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Government Debt Relief Grants

Canadian Government Debt Relief Grants & Programs

If you are overwhelmed by your debt, you might be searching for government relief grants or debt relief programs to help you stay afloat. There are instances when the government will step in to support programs that provide financial relief to those who are struggling.

One of the most recent examples is the variety of government support provided during the COVID-19 pandemic. The government may also offer certain programs to help individuals or families reduce the burden of child care or health care. This article will take a look at past and present government assistance programs as well as other debt management programs available.

Covid-19 Benefit Programs

During the COVID-19 pandemic, the government provided various government benefits to help individuals and businesses meet their needs. The Canada Emergency Response Benefit (CERB) provided financial aid to employed and self-employed Canadians who were directly affected by the pandemic. Eligible individuals could receive $2,000 in a 4-week period.

The Canada Recovery Benefit (CRB) provided income to employed and self-employed individuals who were directly affected by the pandemic and were not collecting Employment Insurance (EI) benefits. Depending on when applicants applied, they could have received up to $1,000 for a two-week period.

Homeowners could receive help through the pandemic with a government-facilitated mortgage deferral program. Eligible homeowners could work with their mortgage lender to pause or defer their payments for a certain time.

All of these COVID-19 government benefits have now ended, but there are examples of other government benefits available to help Canadians in need.

Expanding access to dental care

In the 2022 federal budget, the government pledged to provide $5.3 billion over five years for a new dental coverage care plan. Canadian families with an annual salary under $90,000 and children under age 12 can access this program starting in 2022-23. By 2023, this program will expand to include all children under 18 years as well as seniors and persons living with disabilities. The full implementation will take place in 2025.

Support for early learning and childcare

The 2021 federal budget invested $30 billion over five years to support early learning and child care, including Indigenous Early Learning and Child Care, starting in 2025-26. By the end of 2022, this investment will help reduce most of Canadians child care fees by 50%, on average. By 2025-26, child care should cost families an average of $10 per day at all regulated facilities across the country. With $10 per day child care, it is predicted that families will save an average of between $4,170 (in PEI) to $9,390 per year (in BC) in 2022 compared to 2019.

Student Repayment Assistance Plan (RAP)

For students struggling to repay their student loans, the Government of Canada offers the Repayment Assitance Plan (RAP). Depending on your income, you may qualify for reduced payments or no payments at all. Students can apply for this program as soon as they start to repay their student loans and anytime during the repayment process. As long as you are eligible for this program, the balance of your loan will be paid. However, students are still responsible for making interest payments.

Other Debt Management Options

If you’re struggling with debt, you can’t always rely on government debt relief grants or debt forgiveness programs to help you make ends meet. Instead, consider reaching out to a Licensed Insolvency Trustee (LIT). An LIT can introduce you to several debt management options and help you select the one that is right for you. Other debt management options include:

Debt consolidation

To simplify your debt payments, you can take out one large consolidation loan and use it to pay off several debts. Instead of juggling multiple debts with different payment due dates and various terms, you only have to make one debt payment each month. Consolidating your debt can reduce the amount of interest you pay if you can secure a consolidation loan with a rate lower than your other individual creditors.

Credit counselling

Credit counselling is commonly referred to as a debt management plan (DMP). A DMP can offer services like financial education, budgeting advice, and assistance in creating a debt repayment plan. A credit counselor can also negotiate with your creditors on your behalf to try to pause or lower your interest rate. It’s up to your creditors to determine if they are willing to negotiate.

Debt settlement

Debt settlement is a strategy that can help reduce the total amount of debt you owe. If you take this approach, you can contact your creditors directly to see if they are willing to negotiate a reduction in how much you owe in exchange for a lump sum payment. Alternatively, you can hire a debt settlement company to negotiate on your behalf. Your creditors are not required to deal with you or a debt settlement company, though they might be willing if it means they will get some money versus nothing if you can’t afford to pay.

Consumer Proposal

A Consumer Proposal is a legal proceeding administered by an LIT. Unlike in credit counselling or debt settlement, your creditors are required to engage in the proposal process. Your LIT will work with you to develop a proposal – an offer to your creditors to pay off a certain percentage of what you owe or extend the time you have to pay your debts. If the proposal is accepted, you are responsible for paying the agreed amount. If your proposal is rejected, you can make changes to your proposal and resubmit, or you can consider declaring Bankruptcy.


For most people, Bankruptcy is the last resort for managing debt. While no one wants to file for Bankruptcy, it’s a tool that is meant to provide a fresh financial start for honest Canadians who have found themselves in an unmanageable amount of debt. Once you’ve declared Bankruptcy, you can stop making payments to any unsecured creditors, and wage garnishments and collection calls will stop. If you are discharged from Bankruptcy, you are released from your legal obligation to repay the debts you owe (with some exceptions).

Speak With an LIT Today

If you are concerned with your debt and don’t know where to turn, reach out to a Licensed Insolvency Trustee today. An LIT can present the different debt management options available and help you make an informed choice.

If you are considering filing for Bankruptcy or a Consumer Proposal, an LIT is the only professional who can legally administer these proceedings. You don’t have to struggle alone. Give us a call at 519-310-JOHN (5646) for a free and confidential consultation. Or, reach out online using our online contact form.

John Adamson, Licensed Insolvency Trustee Ontario

John Adamson, CPA, CMA

John is a Licensed Insolvency Trustee (1994), a Chartered Insolvency and Restructuring Professional (CIRP – 1994), and a Chartered Professional Accountant with a Certified Management Accounting designation (CPA, CMA – 1992). His experience includes more than 25 years of helping individuals, small businesses, their owners and even lenders, find solutions to their debt problems.

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