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The 2023 Federal Budget: What it means for financially vulnerable Canadians
30 March 2023
Prosper Canada welcomes the 2023 federal budget’s focus on affordability for households. The new Grocery Rebate, the expansion of the dental benefit to uninsured Canadians with incomes up to $90,000, increases in Canada Student Grants and RESP withdrawal limits, and new investments in rural, remote and Indigenous housing will significantly benefit many Canadians.
We also recognize that other aspects of our social safety net also need to be strengthened. Canadians with disabilities urgently await implementation of the new Canada Disability Benefit, so we encourage the government to expedite the design and launch of this critical and much needed program. As our labour market continues to evolve and more Canadians earn their living through non-standard work, Canada’s Employment Insurance program must also evolve to enable all working Canadians to participate in the protections and support it offers. We urge the government to recommit to EI reform and to move this process forward.
We were heartened to see important financial consumer protection issues addressed in the Budget. The proposed reduction of the criminal rate of interest and capping of payday loan charges are important steps that will reduce the risk of unmanageable debt for people with low incomes. The appointment of a single external complaint body for financial services will also make it easier for financial consumers to access fair recourse for unresolved complaints.
We were also pleased to see the government take critical steps to expand access to automatic tax filing for vulnerable Canadians with low incomes, as well as access to quick and easy tax filing over the phone. Tax filing is the gateway to hundreds of federal and provincial income benefits and tax credits but an estimated $2 billion or more in government benefits currently go unclaimed by people with low and moderate incomes who encounter barriers to tax filing and accessing benefits successfully. If we are to successfully close this benefit take-up gap, parallel investments are needed in community financial help services that play a vital role every day in helping low-income and vulnerable Canadians to safely and successfully navigate Canada’s complex tax and benefit systems.
We also urge the government to exercise empathy and consideration for households in their recovery of COVID-19 benefits from those who were ineligible. Deferred and extended repayment plans should be proactively made available to anyone at risk of financial hardship and all possible measures taken to ensure recovery efforts do not plunge already vulnerable households deeper into financial crisis.
The financial challenges Canadian households are currently facing did not begin with the pandemic. Household savings levels have been steadily declining and debt levels rising for over 30 years. The pandemic and high inflation and interest rates, however, have created a rising tide of financial vulnerability. Moving forward, we encourage the Government of Canada to work collaboratively with community and financial sector stakeholders to explore and understand the longer term drivers of growing fainancial vulnerability, and to identify and advance solutions. As Canada’s national financial literacy strategy already correctly identifies, one of our priorities must be expanding access to affordable, appropriate and trustworthy financial help, particularly for vulnerable Canadians. Only then can we ensure that every person in Canada has access to the financial help and advice they need to build their financial well-being.
Elizabeth Mulholland, CEO Prosper Canada
2023 Budget summary