career in Alberta with an income of $24,000, could receive an additional $1,300 in new and enhanced benefits.
New Support for Canadians Who Need It Most
The very first pieces of legislation that the government introduced in this fall's Parliamentary sitting proposed new, targeted measures to provide support for the Canadians who need it most. One of those two pieces of legislation, the Cost of Living Relief Act, No. 1, has already received unanimous support and will double the Goods and Services Tax Credit for six months, providing inflation relief to Canadians from coast-to-coast-to-coast. The government continues to move forward on passing the second piece of legislation, the Cost of Living Relief Act, No. 2, which will deliver dental care to children under 12 and a top-up to the Canada Housing Benefit for nearly two million low-income renters.
The 2022 Fall Economic Statement also proposes financial support for low-income workers through automatic advance payments on the Canada Workers Benefit, and the permanent elimination of interest on Canada Student Loans and Canada Apprentice Loans, which will offer important relief for all current and future new graduates coping with the high cost of living.
Doubling the GST Credit for Six Months
In the coming weeks, an estimated 11 million low- and modest-income people and families will receive an additional Goods and Services Tax (GST) Credit payment. For those who need it most, inflation relief will soon be on the way to help with the cost of groceries and other essentials.
Single Canadians without children will receive up to an extra $234, and couples with two children will receive up to an extra $467. Seniors will receive an extra $225 on average. This payment, equivalent to doubling the GST Credit for six months, will provide $2.5 billion in additional targeted support.
Current GST Credit recipients will receive this support automatically.
The Canada Dental Benefit
Nobody should have to choose between taking their child to the dentist and putting food on the table. However, in 2018, more than one-in-five Canadians reported avoiding dental care because of the cost.
As a first step towards making dental care more affordable for everyone, in September 2022, the government introduced legislation to implement the Canada Dental Benefit, which would provide eligible parents or guardians with direct, up-front tax-free payments to cover dental expenses for their children under 12-years-old.
For those without dental coverage and with an annual family income under $90,000 per year, the Canada Dental Benefit will provide payments totalling up to $1,300 per child, over the next two years. Once approved in Parliament, it is estimated that 500,000 Canadian children will benefit from this support as the government works to build a comprehensive, national dental care program by 2025.
A Top-Up to the Canada Housing Benefit
Everyone deserves a safe and affordable place to call home, but as rents continue to rise across the country, housing is becoming unaffordable for too many modest- and low-income Canadians. That is why, in September 2022, the government introduced legislation to provide a top-up to the Canada Housing Benefit.
Once approved in Parliament, this federally funded top-up to the Canada Housing Benefit, paid through the Canada Revenue Agency, will deliver a tax-free payment of $500 directly to 1.8 million low-income renters who are struggling with the cost of housing. This support is in addition to the hundreds of dollars of monthly rent support that many Canadians already receive through the program, which the federal government launched in 2020 and co-funds with provinces and territories.
This payment more than doubles the government's Budget 2022 commitment, and will reach twice as many Canadians as initially promised. The federal benefit will be available to applicants with an adjusted net income below $35,000 for families, or below $20,000 for single Canadians, who pay at least 30 per cent of their income towards rent.
An Automatic Advance for the Canada Workers Benefit
The Canada Workers Benefit (CWB) is a refundable tax credit that tops up the income of about 3 million of our lowest-paid-and often most essential—workers in a typical year.
In Budget 2021, the government significantly expanded the CWB to support an estimated one million additional Canadians. At a time when they need it most, this means that couples are receiving up to $2,400 more, and single workers are receiving up to $1,200 more than they received last year.
The CWB is currently delivered through tax returns, meaning people who receive it need to wait until the tax year is over to receive the support that helps them pay for day-to-day essentials like groceries and rent.
The 2022 Fall Economic Statement proposes to provide $4 billion over six years, starting in 2022-23, to automatically issue advance payments of the Canada Workers Benefit to people who qualified for the benefit in the previous year, starting in July 2023 for the 2023 taxation year. Workers would receive a minimum entitlement for the year through advance payments based on income reported in the prior year's tax return, and any additional entitlement for the year would be provided when filing their tax return for the year.
This measure would provide, split between three advance payments, up to $714 total for single workers, and $1,231 total for a family to help cope with the rising cost of living.
Jesse works at a grocery store, and makes about $25,000 per year. He received $1,200 through the Canada Workers Benefit for 2022. With the new advance payments, Jesse is entitled to three quarterly advance payments of $200—in July 2023, October 2023, and January 2024. At the end of the year, it is determined that he is entitled to an additional $600 in CWB for 2023, which is delivered once he files his 2023 taxes in early 2024.
Eliminating Interest on Federal Student and Apprentice Loans
The transition from school to working life should be made easier, not harder. In 2019, when interest rates were at historic lows, the federal government acted to make student loans more affordable by reducing interest charges on student loans to the prime rate.
When COVID-19 disrupted Canadians' lives, students and young people were among the most affected. To support them, the government waived interest charges on student loans for two years, which helped ease the burden that many faced after graduating into an incredibly challenging job market. This support currently expires on March 31, 2023. And so, with life becoming more expensive for many recent graduates, the government is taking new, permanent steps to reduce the burden of student loans on young Canadians so they can invest in building their futures.
The 2022 Fall Economic Statement proposes to make all Canada Student Loans and Canada Apprentice Loans permanently interest-free, including those currently being repaid, beginning on April 1, 2023. This change has an estimated cost of $2.7 billion over five years and $556.3 million ongoing.
Half of all post-secondary students in Canada rely on student loans to help them afford the cost of tuition and essentials during their studies. An average student loan borrower will save $410 per year as a result of their loan being interest-free. They will still be able to use the Repayment Assistance Plan, allowing them to pause student loan repayment until they make at least $40,000 per year, and reducing payments for those earning slightly above that threshold.
Making Housing More Affordable
The dream of home ownership is becoming increasingly unaffordable for too many young and middle class Canadians. That is why, in addition to the top-up to the Canada Housing Benefit, the government is moving forward with its ambitious package of measures to build more homes and make housing more affordable across the country.
In June 2022, Parliament passed legislation to implement the following measures:
A two-year ban on non-Canadians purchasing residential property in Canada, effective January 1, 2023. This ban is about curbing speculation and ensuring that houses are used as homes for Canadians to live in—and not used as financial assets for foreign investors. The government recently consulted on regulations that will be brought forward prior to January 1, 2023, to implement the final details of the ban.
A 1 per cent annual "underused housing tax" on the value of non-resident, non-Canadian owned residential property that is vacant or underused. This will help free up homes for Canadians to live in, make the housing market more affordable for Canadians, and ensure that foreign, non-resident owners of Canadian housing pay their fair share of Canadian tax.
The application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to all assignment sales of newly constructed or substantially renovated residential housing, effective May 7, 2022. An assignment sale is when a house is resold before it has even been constructed or lived in. Applying GST/HST to assignment sales will provide certainty for all parties involved, and crack down on speculators who may be dishonest in these transactions.
Following the 2022 Fall Economic Statement, the government will table legislation in Parliament to:
Create the new Tax-Free First Home Savings Account, which would give prospective first-time home buyers the ability to save up to $40,000, tax-free. Like an RRSP, contributions would be tax-deductible, and withdrawals to purchase a first home—including investment income—would be non-taxable, like a TFSA. Tax-free in; tax-free out. The government expects that Canadians will be able to open and begin contributing to an account in mid-2023.
Double the First-Time Home Buyers' Tax Credit, which would provide up to $1,500 in direct support to home buyers, starting in 2022, to help offset increasing closing costs involved in buying a home.
Introduce a new, refundable Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a family member who is a senior or an adult with a disability, starting January 1, 2023.
Ensure that profits from flipping properties held for less than 12 months are fully taxed, starting in 2023, with certain exceptions for unexpected life events. This measure will ensure that investors who flip homes pay their fair share, and play a role in lowering housing prices for Canadians.
Lowering Credit Card Transaction Fees for Small Businesses
The government intends to enter into negotiations with payment card networks, financial institutions, acquirers, payment processors, and businesses to lower credit card transaction fees for small businesses in a manner that does not adversely affect other businesses and protects existing reward points for consumers.
Today, the government is publishing draft legislative amendments to the Payment Card Networks Act. Should the industry not come to an agreed solution in the months to come, the government will introduce this legislation at the earliest possible opportunity in the new year and move forward on regulating credit card transaction fees.
Rebuilding Atlantic Canada and Eastern Quebec After Hurricane Fiona
Hurricane Fiona devastated parts of Atlantic Canada and Eastern Quebec, affecting families, communities, businesses, and critical infrastructure like small craft harbours. For as long as the recovery takes, the federal government will continue to support the Canadians impacted by the storm, and help to ensure the long-term recovery of the regions that have been affected, including rural communities.
On October 4, 2022, the government announced the creation of the Hurricane Fiona Recovery Fund, which will provide $300 million over two years, starting in 2022-23, including by providing $100 million from the Fund to rebuild small craft harbours and recover lost fishing gear. The government also matched donations to the Canadian Red Cross Hurricane Fiona in Canada Appeal for more than 30 days, which supports emergency services such as food and interim housing for those in need.
This support is in addition to the federal government's standing commitment under the Disaster Financial Assistance Arrangements to cover up to 90 per cent of eligible provincial expenses following a disaster, including:
- Evacuation, transportation, emergency food, shelter, and clothing;
- Repairs to public buildings and related equipment, roads, and bridges;
- Restoration or replacement of essential uninsurable principal property of people, small businesses, and farmsteads.
Recognizing that recovery efforts are still underway and cost estimates are in development, the 2022 Fall Economic Statement establishes a provision of $1 billion in 2022-23 in anticipation of Hurricane Fiona-related requests from provinces under the Disaster Financial Assistance Arrangements.
Overview of Gender-Based Analysis Plus
Low income combined with other hardships such as elevated inflation, inadequate housing, lack of employment opportunities, and lack of access to services such as health care, exacerbates economic disadvantage. To help alleviate this, the government provides a range of supports and services to people and families. These measures also recognize that various identity factors such as gender, income, age, and geography can affect access to opportunities and therefore address the needs of Canadians at their different life stages and in specific circumstances.
Doubling the GST Credit for Six Months will benefit households who have lower income and are more sensitive to rising inflation. Single parents will disproportionately benefit from the credit, as they represent about 4 per cent of tax filers but would receive 13 per cent of the GST Credit increase, the vast majority of which would go to single mothers.
The Automatic Advance for the Canada Workers Benefit (CWB) will disproportionately benefit young people aged 20-34, those without a post-secondary qualification, new immigrants, Indigenous Peoples, and single parents. In recognition of lower tax filing rates among Indigenous Peoples, the government has made recent investments in outreach, support, and assistance with tax filing, in an effort to improve access to benefits. Roughly half of CWB recipients in a typical year are women, such that the overall impacts of the measure are largely expected to be gender neutral. However, almost 90 per cent of single parent families in receipt of the CWB were headed by a woman. The CWB also features a supplement for people eligible for the Disability Tax Credit.
The Canada Dental Benefit will benefit children under 12 without dental coverage and their families, particularly those in low-income households. Low-income Canadians are less likely to have private dental coverage, and have both the highest level of oral health problems and the most difficulty accessing oral health care.
The Top-Up to the Canada Housing Benefit will directly benefit 1.8 million low-income renters who are struggling with the cost of housing. High shelter costs can make it harder for families to stay healthy and to support their children's education and development. Women in particular have a somewhat higher incidence of core housing need compared to men (9.7 per cent compared to 8.2 per cent), with larger gaps for single parents, racialized groups, seniors, and persons with disabilities.
Permanently Eliminating Interest on Federal Student Loans will directly benefit student and apprentice loan borrowers who have left school and are currently repaying their loans, as well as post-secondary students with federal loans who will enter repayment in the future. Most beneficiaries will be Canada Student Loan borrowers, of whom 61 per cent are women. A minority will be Apprentice Loan borrowers, of whom 93 per cent are men. About 63 per cent of all Canada Student Loan recipients are under 35 years of age.
Through support for Rebuilding Atlantic Canada and Eastern Quebec After Hurricane Fiona, the federal government will continue to respond to the immediate needs of people and businesses impacted by the storm and support the long-term recovery of the region and local economies. Studies suggest that climate disasters disproportionately impact certain groups, including Indigenous communities, seniors, women, new immigrants, and cultural minorities, as well as low-income households. In many cases, shoreline, or island communities are at a high risk of coastal flooding and living in a flood zone may be the only option for certain groups to access affordable housing.
|1. Making Life More Affordable||4,369||1,301||1,295||1,324||1,374||1,387||11,050|
|Doubling the GST Credit for Six Months*||2,475||-||-||-||-||-||2,475|
|The Canada Dental Benefit*||352||454||132||-||-||-||938|
Less: Funds Previously Provisioned in the Fiscal Framework
|A Top-Up to the Canada Housing Benefit*||1,163||-||-||-||-||-||1,163|
Less: Funds Previously Provisioned in the Fiscal Framework
|An Automatic Advance for the Canada Workers Benefit||-||750||780||790||805||820||3,945|
|Eliminating Interest on Federal Student and Apprentice Loans||-||552||526||546||582||582||2,787|
Less: Reduction in claims of the Student Loan Interest Tax Credit
|Rebuilding Atlantic Canada and Eastern Quebec After Hurricane Fiona**||1,150||150||-||-||-||-||1,300|
|Additional Measures - Making Life More Affordable||-||-1||-1||-1||- 1||-1||- 5|
|Extending the Residential Property Flipping Rule to Assignment Sales***||-||-1||-1||-1||-1||-1||-5|
|Chapter 1 - Net Fiscal Impact||4,369||1,300||1,294||1,323||1,373||1,386||11,045|
* Announced on September 13, 2022
** On October 4, 2022, the Government of Canada announced $300 million to support the Hurricane Fiona Recovery Fund.
*** Further details are included in Tax Measures: Supplementary Information.
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