Carney unveils 25% GST credit boost and one-time top-up to ease grocery costs
Ottawa will increase the GST credit by 25% for five years, add a one-time top-up this summer and rename the benefit to help up to 12 million Canadians.
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By Torontoer Staff
Prime Minister Mark Carney announced a multibillion-dollar package to ease grocery and essentials costs, including a 25 per cent increase to the GST credit for five years and a one-time top-up this summer. The government will also rename the program the Canada Groceries and Essentials Benefit.
The changes are designed to help low- and moderate-income households hit hardest by higher food prices, and the federal government says the boost could reach as many as 12 million Canadians.
How the new benefit works
The core change is a 25 per cent increase to the GST credit, maintained for five years, plus a one-time top-up payment. Ottawa says the measures will be implemented starting in July and will be routed through the existing tax credit system to reach eligible families.
- Reach: up to 12 million Canadians, according to federal figures
- Family of four: up to $1,890 this year, then about $1,400 annually for the following four years
- Single person: up to $950 this year, then about $700 annually for the following four years
- First-year cost: roughly $3 billion; subsequent years: upward of $1 billion annually
The government stressed that higher grocery prices place a disproportionate strain on lower-income households, and that a larger GST credit will reduce the regressive impact of sales tax on basic essentials.
We know that, in times like these, we have to look out for ourselves, and we have to take care of each other. That starts with everyone being able to put good food on the table.
Prime Minister Mark Carney
Additional supports for food supply and local programs
Beyond the tax credit, Ottawa is reallocating $500 million from the existing Strategic Response Fund to help businesses manage supply-chain disruptions without passing costs to consumers. The federal government will also add $20 million to the Local Food Infrastructure Fund to support community organisations that supply food directly to families.
Officials say the combination of direct payments and targeted funding is intended to provide both immediate household relief and support for the food distribution network that serves vulnerable communities.
Reactions from parties and community groups
Opposition parties and food charities welcomed the move, while some urged faster action or broader policy changes to bring down food prices. The Conservatives said they will back the measures but repeated calls for policy shifts they argue would lower food costs further.
Canadians deserve immediate solutions that lower food inflation and make good, nutritious meals affordable once again.
Conservative MPs Sandra Cobena and Vincent Ho
The New Democrats said they will work to speed delivery of funds. Interim leader Don Davies called for urgent action to get the money flowing sooner than the announced timelines.
While any measures that offer relief are welcome, Canadians need action now, not promises that won't begin for months. New Democrats will work co-operatively with the government to get this money flowing faster to Canadians.
Don Davies, interim leader of the New Democratic Party
Food Banks Canada and local food charities framed the move as a step toward reducing food insecurity. The national group noted food bank usage rose 5.2 per cent in 2025 compared with 2024, and said a groceries and essentials benefit has been a long-standing recommendation.
We cannot build a stronger economy while one in four people in Canada experiences food insecurity.
Food Banks Canada
Neil Heatherington, CEO of the Daily Bread Food Bank in Toronto, said the increase to the tax credit will make a meaningful difference for some households, potentially lowering demand on food banks.
It’s going to make the difference between whether or not somebody needs to make use of a food bank or not.
Neil Heatherington, CEO, Daily Bread Food Bank
What happens next
The measures require approval from the House of Commons. The Liberals govern with a minority, so passage depends on support from other parties. If adopted, the government plans to deliver the one-time top-up this summer and implement the 25 per cent boost through the revamped credit in July.
Officials say the initial fiscal impact will be concentrated in the first year, with lower ongoing costs thereafter. Advocacy groups will be watching rollout details closely to ensure payments reach eligible households quickly and without administrative barriers.
Editor’s note: An earlier version of this story misstated the timing of the annual increase. The GST credit is increasing by 25 per cent for five years, not by 25 per cent each year.
The federal package mixes immediate household relief with targeted support for supply chains and local food programs. Lawmakers and community groups will now focus on speeding delivery and monitoring whether the measures reduce pressure on household budgets and food charities.
GST creditcost of livingfood inflationMark Carneyfood banks
