On July 28, millions of low- and modest-income Canadian workers began receiving their first automatic advance payments of the newly enhanced Canada Workers Benefit.
The initiative, announced by Deputy Prime Minister and Minister of Finance, Chrystia Freeland, aims to provide timely financial support to those in need.
The Canada Workers Benefit was expanded in 2021 to include an additional one million workers who were previously ineligible. Until recently, individuals had to wait until they filed their taxes to receive this support, which could be challenging for some to cover essential day-to-day expenses like groceries and rent.
To better assist low-paid workers, the government introduced automatic advance payments through the Canada Workers Benefit. Eligible families can receive up to $2,616 in total, while eligible single workers can receive up to $1,518, divided into three advance payments throughout the fiscal year (in July 2023, October 2023, and January 2024). A final payment will follow after filing their 2023 tax returns.
Crucially, low- and modest-income Canadian workers who received the Canada Workers Benefit in 2022 will automatically receive their advance payments from the Canada Revenue Agency without needing to apply.
Deputy Prime Minister Chrystia Freeland emphasized the importance of the benefit, stating, “The Canada Workers Benefit tops-up the income of up to 4.2 million hardworking Canadians—because no one working full-time should be struggling to put food on the table or to pay their rent. With the first quarterly Canada Workers Benefit payments going out tomorrow, we’re delivering important support to some of our lowest-paid and often most essential workers.”
It is also worth noting that as of July 2023, inflation in Canada has decreased to 2.8 per cent, within the Bank of Canada’s target range of 1 to 3 per cent. This is the lowest inflation rate in over two years, down from a high of 8.1 per cent in June 2022. Moreover, Canada’s inflation rate is currently lower than that of every other G7 country.
The Canada Workers Benefit is a refundable tax credit designed to supplement the earnings of low- and modest-income workers. It is indexed to inflation annually to help them keep up with the rising cost of living. With the introduction of automatic advance payments, individuals no longer need to apply to receive the benefit, and the amounts are based on the income reported in the previous year’s tax return. These advance payments replace the previous application-based option that was phased out as of January 1, 2023.
The enhanced Canada Workers Benefit is part of a broader effort by the government to support those in need and make life more affordable, it said in a press release. Other measures include reduced child care costs, the Canada Child Benefit, the Canada Dental Benefit, the Grocery Rebate, the Pollution Pricing Rebate, and tax relief from the increased Basic Personal Amount. These combined efforts are expected to bring significant benefits to individuals and families across the country.