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Grocery money, clean tech tax breaks expected in federal budget Tuesday

B次元官网网址楴ow itB次元官网网址檚 about how Canada needs to keep up and competeB次元官网网址

A second top-up to GST rebate cheques for low-income Canadians and B次元官网网址渟ignificantB次元官网网址 new tax measures to keep Canada in the green technology game will be among the highlights in Finance Minister Chrystia FreelandB次元官网网址檚 federal budget on Tuesday.

The document, FreelandB次元官网网址檚 third since taking on the finance post in the early months of COVID-19, will try to balance demands from Canadians to help ease the bite of inflation, and the economic need to keep pace with allies, including the United States, on clean technology.

Marci Surkes, a political strategist at Compass Rose, and a former senior policy adviser in the Prime MinisterB次元官网网址檚 Office, said in 2021, Freeland had to table a COVID-19 response budget. In 2022, it was a budget peeking around the corner from COVID-19, but still heavily tied to the pandemic.

B次元官网网址淭his budget really needs to be the B次元官网网址榓ll that starts to come nextB次元官网网址 budget,B次元官网网址 said Surkes. B次元官网网址淲e are through the worst of the pandemic, letB次元官网网址檚 hope. Now itB次元官网网址檚 about how Canada needs to keep up and compete.B次元官网网址

But it will also have to do something to focus on the B次元官网网址渉ere and nowB次元官网网址 said Surkes, as Canadians are still seized with the high cost of living following months of above-normal inflation.

To that end, a government official, who was granted anonymity to discuss matters that will not be public until the budget is released, said Freeland will offer a second GST rebate top-up framed this time as help to offset higher grocery bills.

The measures, which were first reported by CBC B次元官网网址, will also include an increase to the withdrawal limit for a registered education savings plan from $5,000 to $8,000.

Prime Minister Justin Trudeau said Monday the goal is to help people in a targeted way.

B次元官网网址淕roceries will certainly be part of it, but thereB次元官网网址檚 others things as well that weB次元官网网址檙e going to continue to do to be there for Canadians,B次元官网网址 he said before question period.

The grocery benefit will be described as cash to help with food bills, but it wonB次元官网网址檛 require any proof of how itB次元官网网址檚 spent. It will instead mimic the GST rebate top-up last fall.

Maximum benefits, generally paid to individuals and families with incomes up to $35,000 will be the same as they were for the GST top-up in the fall: $234 for a single person with no children, $467 for a couple with two children and $225 for a senior citizen. Smaller amounts are sent as incomes grow to a maximum income of $60,000.

CanadaB次元官网网址檚 most recent Food Price Report predicted grocery bills for a family of four will be about $1,065 more this year.

Inflation overall fell to 5.2 per cent in February, after averaging nearly seven per cent in 2022. But grocery prices in February were still 10.6 per cent higher than a year earlier.

Regular GST rebate cheques will increase again in July, when they are automatically indexed to inflation. Statistics Canada said annual inflation in 2022 was 6.8 per cent so GST rebates, along with other benefits such as the Canada Child Benefit and Old Age Security, will be increased around that amount this summer.

The budget will also look to further CanadaB次元官网网址檚 attempt to stay competitive on clean technology, a transformation Freeland has likened to the greatest economic overhaul since the Industrial Revolution.

She has warned if Canada does not use this time to make Canadian industry competitive, it will lose the chance.

Three sources, whom The Canadian Press granted anonymity because they were not authorized to speak publicly about the budget, said there will be new tax credits for the green economy. One of those sources described the tax credits as B次元官网网址渟ignificant.B次元官网网址

That includes tax credits to spur growth in both critical mineral production and the electric vehicle supply chain. Both played a major role Friday when U.S. President Joe Biden visited Ottawa, as Canada and the U.S. make a play to create a North American supply chain for the green automotive industry.

The LiberalsB次元官网网址 fall economic update already promised tax credits for hydrogen production and clean electricity, and those are both expected to roll out in the budget, but there will be additional tax credits beyond just those two.

All are expected to include new labour market standards, where companies that pay a market wage or include apprenticeship training, will be able to claim a bigger credit than those that do not.

Such incentives were inspired by the United States Inflation Reduction Act and Freeland included them for the hydrogen and clean tech tax credits in the fall economic statement. She later launched a consultation to guide the new policy, and details of exactly how they will work are expected Tuesday.

Surkes said the budget for any government is as much about politics as it is about finance. A budget, she said, is a sales pitch to Canadians about where the Liberals plan to B次元官网网址渟teer the shipB次元官网网址 in the coming months and years.

And one of the political challenges faced with a focus on tax credits for businesses, is keeping those in perspective for average people.

B次元官网网址淚t has to be all about jobs,B次元官网网址 said Surkes. B次元官网网址淭hey need to connect the points for the public, be clear, simple, direct and to the point.B次元官网网址

They also have to keep the NDP happy, and the move to top-up the GST is helping do that.

NDP Leader Jagmeet Singh, who previously called on the government to send a second GST top-up, took credit for the expected GST budget measure.

B次元官网网址淚t looks very much like what weB次元官网网址檝e been asking,B次元官网网址 he told reporters Monday afternoon.

In 2022 the NDP agreed to support the Liberals on confidence matters, such as budgets, in exchange for the government enacting some NDP priorities, including affordability measures and dental care.

The Conservatives, who have been highly critical of government spending and blame it for driving up inflation, want to see signs of restraint on Tuesday. Conservative Leader Pierre Poilievre asked the Liberals to match every dollar of new spending with cuts elsewhere.

Conservative MP Garnett Genuis said Monday the GST top-up B次元官网网址渉elps, but itB次元官网网址檚 not addressing the core problem, which is out-of-control inflation across the board.B次元官网网址

The budget is also expected to introduce a plan to go after hidden or unexpected fees B次元官网网址 called B次元官网网址渏unk feesB次元官网网址 B次元官网网址 tacked on to the price of goods and services.

B次元官网网址擭ojoud Al Mallees and Mia Rabson, The Canadian Press





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