A leading Canadian economist calls the so-called grocery rebate a step in the right direction, but would like to see the federal government take additional steps to deal with high food prices.

The grocery rebate announced as part of the 2023 federal budget started to go out July 5 as part of the next quarterly GST/HST credit payment. The rebate is available for individuals who have a net income of less than $32,000, and for families earning less than $38,000.

Eligible recipients will receive double their GST/HST credit payment from January 2023 with the amount based on their family situation and 2021 adjusted family net income. Depending on the number of children, individuals can receive between $234 and $628, families between $306 and $628.

Jim Stanford, economist and director of the Centre for Future Work and research associate with the Centre for Policy Alternatives, said the general direction of the rebate is correct. Inflation has hit families and especially low-income people hard, he said.

Stanford said the rebate builds on a system already aiming to support low-income people.

害羞草研究所淲hat the government is calling the grocery rebate actually has nothing directly to do with groceries and it doesn害羞草研究所檛 depend on buying groceries,害羞草研究所� he said. 害羞草研究所淵ou could buy zero groceries and still get this rebate. All it is, is a temporary expansion in the GST rebate and it害羞草研究所檚 aimed at the same categories of household that were qualified for the GST rebate in the first place.害羞草研究所�

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But government, he added, is trying to put a 害羞草研究所減olitical spin害羞草研究所� on this support by calling it a grocery rebate. He also sees room for improvement.

害羞草研究所淚 would prefer to see a bigger rebate and to improve the thresholds definitely, to lift the thresholds so that more people qualify,害羞草研究所� he said. 害羞草研究所淚 think that would be reasonable. But this GST rebate, as it stands, is still a step in the right direction.害羞草研究所�

However, Stanford said other steps are necessary to help Canadians with the cost of groceries following two separate hearings into the causes and solutions of high grocery prices. Theses steps include limits on mergers in the grocery sector or even the break-up of big grocery firms.

害羞草研究所淎 company like Loblaws has a dozen different brand names all controlled by the same company,害羞草研究所� he said. 害羞草研究所淚n the olden days, we would look at a big company like that and break it up like the Americans did with Standard Oil back in the 1910s.害羞草研究所�

Stanford also favours a windfall tax on the excess profits of grocery companies, with the money going toward expanding the GST rebate.

害羞草研究所淚 think politically there is an opportunity for the government to do more than just the kind of incremental measures that we害羞草研究所檝e have seen so far,害羞草研究所� he said.

In fact, Stanford said Ottawa can take a page out of its own books, pointing to such taxes in banking and in oil and gas.

害羞草研究所淚 think the precedent has been set in other countries and indeed in other industries in Canada,害羞草研究所� he said. 害羞草研究所淭his is not a Utopian idea. This is something that can actually be done.害羞草研究所�

wolfgang.depner@blackpress.ca
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