The federal government has announced a new package of tax and support measures aimed at helping Canadians manage the cost of groceries and other essential items, while also providing targeted assistance to businesses facing supply chain pressures and trade uncertainty. At the centre of this announcement is the Canada Groceries and Essentials Benefit, a redesigned and enhanced version of the existing Goods and Services Tax (GST) Credit. The proposed changes would increase benefit amounts, maintain quarterly payments and index support to inflation.
Under the proposal, the GST Credit would be relaunched as the Canada Groceries and Essentials Benefit. While the eligibility framework remains the same, the program would be enhanced in two key ways:
- A one-time top-up payment for eligible recipients
- A five-year increase to quarterly benefit amounts, beginning in July 2026
The government estimates that the benefit enhancements will deliver $8.6 billion in total support by 2031, in addition to existing income-tested programs such as the Canada Child Benefit, the Canada Disability Benefit and the Guaranteed Income Supplement.
Eligible recipients would receive a one-time top-up payment equivalent to 50 per cent of the annual 2025–26 GST Credit amount. The government expects this payment to be issued in spring 2026, and no later than June 2026, subject to the timing of Royal Assent.
This top-up is intended to provide near-term assistance to households already receiving the GST Credit. The government estimates the top-up alone would provide approximately $3.1 billion in additional support to qualifying recipients.
Starting in July 2026, the Canada Groceries and Essentials Benefit would increase by 25 per cent. This enhancement would apply to all eligible recipients for a period of five years and would remain indexed to inflation, ensuring benefit amounts adjust annually with changes in the cost of living. Payments would continue to be issued quarterly—typically in July, October, January and April—consistent with the current GST Credit structure.
Based on government projections, benefit increases would vary depending on household size and income. Examples provided by the Department of Finance include:
- A couple with two children and $40,000 in net income would receive:
- A one-time top-up of $533
- An additional $272 in increased benefits for the 2026–27 benefit year
- Total increase: $805
- Total benefit for 2026–27 (including top-up): $1,890
- A single senior with $25,000 in net income would receive:
- A one-time top-up of $267
- An additional $136 in increased benefits for the 2026–27 benefit year
- Total increase: $402
- Total benefit for 2026–27 (including top-up): $950
Actual benefit amounts will depend on individual income levels and household composition. No separate benefit application will be required. Eligible recipients will automatically receive the enhanced benefit, provided their income tax returns are filed and up to date. The filing of a 2024 tax return will be required to receive the one-time top-up, while a 2025 tax return will need to be filed to receive the increased quarterly payments starting in July 2026. The government estimates that approximately 12.6 million individuals and families would benefit from the proposed changes.
Additional measures to support businesses
In addition to the benefit enhancements, the federal government announced several business-focused tax and support measures, including:
- $500 million from the existing Strategic Response Fund to support businesses navigating supply chain disruptions
- A $150 million Food Security Fund under the Regional Tariff Response Initiative, focused on small to medium-sized businesses
- Immediate expensing for greenhouse buildings, allowing food producers to deduct the full cost of eligible greenhouse assets acquired on or after November 4, 2025, and available for use before 2030
- $20 million for the Local Food Infrastructure Fund, supporting food banks and community food organizations
- Development of a National Food Security Strategy
- Measures to introduce unit price labelling, aimed at improving price transparency and competition in food supply chains
The proposed measures are subject to Royal Assent. Further technical details will be available once the implementing legislation is introduced in Parliament. As with all income-tested benefits, keeping personal tax filings current will be essential to ensure eligibility and timely receipt of payments.
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