Ottawa tabled its latest Federal budget for 2023. The hefty, 270-page document guides the investments of the Federal government for the coming year and years. High on the priority list for 2023: easing the effects of inflation, higher education, health care and clean energy.

The budget also impacts your own finances. For you, it might mean new credits. Or even a cheque in the mail to help you balance your budget. It might help you or your kids pay for rising tuition costs. Or foot the bill for your next dentist appointment.

Read on for select highlights of the 2023 Federal budget and what they might mean for you.

  1. Increasing the GST tax credit for eligible Canadians
  2. Upping withdrawal limits from RESPs
  3. Widening access to dental care
  4. Extending the qualifying period for the RDSP
  5. Cracking down on predatory lending

1. Increasing the GST tax credit for eligible Canadians

The Budget proposes an increase to the maximum Goods and Services Tax Credit (GSTC) amount for January 2023.

They’re calling this one-time hike to the GST “the grocery rebate.” Its goal is to help lower-income Canadians cover higher food and essential services costs. Combined with the GSTC, the Grocery Rebate would provide:

  • eligible families with 2 children an extra $468,
  • single Canadians with no kids up to $234 more, and
  • an average of $225 extra for seniors.

In short, eligible people would receive an additional GSTC amount equalling twice the amount they received for January.

The government will pay out the Grocery Rebate as soon as possible, through the GSTC system. 

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2. Upping withdrawal limits from RESPs

Students and their parents are also feeling the pinch from rising education costs. The Registered education savings plan (RESP) allows savings to grow tax-deferred until a child pursues a post-secondary education.

The Budget proposes to change some rules around RESPs. The changes would allow Educational Assistance Payments (EAP)* withdrawals of:

  • up to $8,000 (an increase from $5,000) in the first 13 consecutive weeks of enrollment for beneficiaries in full-time programs, and
  • up to $4,000 (an increase from $2,500) per 13-week period for beneficiaries in part-time programs.

*An EAP is the payment a beneficiary receives from the interest earned by an RESP, plus any Canadian Education Savings Grant, provincial grants or Canada Learning Bonds.

The Budget also proposes a benefit for divorced or separated parents. They’d be able to open joint RESPs for one or more of their children. Or they could move an existing joint RESP to another provider.

Other support for education

The Budget also proposes to help students starting their academic year on August 1, 2023.

This support includes increasing both:

  • the interest-free Canada Student Loan limit from $210 to $300 a week, and
  • Canada Student Grants by 40%.

3. Widening access to dental care

The government wants to widen access to dental care with the Canadian Dental Care Plan. It aims to provide dental care for uninsured Canadians with family incomes of less than $90,000.

Last year, the Canada Dental Benefit opened to children under the age of 12 from families:

  • with annual family income under $90,000, and
  • with no dental insurance.

This year, the program expands to Canadians under 18, as well as seniors.

Further expansion to all Canadians with family income under $90,000 and no dental insurance is expected by 2025.

4. Extending the qualifying period for the RDSP

A Registered Disability Savings Plan (RDSP) supports the long-term financial security of a beneficiary eligible for the disability tax credit.

A continuing problem has been how to open a plan for an adult beneficiary with mental disabilities:

  • whose capacity to enter into an RDSP contract is uncertain, but
  • there’s no legal representative to enter into those contracts for them.

In 2012, the Conservative government introduced a temporary measure. It allowed qualifying family members to open an RDSP for a mentally disabled adult beneficiary. That could happen, even though that family member had not been formally appointed as the beneficiary’s legal representative. A qualifying member is a parent, spouse, or common-law partner.

The measure was set to expire at the end of 2023. The Budget proposes to extend it by three years, to December 31, 2026.

The Budget also proposes to broaden the definition of a ‘qualifying family member.’ It would include a brother or sister of the beneficiary who is 18 years of age or older. 

5. Cracking down on predatory lending

What is predatory lending? It’s using fraudulent and deceptive tactics to encourage people to take out loans they can't afford. These predatory lenders often offer very-high-interest-rate loans.

The current criminal rate of interest under the Criminal Code is equivalent to 47% annual percentage rate (APR). That rate can trap Canadians in a cycle of debt that they can’t afford – and often can’t escape.

The Budget announces the federal government's intention to introduce changes to the Criminal Code. They would:

  • lower the criminal rate of interest from the equivalent of 47% APR to 35% APR (the rate is already 35% in Quebec), and
  • adjust the payday lending exemption to require payday lenders to charge no more than $14 per $100 borrowed.

Wondering what other impacts the budget might have on your spending and savings?

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