Will the CRA Announce a Grocery Rebate in 2024?

Will the CRA reintroduce the grocery rebate in 2024 given the rising cost of food products and high inflation numbers?

| More on:
A woman shops in a grocery store while pushing a stroller with a child

Source: Getty Images

The Canadian government introduced the one-time grocery rebate in 2023 to offer financial support to low- and modest-income Canadians. The rebate aims to help individuals and households cope with inflationary pressures on essential food items.

The Canada Revenue Agency (CRA) has not yet announced a grocery rebate for 2024. However, as low-income Canadian households struggle to meet monthly expenses, a similar rebate can be expected soon.

Last year, eligible Canadians received the grocery rebate payment in July 2023, alongside the GST/HST credit, which ranged between $234 and $628. A single individual with no child would have received $234, while a married couple with four children would receive $628.

What is the grocery rebate in Canada?

The grocery rebate was a one-time payment made to eligible Canadians to assist them with the rising cost of groceries. To qualify for the rebate, the recipient should be over the age of 19 and entitled to receive the GST/HST credit. The income threshold for individuals was $45,000, while for a married couple, the combined income threshold stood at $65,000.

According to a report from Agri-Food Analytics, an average family of four in Canada is expected to spend close to $16,300 on food supplies in 2024, up $702 year over year. The most significant price increases are in categories such as bakery, vegetables, and meat.

The rising cost of essentials such as food might prompt the Canadian government to introduce a similar rebate in 2024.

Take advantage of these benefits and build wealth

The rising cost of food products and other essential items has made it difficult for low- and modest-income Canadian households to invest a meaningful portion of their savings. Steep inflation rates have meant the savings rate for Canadian households has fallen from 8.8% in the first quarter (Q1) of 2022 to 6.2% in Q4 of 2023.

However, it’s crucial to continue investing in inflation-beating asset classes such as equities, bonds, and gold to generate wealth over time. One way to do so is to invest proceeds received from benefits such as the grocery rebate and GST/HST credit into low-cost passive funds that track popular indices, including the S&P 500.

According to Warren Buffett, a low-cost index fund that tracks the S&P 500 index is the best way to gain exposure to the equity market. In the last six decades, the S&P 500 index has returned 10% on average each year after adjusting for dividend reinvestments. These returns are quite encouraging, given that the global economy has navigated multiple economic downturns, such as the dot-com bubble, the financial crash, and the COVID-19 pandemic in this period.

One Canadian exchange-traded fund that tracks the S&P 500 index is Vanguard S&P 500 Index ETF (TSX:VSP). This TSX ETF is hedged to the Canadian dollar shielding investors from fluctuation in foreign exchange rates.

A $1,000 investment in the S&P 500 index 30 years back would have ballooned to $11,660 today. However, after accounting for dividends, cumulative returns would be closer to $20,000. The S&P 500 index is hugely popular as it offers you exposure to the 500 largest companies in the U.S., including mega-cap giants such as Apple, Microsoft, and Nvidia.

An index fund offers investors portfolio diversification, which lowers overall investment risk. It is a capital-efficient strategy that has gained popularity among investors in the last two decades.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

More on Stock Market

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, July 18

Despite yesterday’s negative reversal, the TSX Composite benchmark still trades with solid 4.5% month-to-date gains.

Read more »

Stock Market

Here Are My Top 3 TSX Stocks to Buy Right Now

Looking for some businesses that could have upside from here today? Check out these three top TSX stocks.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, July 17

Trading just below the key psychological level of 23,000, the TSX Composite has been posting fresh record highs for four…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Tuesday, July 16

The TSX Composite Index has notched new record highs for three consecutive sessions, showcasing its upward momentum.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Monday, July 15

The TSX Composite benchmark just posted its best weekly performance in over eight months, taking it to a fresh all-time…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Friday, July 12

Strengthening commodity prices and growing rate cut hopes in the United States are helping the TSX Composite benchmark touch new…

Read more »

calculate and analyze stock
Stock Market

Is it Too Late to Buy Dollarama Stock in July 2024?

Dollarama is a TSX stock that has crushed broader returns since its IPO in 2009. Is the growth stock still…

Read more »

edit Sale sign, value, discount
Stock Market

2 Absurdly Undervalued TSX Stocks to Buy in July 2024

Here's why investing in undervalued stocks such as Barrick Gold should help you deliver outsized gains going forward.

Read more »