Ali Ehsassi

Budget 2023 | Making Life More Affordable and Supporting the Middle Class

As the Budget 2023 plan continues to take place, Chapter One focuses on making life more affordable and supporting the Canadian Middle Class.

1. A New Grocery Rebate for Canadians

For 11 million low- and modest-income Canadians and families, the Grocery Rebate will provide eligible couples with two children with up to an extra $467; single Canadians without children with up to an extra $234; and seniors with an extra $225 on average. This will be delivered through the Goods and Services Tax Credit (GST Credit) mechanism.

Budget 2023 proposes to introduce a one-time Grocery Rebate, providing $2.5 billion in targeted inflation relief to the Canadians who need it most. The Grocery Rebate will be delivered through a one-time payment from the Canada Revenue Agency as soon as possible following the passage of legislation.

2. Cracking down on junk fees

This builds on recent steps the government has taken to protect Canadians from hidden costs, including:

Amendments to the Competition Act to strengthen protections against hidden prices.
Amendments to the Bank Act and Financial Consumer Agency of Canada Act to protect Canadians' rights and interests when dealing with their banks.

A new policy direction to the Canadian Radio-television and Telecommunications Commission to ensure Canadians can affordably and easily change, downgrade, or cancel services.

3. Cracking Down on Predatory Lending

The current criminal rate of interest under the Criminal Code, equivalent to 47 per cent APR (annual percentage rate), can trap Canadians in a cycle of debt that they cannot afford and cannot escape.

Introduce changes to the Criminal Code to lower the criminal rate of interest from the equivalent of 47 per cent APR to 35 per cent APR, and to launch consultations on whether the criminal rate of interest should be further reduced.

adjust the Criminal Code's payday lending exemption to require payday lenders to charge no more than $14 per $100 borrowed. This cap is in line with the lowest cap among provinces, in Newfoundland and Labrador.

launch consultations on additional revisions to the Criminal Code's provincial/territorial-requested payday lending exemption.

4. Lowering Credit Card Transaction Fees for Small Businesses

To support hardworking owners of small businesses, the federal government has been working closely with the payment card industry and small businesses to lower these transaction fees.

As of 2023, the government has secured commitments from Visa and Mastercard to lower fees for small businesses.

More than 90% of credit card-accepting businesses will see the interchange fees reduced by up to 27 per cent from the existing weighted average rate.

This will save Canadian businesses approximately $1 billion over 5 years.

5. Supporting your right to repair

When it comes to broken appliances or devices, high repair fees and a lack of access to specific parts often mean Canadians are pushed to buy new, instead 0f making repairs

The government will work to implement a right to repair, with the aim of introducing a targeted framework for home appliances and electronics in 2024.

6. Common Chargers for Your Devices

Every time Canadians purchase new devices, they need to buy new chargers t0 go along with them, which drives up costs and increases electronic waste

The government will work with international partners and other stakeholders to explore implementing a standard charging port in Canada

7. Automatic Tax Filing

Budget 2023 announces that the federal government will increase the number of eligible Canadians for File My Return, and in the 2022 tax filing season, approximately 53,000 returns were filed using this service.

The federal government will increase the number of eligible Canadians for File My Return to two million by 2025 - almost triple the current number.

The CRA will pilot a new automatic filing service that will help vulnerable Canadians who currently do not file their taxes receive the benefits to which they are entitled.

8. Making Life More Affordable for Students

Budget 2023 proposes to provide $813.6 million in 2023-24 to enhance student financial assistance for the school year starting August 1, 2023.

This support aims to address:

Increasing Canada Student Grants by 40 per cent - providing up to $4,200 for full-time students.

Raising the interest-free Canada Student Loan limit from $210 to $300 per week of study.

Waiving the requirements for students aged 22 years or older, to undergo credit screening in order to qualify for federal student grants and loans for the first time.

This will allow up to 1,000 students to benefit from federal aid in the coming year.

These changes will allow post-secondary students to access up to $14,000 in enhanced Canada Student Financial Assistance for the upcoming school year.

9. Improving Registered Education Savings Plans

In a typical year, nearly 500,000 students withdraws funds from their RESP's (Registered Education Savings Plan), however the withdrawal limits have not increased in 25 years.

Therefore, Budget 2023 proposes to increase limits on certain RESP withdrawals from $5,000 to $8,000 for full-time students, and from $2,500 to $4,000 for part-time students.

Budget 2023 also proposes to allow divorced or separated parents to open a joint RESP for their children, which will make it easier and more affordable for parents to save for their children's education.

10. Supporting Our Seniors

The Old Age Security program - consisting of the OAS pension, the Guaranteed Income Supplement (GIS), and the Allowances - is Canada's largest federal program, forecasted to provide $75.9 billion in support to seniors in 2023-24.

A ten per cent increase to the maximum GIS benefit for single seniors

Reversing the previous government's announced increase to the eligibility age for OAS and GIS back to age 65 from 67, providing financial security to those aged 65 and 66.

As of July 2022, a ten per cent increase to the OAS pension for seniors age 75 and over, which is providing additional benefits of over $800 to full pensioners in the first year.

As well as $6 billion over ten years to provinces and territories for the delivery of home care services for seniors who want to continue to live at home.

Because of the government’s investments, the indexation of benefits to inflation, and the growing seniors population, OAS, GIS, and Allowance expenditures are projected to grow by close to 30 per cent to $96.3 billion in 2027-28 from 2023-24—an increase of more than $20 billion per year and growing.