Budget to include rebate to help with groceries

OTTAWA - A federal source says Tuesday's budget will extend the temporary boost to the GST rebate for low-income Canadians, but will frame the payment as help with the rising cost of groceries.

The government official, who was granted anonymity to discuss matters that will not be public until the budget is released, said it will also include an increase to the withdrawal limit for a registered education savings plan from $5,000 to $8,000.

The measures, which will be part of the federal government's plan to help with affordability in the budget, were first reported by CBC News.

The grocery rebate is not expected to be tied to actual grocery bills and is instead set to be administered through the GST rebate system.

It would provide up to $234 for a single person with no children, $467 for a couple with two children and $225 for a senior citizen, the same amounts as the government offered with the temporary doubling of the GST rebate last fall.

The NDP had called on the federal government to extend the measure.

In the lead up to the budget, Finance Minister Chrystia Freeland has promised targeted inflation relief for low-income Canadians.

"In the weeks to come, for those Canadians who feel the bite of rising prices the most acutely, for our most vulnerable friends and neighbours, our government will deliver additional, targeted inflation relief," Freeland said in Oshawa, Ont. last Monday.

The expected GST rebate aims to help low-income Canadians squeezed by the rapidly rising cost of groceries. In February, grocery prices were 10.6 per cent higher than they were a year ago.

The Liberals are also expected to outline their plans to go after hidden or unexpected fees — called "junk fees" — tacked on to the price of goods and services.

In addition to help with the cost of living, Freeland has signalled the budget will include measures to keep Canada competitive amid the clean economic transition.

Several sources, whom The Canadian Press granted anonymity because they were not authorized to speak publicly about the budget, said there will be "significant" new tax credits for the green economy.

That includes tax credits to spur growth in both critical mineral production and the electric vehicle supply chain.

The Liberals' fall economic update had promised tax credits for hydrogen production and clean electricity already.

Both promised bigger tax credits to companies that pay fair wages and have apprenticeship training. Such incentives were inspired by the United States Inflation Reduction Act and have never been used in Canada before.

But the government is likely to include similar incentives on most new tax credits promised for clean energy going forward.