Much of the federal Liberal government’s 2023 budget is geared towards helping Canadian households make ends meet — or on the very least, for instance, shaving a number of dollars off the fee of a concert ticket.
Finance Minister Chrystia Freeland teed up the 2023 spending plans as providing support for vulnerable Canadians who’re feeling stressed about their very own budgets after a yr of high inflation and rapidly rising rates of interest.
Some proposed measures will make a direct impact on households, while others will change the sorts of charges and rates of interest businesses can levy at Canadians.
Listed here are five big takeaways from the federal budget you’ll wish to learn about.
One highly touted measure within the 2023 budget is a one-time tax rebate aimed toward helping Canadians deal with rampant food inflation.
The so-called “grocery rebate,” as reported by Global News and others ahead of the budget’s release on Tuesday, can be aimed toward lower-income households. It could be delivered through the prevailing GST tax credit mechanism, with an estimated 11 million Canadians and families expected to qualify to receive the support.
The rebate is predicted to deliver $467 on to a family of 4, $234 to a single Canadian without kids and $225 to the common senior.
Despite the name, the federal government won’t be checking that the rebate is spent directly on groceries.
But on condition that prices for food from the food market clocked in at 10.6 per cent annual inflation in February and has remained in double-digits for the reason that summer, groceries proceed to be major stressors on household budgets.
The timeline for the rollout of this rebate is uncertain and depends upon when and if the 2023 budget is passed in Parliament.
Within the 2023 budget, the Liberal government is declaring war on “junk fees” — defined as “unexpected, hidden and extra fees” that crop up on every part from concert tickets to airfare, from telecom services to excessive shipping costs.
Details were sparse on how and when the federal government would tackle these fees, however the budget said Ottawa would work with regulatory agencies, provinces and territories to cut back unfair and excessive costs on some common expenses.
The USA government recently announced an identical crackdown on fees as consumers have swiftly complained online up to now few years concerning the exorbitant amounts charged for tickets to popular live shows, for instance.
While some measures within the 2023 budget might reduce what you pay on airfare, others could see those costs rise.
The air travellers security charge (ATSC), which is often paid by passengers on their tickets and helps to fund security screening and baggage protection services in Canada, is about to rise under the 2023 budget proposals.
The ATSC rate for a round-trip domestic flight would rise almost $5 to $19.87 under the brand new regime, while a world flight will see the charge hiked by nearly $9 to $34.42 on a flight out of Canada.
The federal government also announced its plans to assist Canadians coping with high rates of interest on some loans.
Debt-servicing payments have grown rapidly over the past yr because the Bank of Canada raised rates of interest in an effort to chill spending and take some stream out of inflation. An increase within the central bank’s benchmark policy rate affects multiple sorts of debt, including mortgages, lines of credit and bank cards.
For Canadians battling mortgage payments after a yr of rate hikes, Ottawa proposed a recent mortgage code of conduct within the 2023 budget.
Through the Financial Consumer Agency of Canada, the document would direct financial institutions to supply Canadians struggling to make mortgage payments with “fair and equitable access to relief measures.”
This might include adjusting payment schedules, extending amortizations on the loan or authorizing lump-sum payments, strategies some lenders already offer to clients who’re at risk of defaulting on their mortgage.
Beyond mortgages, Ottawa can also be planning to crack down on payday loans and predatory lenders.
The budget notes that these loans often goal low-income and other vulnerable Canadians with a promise of quick relief at the fee of “very high rate of interest loans” that may find yourself trapping consumers in a cycle of debt.
The Liberals are proposing to amend the Criminal Code to lower the brink at which a rate of interest can be considered criminal from today’s annual rate of 47 per cent federally to 35 per cent, consistent with the present rate in Quebec.
Payday lenders would also have the opportunity to charge Canadians not more than $14 per $100 borrowed under the brand new regime, bringing it right down to the cap currently in place in Newfoundland and Labrador.
The federal government can also be planning to chop down on the variety of charging cables Canadians have lying around their kitchen drawers by standardizing the charging port for smartphones and other devices.
Following the lead of the European Union, which signalled it will mandate USB-C charging ports for small handheld devices and laptops by the top of 2024, Ottawa will even work with international partners to “explore implementing a typical charging port in Canada,” in accordance with the budget.
The document said standardizing the charging port on phones and other devices could lower costs for Canadians and cut down on electronic waste.
Also within the vein of cutting down on waste, the Liberals are proposing a recent “right to repair” framework for existing devices.
Currently, fixing broken appliances or devices can include high fees or face delays when specific parts aren’t available.
The federal government is trying to roll out a framework in 2024 to make electronics easier to repair with spare parts expected to be readily accessible.
“By cutting down on the variety of devices and appliances which are thrown out, we are going to have the opportunity to make life more cost-effective for Canadians and protect the environment,” the budget read.
Ottawa can also be trying to help the estimated 12 per cent of Canadians who don’t currently file tax returns make the most of advantages they could currently be missing out on.
Starting in 2023, the Canada Revenue Agency is predicted to pilot a recent “automatic filing system” to assist vulnerable Canadians who don’t commonly file taxes receive the advantages they’re entitled to receive.
The federal government also intends to expand its existing auto-file program, File My Return, which sees low-income Canadians file returns by answering a number of questions over the phone.
Ottawa plans to almost triple the variety of Canadians eligible for the auto-file program to 2 million by 2025.