Canada’s Trudeau set to announce inflation relief for low incomes

Canadian Prime Minister Justin Trudeau is set to unveil measures on Thursday to provide inflation relief to low-income families, a government source said, confirming reports in domestic media.

Inflation eased to 7.6% in July from an almost four-decade high of 8.1%. But the Bank of Canada is still concerned about rising prices and is promising further interest rate hikes after increasing them to their highest level in 14 years on Wednesday.

Trudeau’s Liberal government will boost a tax-free quarterly payment that helps individuals and families with low and modest incomes offset sales tax, which is called the goods and services tax (GST) in Canada, said the source, who was not authorized to speak on the record.

The exact scope of the increase will be announced later on Thursday by Trudeau on the sidelines of a Cabinet retreat in Vancouver at 1230 pm ET (1630 GMT).

The government will also provide a C$500 ($381) onetime top-up to a housing benefit that is provided to low earners who need help paying rent, and it will provide initial details for a dental-care plan for low-income families.

These last two measures were part of an agreement Trudeau made with the opposition New Democrats Party (NDP) in March, and NDP leader Jagmeet Singh is also due to speak about the measures later on Thursday.

Trudeau’s Liberals were left a minority of seats in parliament after last year’s election, and the NDP support agreement means that the government could survive until the end of the legislature in 2025, while most minority governments have tended to last only a couple years.

One of the keystones of the agreement is setting up a national dental care system, and on Thursday the government will announce that it will pay for part of the dental visits for children under 12 in households that earn less than C$90,000 per year, the source said.

It is the first step in setting up a permanent dental care plan, according to the source.

($1 = 1.3127 Canadian dollars)