Ottawa’s plan to boost GST credits and deliver a one-time payment to millions of Canadians will cost more than $12 billion over the next six years, according to a new report from the Parliamentary Budget Officer (PBO).
In an analysis released on Feb. 2, the PBO estimates the federal government’s newly announced Canada Groceries and Essentials Benefit will cost approximately $12.4 billion between the 2025–26 and 2030–31 fiscal years. The initiative was unveiled last month by Prime Minister Mark Carney as part of a broader effort to help low- and moderate-income Canadians cope with rising grocery prices.
The benefit builds on the existing Goods and Services Tax (GST) credit, a tax-free quarterly payment aimed at offsetting sales taxes on essential goods. Under the new plan, eligible recipients will receive: A one-time payment worth 50 per cent of their GST credit this spring, expected to be issued no later than June. A 25 per cent increase in the GST credit paid quarterly for five years, beginning in the 2026–27 fiscal year.
The government estimates that around 12 million Canadians will qualify for the payments.
According to the PBO’s projections, the one-time payment alone will exceed $3 billion this year. The enhanced quarterly credits are expected to cost between $1.8 billion and $1.9 billion annually through 2030–31.
Carney has said the expanded credits are designed to ease the pressure of sales taxes on groceries and household essentials for families struggling with higher living costs.
“On average, these payments make up for the higher level of food prices since the pandemic,” Carney said when announcing the measure, adding that recipients are free to use the money as they see fit.
Under the new program, an average family of four currently receiving about $1,100 per year through the GST credit is expected to receive roughly $1,890 this year, followed by about $1,400 annually for the next four years. Eligible single individuals would see their support rise from an average of $540 to about $950 this year, and $700 per year thereafter.
While Conservative MPs have said they will support the measure, party leaders have been critical of its overall impact. Conservative finance critic Jasraj Singh Hallan described the benefit as a “band-aid solution,” arguing it does little to address the root causes of rising food prices.
Deputy Conservative Leader Melissa Lantsman pointed to data showing that Canada’s food inflation is currently the highest among G7 countries.
“Food inflation is now twice as high as it is in the United States, and it has doubled since the Prime Minister took office,” she said at a Feb. 2 press conference.
Lantsman cited estimates suggesting the rebate amounts to roughly $10 extra per week for eligible households, compared with average weekly grocery bills of more than $300. “Sure, you’ll take $10,” she said, “but it doesn’t solve the actual problem.”
According to Canada’s Food Price Report from Dalhousie University’s Agri-Food Analytics Lab, the average family of four is expected to spend over $17,500 on groceries in 2026, underscoring ongoing affordability concerns.
Carney has acknowledged that rebates alone are not a long-term solution, saying the government is also working on policies to address the underlying drivers of inflation and reduce grocery costs over time.
Some of those measures were outlined in Budget 2025, tabled last November, which projected a $78.3 billion deficit for 2025 and $141.4 billion in new spending over five years. While the grocery benefit itself was not included in the budget, it builds on related initiatives such as the $5 billion Strategic Response Fund, with portions allocated to help businesses manage supply chain disruptions and tariff-related costs.
Conservatives argue that cutting taxes would be a more effective way to reduce food costs than issuing rebates. Lantsman said her party plans to introduce a motion in Parliament calling for measures such as reducing the industrial carbon tax and easing federal packaging regulations, costs she says are ultimately passed on to consumers.
The Canada Groceries and Essentials Benefit follows earlier interventions, including a one-time GST rebate issued in 2023 and a temporary GST/HST holiday on select items during the 2024 holiday season.
As Parliament debates the proposal, the question remains whether short-term financial relief can meaningfully offset grocery inflation or whether deeper structural changes are needed to bring food prices down.
