Canada is boosting GST credit payments — Here's how much more you'll get
Eligible Canadians are about to get a boost in their GST credit payments over the next five years.
On Monday, Prime Minister Mark Carney announced the “Canada Groceries and Essentials Benefit,” which aims to offset soaring food prices for low-income Canadians.
“This will deliver hundreds of dollars more into the bank accounts of more than 12 million Canadians,” stated Carney at a news conference in Ottawa.
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So, how will this work? According to Carney, the federal government is taking the existing GST credit amount and raising it by 25 per cent for five years.
In addition, Ottawa will also be providing a one-time payment equivalent to 50 per cent of the GST credit this year.
How much more could you get from the GST credit boost?
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Currently, a family of four receive about $1,100 a year with the existing credit. According to the prime minister, the same family will receive up to $1,890 this year and about $1,400 a year for each of the next four years.
A single person currently receives $533 a year with the existing credit. The new benefit will increase that to $950 this year and about $700 a year for the next four years.
“On average, these payments make up for the higher level of food prices since the pandemic,” said Carney.
The federal government is spending $3.1 billion on the GST credit boost in the first year, $1.3 billion in the second year, and about $1.8 billion for the last three years, bringing the overall cost to $6.2 billion over five years.
Carney said that in parallel to the “Canada Groceries and Essentials Benefit,” Ottawa is also working to address the “root causes of inflation” and is working on longer-term solutions to lower the cost of groceries.
“That starts by improving the resilience of our supply chains, because when issues arise in supply chains, from transportation to process to distribution, costs rise at every step along the way, and these costs end up on grocery bills,” he said.
The federal government also announced that it’s committing $500 million to help food businesses expand capacity, increase productivity and strengthen Canada’s future food supply.
Carney added that Ottawa’s regional tariff response initiative will provide $150 million for small and medium-sized businesses.
“This will mean more resilient supply chains, more greenhouses, more abattoirs that are closer to customers, most importantly, will help mean lower food prices and better food security for Canadians,” he said.
This isn’t the first time the GST credit has been increased by the federal government.
In 2022, Ottawa doubled the GST credit for six months during the height of inflation.