Times have been incredibly hard for many Canadians these days. Inflation continues to be up high enough that the Bank of Canada increased the interest rate once more. Inflation was up 3.4% in May, according to Statistics Canada. Meanwhile, interest rates are now at 4.75% after the Bank of Canada increased it by 25 basis points. And there could be another increase in July.
One of the top problems for Canadians remains buying groceries during these hard times. That’s what the newly introduced “grocery rebate” is aiming to address.
What is the grocery rebate?
The grocery rebate was introduced by the Canadian government for the 2023 budget. The aim is to help provide financial support for Canadians that are eligible for the program. The first rebate is scheduled to be issued next week, on July 5, 2023, and will be included with the next quarterly GST/HST credit payment.
How much could you receive? The Canada Revenue Agency (CRA) states that it will be the “equivalent to double the GST/HST credit amount you received for January 2023.” To get the rebate, you will first need to make sure of a few things.
Canadians wanting to gain the grocery rebate will need to have filed their 2021 tax return. From there, the rebate is calculated on your income. It’s important to note, however, that it is possible to be eligible to receive the rebate, but not the GST/HST credit, or vice versa, the CRA notes.
How much could you receive?
The CRA provides Canadians with a method of calculating how much they could receive from the grocery rebate. However, there are some basics that can be provided based on your family status as of January 2023.
If you are single, you can receive $234 with no children, or $306 if you’re married or have a common-law partner. If a single or couple in a household have children, you can receive $387 with one child, $467 with two, $548 with three and $628 with four children.
Again, you can find out exactly what you could receive by either using the online calculator or calling the CRA directly. However, should you be a couple with two children, this could add up to quarterly payments of $467, or $1,868 per year!
Be smart with your money
The grocery rebate should absolutely be used to keep your family safe. This might mean using it directly for groceries, debt payments, or other items that have become difficult to manage during this trying time.
However, it’s not unlikely that some Canadians have already cut back. They’ve budgeted and are now receiving this more as a windfall. With that in mind, it could be a good time to use this influx of cash to put towards investments and create an emergency fund.
In this case, why not invest in the companies that are seeing all these gains? Grocery providers have continued to see inflation benefit their bottom line, and while that’s not exactly great news for Canadians, it can be for investors. Two I would therefore consider are Loblaw (TSX:L) and Metro (TSX:MRU).
Both companies have seen shares rise in the last year and offer dividends for reinvestment as well. Loblaw stock is down recently from 52-week highs, providing a great time to jump in with a 1.51% dividend yield. Metro stock has performed roughly the same, with a 1.68% dividend yield as well.
As the market recovers, Canadians could use this cash to create even more funds for an emergency down the line. And that can be far more beneficial than anything the government throws at you.
