Budget 2023 will target grocery affordability with new tax rebate: sources

The 2023 federal budget, set for release Tuesday, will include a measure aimed to help some Canadians afford basic necessities such as groceries, according to a government source.

The federal government will announce a new tax rebate in the 2023 budget on Tuesday aimed at making basic necessities more affordable for some Canadians, government sources tells Global News.

What the government is calling a “grocery rebate” will be delivered through the GST tax credit mechanism and will be based on household income, according to two government sources who spoke on background because they were not authorized to speak publicly about the budget prior to its release.

An average family of four with two children would receive $467, while a single Canadian would be eligible for $234 in rebates.

The move comes amid soaring food inflation, though a source said the government won’t be checking to make sure it’s spent on groceries.

An estimated 11 million Canadian households of low or modest income are expected to benefit from the rebate.

The income threshold is expected to be the same as for the existing GST tax credit and based on eligibility as of January 2023.

The price tag for the measure is expected to come in north of $2 billion in Tuesday’s budget.

Finance Minister Chrystia Freeland has promised in pre-budget speeches that the 2023 spending plan would include “targeted” support for vulnerable Canadians after a year of decades-high inflation and rising interest rates putting pressure on households.