Last updated: February 08 2024

February 6 Economic Plan: New Spending, But No Tax Relief

Evelyn Jacks

The federal government announced over $200 million in new rent and emergency shelters support as well as $5 million a year to fund consumer research, investigate and reveal harmful business practices, all as part of its economic plan. Sadly, there was no broad-based tax relief to put money into the hands of consumers.  Here’s what was announced and how filing a tax return before the end of the month could provide more broad-based help instead.

The government is providing $99 million is topping up the Canada Housing Benefit which goes to provincial and territorial rent support programs to make rent more affordable to 300,000 households by 2027-28.  In addition, $100 million is going to 85 communities across Canada to provide winter shelter and meals for the homeless.        

This funding is in addition to $362.4 million for the Interim Housing Assistance Program, which provides shelter to vulnerable asylum seekers from violence, war and persecution. 

On the issue of food insecurity, the Minister of Innovation, Science and Industry, has tripled federal funding for Canada’s Contributions Program for Non-profit Consumer and Voluntary Organizations to $5 million per year.  

What exactly does this department do?  According to the government it was established to support Canadian non-profit consumer organizations “in the production of high quality, independent and timely research on consumer issues. It also aims to strengthen capacity building for consumer organizations to help fulfil their mandates, increase their visibility, membership and self-sufficiency in the interest of Canadian consumers. This program funds projects of up to 2 years through non-repayable contributions under two funding streams (a research stream and a development stream). The complete list of awarded amounts under the Program for 2023-25 is now available. New open call for proposals coming in winter 2024.”

In addition, in partnership with consumer advocacy groups, the federal government promises to investigate and reveal price inflation and harmful business practices, such as shrinkflation and skimpflation in the grocery sector which have increased retail prices.

What could have been done?   To put more money into the pockets of working people for rent and food, the government could have raised the basic personal amount to take low-income earners off the tax rolls completely.  It could also have considered holding the line on increases to the Canada Pension Plan and Employment Insurance Premiums until inflation is under control. 

Make a Difference.  For those who can’t access any of this new funding, filing a tax return early can put a tax refund into pockets quickly after the February 19 start date for processing 2023 tax returns. Tax and financial advisors can make a big difference getting out into their communities to share tax literacy. 

Lower income families will be able to access their tax refunds quickly, and many will qualify for refundable tax credits.  Others with the capacity for savings,  will want to make an RRSP contribution by February 29 in order to reduce their net income, increase refundable credits that begin later in the year, pay less tax by making an RRSP contribution.