Ottawa's cash handouts largely benefit those who don’t need help

In October 2023, the federal government of Canada introduced two financial measures aimed at improving affordability for Canadians: the Working Canadians Rebate and a GST/HST exemption on groceries and holiday essentials. These initiatives targeted low- to moderate-income earners, allowing those with incomes up to $150,000 to receive a tax-free $250 cheque in the spring of 2024. However, many experts argue that the design of these measures fails to adequately support the Canadians who need it most. In particular, the broad income threshold means that higher-income individuals, who are generally not in financial distress, will also benefit. Critics believe that a more equitable approach would have involved a sliding scale of benefits that gradually decrease as income rises, thereby providing stronger support to those with lower incomes. A proposed adjustment is to lower the income threshold to the median income level of about $70,500, which could allocate more resources to those truly in need while maintaining a lower overall cost to the government. Additionally, under the current structure, even individuals who may be low-income, such as retirees with fixed pensions, are excluded from receiving these cheques, raising questions about the fairness and effectiveness of these policy decisions. Overall, the measures are expected to add significantly to Canada's deficit, which the Parliamentary Budget Officer had previously estimated at $46.8 billion for the last year. Many believe this spending, which amounts to roughly $6.28 billion, will push the deficit over $50 billion, thereby compromising the government's fiscal responsibility and long-term financial stability. As a result, there is widespread apprehension that these handouts do not effectively reach the Canadians in dire financial situations, with many arguing that the measures represent a missed opportunity for meaningful financial assistance.