On Wednesday, eleven million Canadians are set to receive the federal government’s one-time “grocery rebate” as a response to persistently high food prices across the country. The payment, which will coincide with the July GST tax credit, was a prominent feature of the Liberals’ 2023 budget. The grocery rebate payments will be delivered through the Canada Revenue Agency (CRA) via direct deposit or cheque.
While the rebate was introduced to offset the impact of inflation on grocery prices, it can be used for any purpose. The government has specified that low- and modest-income Canadians and families will be eligible, with amounts varying based on household composition. Eligible couples with two children can expect up to $467, while single Canadians without children may receive $234, and seniors will receive an average of $225.
The federal government had previously provided a similar payment last fall to alleviate the impact of high inflation on low- and modest-income families. Although Canada’s inflation rate slowed to 3.4% in May, grocery prices continue to rise rapidly, experiencing a nine percent increase compared to the previous year. A report by the Competition Bureau released last month highlighted the lack of competition in the Canadian grocery industry as a factor influencing food prices.
Finance Minister and Deputy Prime Minister Chrystia Freeland clarified that the grocery rebate was not designed to completely alleviate the impact of inflation but rather aimed to strike a balance between compassionate support for those facing challenges and maintaining fiscal responsibility. Applicants do not need to apply for the rebate. Individuals and families entitled to receive the GST/HST credit for January 2023, and who filed a tax return for 2021, will automatically receive the payment.
The amount of the rebate will be calculated based on family situation in January 2023 and adjusted family net income from 2021. The CRA stated that the rebate will be issued automatically to households with an income of $38,000 or less and individuals earning $32,000 or less. However, it is possible that individuals may be eligible for either the Grocery Rebate or the July GST/HST credit, but not both, as the calculations are based on different tax returns.