Commencing tomorrow, a significant number of low- and modest-income Canadian workers will receive their initial automatic advance payments of the newly improved Canada Workers Benefit, as declared by Deputy Prime Minister and Minister of Finance, Chrystia Freeland.
Originally introduced in 2021, the enhancements to the Canada Workers Benefit aimed to broaden eligibility, benefiting an additional one million workers. Now, with the recent approval of Bill C-47, recipients will receive much-needed assistance earlier than before. Previously, individuals had to wait until they filed their taxes to access this vital support, which plays a crucial role in helping them cover essential expenses such as groceries and rent. The expedited delivery of these payments will offer immediate relief to those who need it most, alleviating financial burdens and promoting economic well-being for Canadian workers.
To top-up the incomes of our lowest-paid—and often most essential—workers, the Canada Workers Benefit will provide up to $2,616 total for an eligible family, and $1,518 total for eligible single workers, split between three advance payments this fiscal year (in July 2023, October 2023, and January 2024), and a final payment after filing their 2023 tax return.
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, with no need to apply.
“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 at a time when they need it most,” said the Deputy PM and Minister of Finance.
As of July 2023, Canada’s inflation rate has declined to 2.8 per cent, falling back within the Bank of Canada’s target range of 1 to 3 per cent. This marks the lowest inflation rate in over two years, a significant improvement from the peak of 8.1 per cent in June 2022, and Canada’s inflation rate is now lower than that of any other G7 country.
To support Canadian workers, the government took important steps in Budget 2021 by expanding eligibility for the Canada Workers Benefit, benefiting an additional one million workers. Building on this, the 2022 Fall Economic Statement introduced automatic advance payments for the Canada Workers Benefit, aiming to provide financial assistance to the lowest-paid and most essential workers more efficiently.
On June 22, 2023, the legislation to implement automatic advance Canada Workers Benefit payments, Bill C-47, the Budget Implementation Act, 2023, received Royal Assent, solidifying its realization.
The Canada Workers Benefit is a refundable tax credit designed to supplement the earnings of low- and modest-income workers. To ensure its relevance amid changing economic conditions, the benefit is indexed to inflation each year, providing some relief against the rising cost of living.
With the introduction of automatic advance payments, eligible individuals now receive a minimum entitlement for the year, and this entitlement will not decrease, even if their income increases compared to the previous year. These advance payment amounts are based on the income reported in the previous year’s tax return, replacing the previous application-based advance payment system that ceased on January 1, 2023. Notably, applicants no longer need to apply separately for the Canada Workers Benefit.
As an example, a single worker earning $25,000 per year received $1,200 through the Canada Workers Benefit for 2022. With the new automatic advance payments, they are entitled to three quarterly advance payments of $200, scheduled for July 2023, October 2023, and January 2024. An additional $600 payment will be provided after filing their 2023 taxes in early 2024.
The automatic advance Canada Workers Benefit payments complement other benefits and targeted inflation relief measures aimed at making life more affordable for those who need it most. By incorporating enhancements to the Canada Workers Benefit alongside reduced childcare costs, the Canada Child Benefit, the Canada Dental Benefit, the Grocery Rebate, the Pollution Pricing Rebate, and tax relief through the increased Basic Personal Amount, Canadian households can benefit significantly.
For instance:
A single parent with one child in Newfoundland and Labrador, earning $40,000 in 2023, could receive $7,300 in benefits.
A single person without children in Alberta, earning $23,000 in 2023, could receive $2,200 in benefits.
A family of four in Ontario, with two working parents earning $39,000 in 2023, could receive $8,700 in benefits.
A family of four in Nova Scotia, with two working parents earning $57,000 in 2023, could receive $8,100 in benefits.
These measures aim to alleviate financial burdens for Canadian workers and families and contribute to fostering economic well-being and growth across the nation.
