Ottawa announces revised GST credit, new support measures for SMEs
On the heels of his widely covered speech at the World Economic Forum in Davos last week, it appears that Prime Minister Mark Carney has been paying attention to poll numbers showing his Liberal party trailing the opposition Conservatives on the cost-of-living file. That would explain his government’s move yesterday to propose a new package of tax and support measures to help Canadians struggling to afford groceries and other staple items, while providing additional aid to businesses coping with the impact of U.S. tariffs and trade uncertainty.
In essence, the proposed package is a rebranding of the federal Goods and Services (GST) Credit—which will now be known as the quarterly, inflation-indexed Canada Groceries and Essentials Benefit—that includes a 25 per cent enhancement to the new/old program over five years beginning in July 2026, for a total of $8.6 billion in support by 2031. This increase would be in addition to existing programs such as the Canada Child Benefit, the Canada Disability Benefit and the Guaranteed Income Supplement.
The benefit also provides a one-time top-up payment for qualifying recipients, likely in spring but no later than June 2026, equivalent to a 50 per cent increase in the annual 2025-26 value of the GST Credit. The government says this would provide $3.1 billion in near-term assistance to current GST Credit recipients. According to the government’s projections, a couple with two children and $40,000 in net income “… would receive a one-time top-up of $533 plus an increase of $272 for the 2026-27 benefit year (total increase of $805). In total, they would receive $1,890 for the 2026-27 benefit year (including the top-up).” A single senior with a net income of $25,000 “… would receive a one-time top-up of $267 plus a longer-term increase of $136 for the 2026-27 benefit year (total increase of $402). In total, they would receive $950 for the 2026-27 benefit year (including the top-up).”
The Carney government is promising legislation to implement the proposed top-up and enhancement of the Canada Groceries and Essentials Benefit in the coming weeks. Eligible recipients will not be required to apply for the increased payments.
Ottawa also announced:
- Plans to earmark $500 million from the Strategic Response Fund to help businesses navigate ongoing supply chain disruptions
- The creation of a $150 million Food Security Fund under the Regional Tariff Response Initiative to support small and medium-sized businesses
- Tax changes that would allow the immediate expensing of greenhouse buildings, enabling food producers to immediately claim the cost of greenhouses acquired on or after November 4, 2025, and that become available for use before 2030
- $20 million for the Local Food Infrastructure Fund to support local food banks
- The development of a National Food Security Strategy to address the root causes of food insecurity
- Measures to implement unit price labelling to boost market competition, particularly in food supply chains
The package of affordability measures remains subject to royal assent. Further details will become available when the accompanying legislation is tabled. The Conservatives recently indicated a willingness to work with the minority Liberal government to address cost of living concerns, thereby increasing the odds that the implementing legislation will be passed at some point during the current session of Parliament.
Armando Iannuzzi, Co-Managing Partner
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