Group calls for expansion of GST/HST credit from Canadian government

A new organization is calling on the Canadian government to provide more benefits to residents in need of funds to cover living costs.

The organization, the Affordability Action Council, is calling on the federal government to “reform and rename the GST/HST credit to a Groceries and Essentials Benefit that would help more households buy adequate food and other essentials.”

Food bank usage has hit all-time highs across Canada, including Hamilton, Mississauga and Halton. Almost seven million people in Canada do not have stable access to sufficient food, according to a press release from the Affordability Action Council.

And many residents are struggling with housing costs and overall inflation.

“Recent increases in food, rent, energy, and transportation prices have outpaced incomes, leaving little left over at the end of the month,” the Affordability Action Council notes.

The council recommends the federal government restructure and expand the existing GST/HST credit and rename it the Groceries and Essentials Benefit.

The benefit should be paid in monthly installments to provide people with more stability to pay recurring bills, the council suggests.

It would target households with working-age adults and provide benefit amounts based on the income and number of people in a household. The expansion would increase the base amount to $150 a month per adult and $50 a month per child.

So, all households that currently receive the GST/HST rebate would get more money, but the lowest-income households would see a larger increase.

“Lower-income Canadians are feeling the pinch of higher food prices,” says Gillian Petit, Affordability Action Council member and a senior research associate at the University of Calgary.

“Many people are not buying enough food so they can afford to pay the rent and their utility bills. Increased income support is needed to ensure that the food and essential needs of all Canadians are met.”

Navigating Canada’s tax and benefit system can be difficult, which is why the council suggests expanding a current tax benefit.

“This new income benefit, combined with efforts to make sure that those who are most vulnerable can access it through tax filing support, would fill a critical hole in our social safety net,” adds Lisa Rae, council member and director of system change at Prosper Canada.

While the federal government offered a one-time grocery rebate in 2023 (from $234 to $628), it appears there is no plan for the benefit to continue in 2024.

A spokesperson for the Department of Finance Canada indicated the benefit is not part of the 2024 budget and the government is working on improving the economy instead.

“The federal government’s responsible economic plan is focused on building an economy that works for everyone. It is investing to create good-paying jobs, to grow the economy, to build more homes, faster, and to make life more affordable,” the Department of Finance Canada said in an emailed statement to insauga.com.

“This fall alone, through both the Fall Economic Statement and Bill C-56, the government is introducing generational reforms to the Competition Act to help ensure grocery prices stabilize in Canada.”

See more details in the Affordability Action Council policy brief here.