Extra GST Credit and $2B to Provinces

Summary#

This bill makes two one-time changes. First, it authorizes a total of CAD $2 billion in extra federal payments to provinces and territories. Second, it grants an extra Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit that doubles the regular January 2023 GST/HST credit payment for eligible people (based on 2021 tax returns) (Bill Summary; ITA s.122.5(3.003), (4.3)).

• Extra provincial/territorial transfer: CAD $2 billion, with amounts set for each jurisdiction (F-PFAA amendment after s.24.73).
• One-time GST/HST credit top-up: an additional payment equal to the regular January 2023 GST/HST credit for eligible recipients (ITA s.122.5(3.003), (4.3)).
• Uses 2021 income to determine eligibility and amounts for the GST/HST credit top-up (ITA s.122.5(4.3)).
• Shared-custody parents receive a split amount under a special rule to mirror regular sharing (ITA s.122.5(3.04)).
• No conditions stated in the bill on how provinces/territories must use the CAD $2 billion (F-PFAA amendment after s.24.73).

What it means for you#

• Households and individuals

  • If you received a GST/HST credit in January 2023, you will get an extra one-time payment equal to that January amount. No application is needed if you filed your 2021 tax return (ITA s.122.5(3.003), (4.3)).
  • Eligibility and size of the credit depend on family status and income. The phase-out starts at adjusted family income above $39,826, with a 15% clawback rate (ITA s.122.5(3.003)(B)).
  • If you did not qualify for the January 2023 GST/HST credit, you will not receive this extra payment (ITA s.122.5(3.003), (4.3)).
  • If you share custody of a child, the extra payment is split between the parents under a specific formula that mirrors the shared-custody rule for the regular credit (ITA s.122.5(3.04)).

• Provinces and territories

  • Your government will receive a one-time federal payment in the amount listed in the bill. The bill does not set conditions on spending or reporting (F-PFAA amendment after s.24.73).
  • The transfer is a lump-sum payment authorized by the federal Minister; timing is not specified in the text provided (F-PFAA amendment after s.24.73).

• Businesses

  • No direct changes to business taxes or programs are included in this bill. Indirect effects may occur through household spending and provincial service budgets. Data unavailable.

• Local governments and service users

  • No direct provisions for municipalities. Potential indirect effects depend on how provinces and territories use their one-time funds. Data unavailable.

Expenses#

Estimated net cost: CAD $4.5 billion (one-time, 2023).

• Federal transfer to provinces/territories: CAD $2.0 billion (explicit in bill; amounts below) (F-PFAA amendment after s.24.73).
• One-time GST/HST credit top-up (“Grocery Rebate”): CAD $2.5 billion (Finance Canada, Budget 2023).

Provincial/Territorial distribution (one-time):

Notes:

• The GST/HST top-up uses 2021 income and is tied to the January 2023 payment month by law (ITA s.122.5(4.3)).
• The bill sets no dollar cap for the GST/HST top-up in the text; the total program cost above is from Budget 2023.

Proponents' View#

• Provides fast, targeted relief to low- and modest-income households by doubling the January 2023 GST/HST credit payment, reaching about 11 million recipients (ITA s.122.5(3.003), (4.3); Budget 2023).
• Uses existing CRA systems, so payments can flow automatically to eligible tax filers without a new application, reducing administrative delay and cost (ITA s.122.5(3.003)).
• Shared-custody rule ensures both parents receive their appropriate share, matching regular GST/HST credit treatment (ITA s.122.5(3.04)).
• One-time CAD $2 billion to provinces/territories provides immediate fiscal room to address service pressures; amounts are transparent and fixed in the bill (F-PFAA amendment after s.24.73).
• Income-testing (15% phase-out above $39,826) targets funds to those most affected by rising costs, limiting fiscal exposure (ITA s.122.5(3.003)(B)).

Opponents' View#

• One-time payments may offer only short-term relief and do not address underlying cost drivers; purchasing power may erode if prices continue to rise. Data unavailable.
• Eligibility based on 2021 income may miss households whose income fell in 2022–2023, while paying some whose current income increased; this time lag reduces precision (ITA s.122.5(4.3)).
• The bill does not set conditions or reporting on the CAD $2 billion provincial/territorial funds, so money may not target urgent needs or reduce wait times as intended (F-PFAA amendment after s.24.73).
• Fiscal impact is material (about $4.5 billion total). Critics may argue it adds to the deficit without long-term benefits (Budget 2023).
• Complexity of benefit formulas and shared-custody rules can cause confusion and errors, especially when amounts are tied to a past tax year and a specific month (ITA s.122.5(3.003), (3.04), (4.3)).