Grocery rebate for Canadians kicks in. Who is eligible?

Eleven million Canadians are set to receive the federal government’s one-time “grocery rebate” on Wednesday as high food prices persist across the country.

The payment, which will arrive alongside July’s GST tax credit payment, was a signature item in the Liberals’ 2023 budget. Grocery rebate payments are being delivered by direct deposit or cheque through the Canada Revenue Agency (CRA).

The rebate was introduced as a way to compensate Canadians for higher grocery prices due to inflation, though it can be spent on anything.

The rebate will be for low- and modest-income Canadians and families, the government has said: up to $467 for eligible couples with two children; $234 for single Canadians without children; and $225 for seniors, on average.

The federal government also provided a similar payment last fall in what it said was an effort to blunt the effect of high inflation on low and modest-income families.

Canada’s inflation rate slowed to 3.4 per cent in May, but grocery prices continue to rise rapidly, with prices up nine per cent compared with a year ago. A report by the Competition Bureau released last month found a lack of competition in the Canadian grocery industry is impacting food prices.

“While inflation in Canada has fallen to 3.4 per cent in May – down from 4.4 per cent in April, and from a high of 8.1 per cent last June rising grocery prices remain a challenge for too many Canadians,” Finance Minister and Deputy Prime Minister Chrystia Freeland said in a news release Wednesday.

“With the Grocery Rebate payments being delivered to 11 million low- and modest-income Canadians starting today, our government is continuing to provide inflation relief to Canadians who need it most.”

There is no need to apply for the rebate. Individuals and families who were entitled to receive the GST/HST credit for January 2023 and who filed a tax return for 2021, even if they have no income to report for that year, can expect to receive the payment.

The amount received will be calculated based on “your family situation in January 2023 and your 2021 adjusted family net income,” the CRA said in a news release last week. The rebate will be issued automatically to Canadians whose household income is $38,000 or less, and individuals who make $32,000 or less.

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However, the agency flagged that it is possible Canadians may be entitled to the Grocery Rebate, but not the July GST/HST credit or vice versa.

“The Grocery Rebate is calculated based on your 2021 tax return, but the next quarterly GST/HST credit payment in July 2023 is calculated based on your 2022 tax return,” the agency said.

The CRA also notes that if you received your GST/HST credit payment as a lump sum in July 2022, you will still receive a grocery rebate.

How do you plan to spend your grocery rebate? Let us know at [email protected] or in the form below, and we may reach out to you for future stories on how the rebate is impacting Canadians.