Canada’s New Affordability Plan – Sales Taxes: VAT, GST

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On September 13, 2022, the federal government announced new measures under its Affordability Plan to help Canadians hit by the effects of inflation.

Crowe MacKay’s tax advisors provide a brief overview of the new measures. If you need help, contact us in Alberta, British Columbia, the Northwest Territories or the Yukon.

Goods and Services Tax Credit (GST).

The government proposes doubling the GST credit for six months. Single Canadians with no children would get up to an extra $234, couples with two children would get up to an extra $467, and seniors would get an extra $225 on average. The proposed additional GST credit amounts would be paid to all current recipients via the existing GST credit system as a one-off lump sum payment before the end of the year, subject to Parliamentary approval and Royal Assent to enabling legislation. Recipients should file their 2021 tax returns if they have not already done so to receive both the current GST credit and the additional payment.

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Affordable housing

The Government of Canada provides a One-time payment of $500 to nearly one million Canadians who are struggling with the cost of housing. Payment would be initiated by the end of the year, subject to parliamentary approval and royal assent to enabling legislation. To determine eligibility, the CRA would proceed with a pre-screening of the applicant’s income, age and residency for tax purposes.

dental care

The government is providing eligible parents and guardians with tax-free advance payments of up to $650 per year per child to help pay for dental expenses for their children under the age of 12. This benefit would be available to families whose annual income is less than $90,000. The planned implementation date for this benefit is 1 December 2022, subject to Parliamentary approval and Royal Assent to enabling legislation, and the scheme would cover expenditure retroactively to 1 October 2022.

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Worker Benefits in Canada

Canada Worker’s Allowance has been increased to support low-income workers. Those on modest incomes could receive up to $2,400 in assistance this year.

old-age security

Those aged 75 and older should see a 10% increase in their old age security (OAS), which began in July 2022. Overall, those who are entitled are overlooked $800 in new support for full-time retirees in their first year.

Early education and child care

With the Canadian government’s new affordable, universal early education and child care system, Canadian families should reduce their fees by an average of 50% by the end of this year. Families can make up to savings $6,000 in British Columbia and $5,610 in Alberta.

Indexed Benefits

Among the benefits that are indexed to keep the cost of living affordable are the Canada child supportthe Goods and Services Tax Creditthe Canada retirement plan, OASand the Guaranteed Income Supplement.

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climate change

With the government’s award for pollution in the provinces where the federal system operates, a family of four in Alberta will receive $1,079 in 2022-23 climate action incentive payments of the fuel fee.

Eight in ten families should receive additional climate stimulus payments and get back more than they will pay because of the price of pollution, with low- and middle-income families benefiting the most.

The content of this article is intended to provide a general guide to the topic. In relation to your specific circumstances, you should seek advice from a specialist.


Improved tax reporting for trusts from 2022

Moody’s Private Client Law LLP

On August 9, 2022, the Treasury Department released the latest draft legislation relating to expanded trust reporting requirements, first introduced in the 2018 federal budget.

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