Minister calls GST holiday, $250 cheques for 18 million Canadians ‘a targeted approach’

Women and Gender Equality and Youth Minister Marci Ien is calling the federal government’s proposed GST holiday and $250 rebate cheques a “targeted approach” to address affordability concerns.

“This is a targeted approach to the holidays, and that’s what this is about,” Ien told CTV Question Period host Vassy Kapelos in an interview airing Sunday.

On Thursday, the federal government announced a two-month Goods and Services Tax/Harmonized Sales Tax (GST/HST) break on a variety of essential items and consumer goods that will apply across the country between Dec. 14 and Feb. 15.

In April, the Trudeau government also plans to send a “Working Canadians Rebate” to Canadians who make $150,000 per year or less. The government’s own estimation is that 18.7 million Canadians will qualify.

Both measures will cost the federal government a combined $6.3 billion and have the support of the NDP to move ahead.

The relief measures are a major reversal for the Trudeau government, which has previously advocated for more targeted cost-of-living supports and spoken out as recently as May against rebate cheques, describing them as inflationary.

When pressed by Kapelos over whether a rebate to Canadians who make $150,000 or less can be qualified as targeted, Ien said, “It is with regard to the middle class.”

Kapelos also asked Ien about high youth unemployment in the country. According to Statistics Canada, the unemployment rate in October for Canadians between 15 and 24 years old was 12.8 per cent, more than double the rate of 5.6 per cent for those between 25 and 54 years of age.

Asked if the proposed measures could have been provided to that demographic instead, as an example, Ien pointed to the relief coming to their parents.

“If those families are saving money, if they’re saving money at the grocery store under this tax break, this holiday tax break, if they are saving money when it comes to the buying of Christmas presents and making sure that families can come together and save money in doing so, then entire families benefit,” Ien said.

Asked by reporters on Friday why rebate cheques were not being given to seniors or those with disabilities, as well, Prime Minister Justin Trudeau said he’s been hearing “from working Canadians who are having trouble making ends meet.”

“It’s about seeing Canadians as the hard-working nation builders as they are and giving them that support that they need at this time of challenge,” Trudeau said.

But in an interview with CTV News, EY Canada tax policy leader Fred O’Riordan called the federal government’s latest announcement a “missed opportunity” and said it “wasn’t properly targeted.”

“Instead of having a threshold, an income threshold of $150,000 where everyone gets the same $250 cheque, they should have had a graduated scale where people in most need would get most benefit,” O’Riordan said.

There are also questions about how the federal government can afford the $6.3 billion relief package at a time when it has previously pledged fiscal responsibility.

According to a recent report from the parliamentary budget officer, the federal government is expected to run a deficit of $46.8 billion in the 2023-24 fiscal year, which is more than the $40 billion projected in the April budget.

“Affordability is an interesting question at this stage,” O’Riordan said. “People should bear in mind that every additional spend that the federal government announces is borrowed money.”

An update on the federal deficit is expected in the coming weeks in the fall economic statement.

When asked by Kapelos whether the relief measures could be extended beyond the two months, Ien would not say.

“That is something for the minister of finance and the prime minister to consider,” Ien said.

You can watch the full interview with Minister Marci Ien on CTV Question Period on Sunday at 11ET/8PT on CTV and CTV News Channel.