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Inflation: 5 things about Canada’s affordability plan

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OTTAWA – Liberals kicked off Parliament’s fall session on Tuesday by introducing two new bills with more than $4.5 billion in spending that they hope will ease the rising cost of living for modest-income Canadians.

Here are five things to know about the government’s new affordability plan:

1. Liberals hope to double the GST credits

Nearly 11 million people already eligible for GST credits would receive roughly twice the exemption for about six months under the proposed bill. If passed, childless singles would get up to an extra $234, and couples with two kids would get up to an extra $467 this year. The government estimates that seniors will receive an average of $225 more.

2. Some children are eligible for dental care dollars

Children under the age of 12 who have an annual income of less than $90,000 for their family are eligible for a new dental care benefit if they do not already have dental insurance. The federal government says eligible families will get $650 per child per year, depending on their income.

While the Canada Revenue Agency will ask for details about dental appointments and expect parents to keep receipts to show how the money is being spent, the government says it won’t call if families don’t spend every cent in the way intended.

If the TRA finds that people have intentionally misled them or improperly used the funds, they could face a fine of up to $5,000.

The benefit is only a temporary measure while the federal government works on a more comprehensive, long-term dental care program.

3. There is little help that comes to people who eat their rent payments

One of the proposed bills would also create an additional $500 one-time payment for the Canada Housing Benefit. The check will be available to families with an income of less than $35,000, or individuals who earn less than $20,000, who also spend at least 30 percent of their income on rent.

The idea is to make rent affordable for low-income renters who struggle with the cost of living.

4. The timing of payments will depend on how quickly the bill becomes law

The bills contain about $4.5 billion in spending, of which $3.1 billion isn’t actually allocated in the 2022 budget.

Cabinet ministers are keen to get bills passed through the House of Commons quickly so checks can be delivered by December – a particularly difficult month for many cash-strapped families.

They can be sure the bills will pass with the help of the National Democratic Party, which has called for all three measures, but how quickly that happens could ultimately be up to opposition conservatives, who object to the Liberals’ way of tackling affordability.

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5. Politicians make money if spending makes inflation worse

The neo-conservative leader, Pierre Boulevard, has come out against the Liberals, claiming that their plan “prints more money, borrows more money, and throws gasoline on the inflationary fire created by the prime minister”.

At a press conference, Assistant Finance Minister Randy Poissonault responded by saying the spending was “not an inflationary move” because it goes to people who are struggling and don’t have savings to dive into.

He said the new spending represents a small portion of the overall Canadian economy, which is about $2.6 trillion. “It’s like throwing a stone into a lake – the lake doesn’t get flooded. And that’s what we’re very keen on doing.”

This report was first published by The Canadian Press on September 20, 2022.

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