Inflation is a global phenomenon driven in large part by the lasting impacts of a once-in-a-generation pandemic, and amplified by China’s ongoing COVID-zero policies and Russia’s illegal invasion of Ukraine.
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, highlighted the government’s Affordability Plan—a suite of measures totalling $8.9 billion in new support this year to help make life more affordable for millions of Canadians.
The measures in this Affordability Plan include:
1. Enhancing the Canada Workers Benefit
- By enhancing the Canada Workers Benefit at a cost of $1.7 billion in new support for workers this year, an estimated three million Canadians will receive more support, with a couple receiving up to $2,400 more this year and single workers receiving up to $1,200 more. Most recipients are just receiving this additional support through their 2021 tax return.
2. Affordable early learning and child care
- As a result of agreements reached with all 13 provinces and territories, child care fees for Canadian families will be cut by an average of 50 per cent by the end of this year. This Canada-wide plan means savings for families from $2,610 in Manitoba to $6,000 in British Columbia in 2022, and an average child care fee of just $10-a-day for all regulated child care spaces across Canada by 2025-26.
3. A 10 per cent increase to Old Age Security (OAS)
- Starting in July 2022, the OAS pension for seniors 75 years and older will increase by 10 per cent, which will provide more than $766 in new support to full pensioners in the first year, and increase the benefits received by more than three million seniors.
4. A housing affordability payment
- As work to make housing more affordable continues, the government will provide renters in 2022 a one-time $500 payment to nearly one million low-income Canadians struggling with the cost of housing.
5. Dental care for Canadians
- The government will provide dental coverage for Canadians earning less than $90,000, starting with children under 12 in 2022, so that families can afford the cost of dental care.
6. Benefits that are indexed to inflation
- Key government benefits continue to be adjusted for inflation over time, including OAS, Guaranteed Income Supplement, Canada Pension Plan, the Canada Child Benefit, and the GST Credit.
These supports build on other investments that the government has delivered since 2015 that are today helping to make life more affordable for Canadians. Budget 2022 also includes a comprehensive plan to make housing more affordable and outlines investments focused on growing a more resilient economy that will mean more good-paying jobs for Canadians.
“We know that Canadians are worried about inflation and that they’re asking what their government is going to do about it. That’s why we have a new Affordability Plan—$8.9 billion in new support this year—that is going to put more money in the pockets of Canadians at a time when they need it most.”
- Below are examples of how the government’s Affordability Plan will make life more affordable for Canadians:
- A couple in Ontario with an income of $45,000 and a child in daycare could receive about an additional $7,600 above existing benefits this fiscal year.
- A single recent graduate living in Alberta with an entry-level job and an income of $24,000 could receive about an additional $1,600 in new and enhanced benefits.
- For seniors, Old Age Security and Guaranteed Income Supplement benefits are 4.9 per cent higher than they were a year ago due to the quarterly indexation of these benefits. Those 75 and older will also benefit from a 10 per cent increase in the OAS pension announced starting in July 2022, which will provide more than $766 in new support to full pensioners in the first year.
- Canada has the strongest jobs recovery in the G7, and both the IMF and OECD predict that the Canadian economy will see the strongest growth in the G7 this year and next.
- For people in Ontario, Manitoba, Saskatchewan and Alberta, Climate Action Incentive payments mean a family of four will receive $745 in Ontario, $832 in Manitoba, $1,101 in Saskatchewan, and $1,079 in Alberta in 2022-23.
- Canada has recovered 117 per cent of the jobs that were lost during the depths of the pandemic, compared to just 96 per cent in the United States. Today, Canada’s unemployment rate is just 5.1 per cent—a record low.
- Canada also benefits from a strong monetary policy framework, which the government and the Bank of Canada renewed for another five years last December with a 2 per cent inflation target, and a control range between 1 and 3 per cent. The Bank has begun the work of bringing inflation back within target, and has the tools, independence, and the expertise it needs to deliver low, stable, and predictable inflation in Canada.
- Funding for the measures in this Plan was allocated in previous budgets—Canada’s fiscal framework remains as reported in Budget 2022.