The federal and Manitoba governments have taken different approaches to ease rising grocery costs: Ottawa announced an enhanced GST/HST credit and a one-time rebate, plus funding for supply-chain projects, while Manitoba has frozen the retail price of one-litre milk for the year.
Food inflation exceeded five per cent in December 2025, well above the overall inflation rate, and governments are offering immediate relief as they pursue longer-term measures to stabilise prices.
How Ottawa's rebate and investments work
Prime Minister Mark Carney announced the Canada Groceries and Essentials Benefit, which increases the existing GST/HST credit for qualifying recipients by 25 per cent and adds a one-time payment equal to 50 per cent of this year’s credit. The enhanced credit is set to run for five years.
The federal plan also includes a $500-million commitment to strengthen food network and supply-chain resilience, and an additional $150 million for the Tariff Response Initiative. Ottawa said some funds will support faster greenhouse construction to reduce seasonal price swings in vegetables.
These payments make up for the higher level of food prices since the pandemic. In parallel, we’re working to address the root causes of inflation and working on longer-term solutions to bring down the cost of groceries in Canada, that starts by improving the resilience of our supply chains, because when issues arise and supply chains from transportation to process to distribution costs rise at every step along the way, these costs end up on the grocery bills.
Prime Minister Mark Carney
Manitoba freezes milk prices
Manitoba’s government announced a maximum retail price for a litre of milk for 2026, a step Premier Wab Kinew described as direct relief for shoppers. The province is one of the few that can regulate retail milk prices, so the measure is not easily replicated elsewhere.
We are squeezing the profit margins to save you money. Rather than try to squeeze the dairy producer or the consumer, we’re saying that these grocery chains can help us out a bit during this cost-of-living crisis.
Premier Wab Kinew
Why prices keep rising
Retail grocery prices reflect a chain of costs: production, transportation, processing and distribution. Disruptions at any link raise costs that can reach the consumer. Weather events, labour shortages, higher fuel and input costs, and global shocks can reduce supply or increase costs, pushing prices up.
Tariffs have been reduced for many food imports, but other policy and market factors still affect final prices. Investments in greenhouses and other domestic capacity can smooth seasonal shortages, but they take time to change supply dynamics.
Direct payments is really the only thing that the federal government can do to control prices, given what’s driving prices up.
Mike von Massow, food economist, University of Guelph
What experts say about rebates and price controls
Economists and finance experts generally see targeted payments as more effective for immediate relief. Clay Jarvis of NerdWallet Canada called the enhanced GST/HST credit a considerate move for lower-income families, but warned that modest payments spread over a year may not stabilise struggling households.
This new measure, an enhanced GST/HST credit that’s set to run for the next five years, should provide some relief for lower-income families. It’s a considerate move on the part of the federal government, but a few hundred dollars spread out over the course of a year won’t be enough to stabilize struggling households.
Clay Jarvis, NerdWallet Canada
Price controls, including targeted freezes, can deliver short-term relief but carry risks. If producers or retailers cannot cover costs under fixed prices, supply can dry up and shelves can empty. Critics point to the 1975 nationwide price and wage controls as an example of contentious and disruptive policy.
Price controls could work in the short term, they could give people some relief, like for a month or two months, but they’re not going to address the structural problems we have that lie behind inflation.
David Soberman, marketing professor, Rotman School of Management, University of Toronto
What this means for shoppers
- Low-income households should see the most immediate benefit from the enhanced GST/HST credit and one-time payment.
- Manitoba consumers will pay a capped price for 1L milk through 2026, but not everyone drinks milk, so the impact varies.
- Supply-chain investments aim to stabilise prices over time, but they will not lower costs immediately.
- Experts warn price freezes can cause supply issues if producers or retailers cannot operate profitably.
Dalhousie University’s Food Price Report projected an average household of four could spend roughly $1,000 more on groceries in 2026, underscoring the scale of the affordability challenge.
Bottom line
Rebates and targeted credits provide quicker, flexible relief for households, while price freezes can lower costs for specific items in the short term. Both approaches have limits. For most shoppers, the immediate effect will be modest relief, and broader price stability depends on longer-term fixes to supply chains and production capacity.
