Canada Revenue Agency Tax Relief: Did You Receive Your $400 GST Payment?

The CRA created several new benefit payments to help Canadians with their financial burdens during COVID. It also offered “bonus” payments with some of the existing ones, like GST.

| More on:

The GST/HST was created to help individuals and households with low to modest incomes. Whenever we buy something, we pay taxes to the provincial and federal governments. The GST credit is the way the government pays back that tax to the people who might need it more. The amount of tax credit increases for a household with kids since you can receive separate credit for each child.

This is a routine credit and is not part of the special payments created and released by the CRA to help the people cope with the financial burden of the COVID. However, the CRA released an additional GST payment to the typical GST recipients on April 9. This didn’t impact their routine payment and was calculated based on their 2018 tax returns, and on average, boosted the GST payouts by about $400.

If you receive GST credit every year, were eligible for the payment and filed your 2018 taxes, you should have received this payment. If you didn’t, you might need to contact the CRA and see if there is an option for retroactive payment. Even if you don’t need it, you can put it to use by investing it in a good stock.

An asset management company

IGM Financial (TSX:IGM) is a Winnipeg-based asset management company with a market capitalization of about $10.8 billion and about $167 billion worth of assets under management, and $190 billion worth of assets under administration. The balance sheet of the company is strong, and even after a decent recovery pace, the stock hasn’t become overpriced.

The best part about this stock is its generous dividend yield of 6.4%. The company hasn’t increased its dividends even once in the past five years, but it’s also not expected to slash its dividends. The payout ratio is also healthy.

A small amount like $400 in the company might benefit you if you opt for the DRIP program and forget about it. But if you have a heftier amount to invest, the yield can be enough to start a modest passive income.

A venture capital stock

Better use of the $400 might be the overpriced venture capital growth stock StorageVault Canada (TSXV:SVI). The stock is currently trading at a price of $4.2 per share, so $400 will get you about 95 shares in the company. The reason for considering SVI despite its overvaluation is its consistent growth pattern in the last decade.

Its 10-year compound annual growth rate (CAGR) is a powerful 42.4%. If it can maintain that rate for just one more decade, it can turn your $400 investment into $13,000. The company owns, develops, and leases out self-storage units and caters to both individuals and commercial businesses.

Foolish takeaway

The CRA benefits can be powerful financial help, especially during troubled times like we saw in 2020. But they should not be your last resort. Even with low income, there are ways to save and put away small amounts for investing.

Given enough time, you can create an emergency fund for yourself and won’t have to rely solely upon payments like the additional GST credit.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned.

More on Dividend Stocks

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »