New Affordability Plan Includes GST Credit Increase, Carney Says
Prime Minister Mark Carney unveiled a multibillion-dollar boost to the GST credit Monday as part of a package of measures aimed at easing the affordability crunch facing families.
The government will provide those eligible for the credit with a one-time, top-up payment and will also increase the credit by 25 per cent. This boost will remain in effect for five years, Mr. Carney said.
The GST credit is paid to low- or moderate-income families to offset the costs of paying the tax.
“We know that, in times like these, we have to look out for ourselves, and we have to take care of each other,” Mr. Carney said. “That starts with everyone being able to put good food on the table.”
The government said the GST credit – which is being renamed the Canada Groceries and Essentials Benefit – will help as many as 12 million Canadians.
The changes will be implemented in July. According to figures provided by the government, the increase means a family of four could receive up to $1,890 this year, and about $1,400 a year for the next four years. A single person would receive up to $950 this year, and about $700 a year for the next four years.
Mr. Carney told reporters the cost of the increased benefit will be around $3-billion in the first year and upward of $1-billion annually for the subsequent years.
He said the decision to increase the credit reflects the fact that the cost of groceries and other items eat up a larger share of the budget for lower-income Canadians, placing a higher tax burden on them.
“The rise in food prices means that a lot of those Canadians need more support right now.”
He has been under sustained pressure from opposition parties to address the rising costs of food. The new package was announced on the day Parliament resumed sitting after its winter break.
The tax measures need to be approved by the House of Commons. The Liberals have a minority government, so they need the support of MPs from other parties for the measures to pass.
The Opposition Conservatives said Monday they will support the measures but called on the government to do more to reduce food costs.
Conservatives reiterated their long-standing demands for the government to remove the industrial price on carbon, repeal regulations on food packaging and cancel the clean fuel standard, all of which, they say, add to food prices.
“Canadians deserve immediate solutions that lower food inflation and make good, nutritious meals affordable once again,” Conservative MPs Sandra Cobena and Vincent Ho said in a statement.
The New Democrats said they want to work to make sure the funds reach Canadians quickly.
“While any measures that offer relief are welcome, Canadians need action now, not promises that won’t begin for months,” interim party leader Don Davies said in a statement.
“New Democrats will work co-operatively with the government to get this money flowing faster to Canadians.”
Earlier this month, Statistics Canada reported that prices for groceries increased at a faster pace in 2025 than the year before.
In addition to boosting the GST credit, Ottawa is also setting aside $500-million from the existing Strategic Response Fund to help businesses manage supply chain disruptions without having to pass along costs to Canadians.
A separate initiative will add $20-million to the Local Food Infrastructure Fund to support organizations that directly provide food to families.
Food Banks Canada says the usage of food banks rose by 5.2 per cent in 2025 compared to 2024.
The association group has long called for a groceries and essentials benefit, which chief executive Kirstin Beardsley spoke about at a government cabinet meeting last week.
The organization welcomed Monday’s announcement.
“We cannot build a stronger economy while one in four people in Canada experiences food insecurity,” it said in a statement.
Neil Heatherington, CEO of the Daily Bread Food Bank in Toronto, said the increase to the tax credit is significant.
“It’s going to make the difference between whether or not somebody needs to make use of a food bank or not,” he said in an interview.
This article was first reported by The Globe and Mail
