The Cost of Living Relief Act, No. 1 proposes to double the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit for six months to help low- and middle-income individuals and families manage rising living costs. It introduces a new formula for calculating payments based on income, dependents, and custody arrangements.
Low- and middle-income families, especially those with dependents or shared custody situations, stand to benefit from higher GST/HST credits, which could make a difference in their monthly budget. However, the complexity of the new formula may confuse some taxpayers and lead to potential errors in claiming credits.
The government is expected to incur significant spending by increasing the GST/HST credit, which may lead to budgetary challenges. While low- and middle-income families may receive financial relief, there’s potential for higher taxes or spending cuts in the future to balance this increase. Citizens might also face costs related to navigating the new system if the calculations become complicated.
Supporters of the bill believe it provides essential financial support to those who need it most, particularly amid inflationary pressures. They argue that this targeted relief can help households manage their expenses better, thus improving their overall quality of life in challenging economic times.
Critics argue the bill could lead to greater government expenditure, posing risks to fiscal responsibility and long-term budgets. They believe that, while the bill addresses immediate needs, it fails to tackle the underlying issues contributing to inflation. Moreover, the complexity of the new payment calculations may result in confusion, undermining the effectiveness of the relief intended.
That the bill be now read a third time and do pass.