It’s remarkable which stories capture the nation’s attention, and which ones don’t.
Government promises to spend billions — if not tens of billions — on major initiatives such as defence, infrastructure or Indigenous settlements often receive passing media attention. But scandals over relatively small sums can come to be imprinted on the national consciousness.
Bev Oda’s $16 orange juice, anyone?
Which brings us to the government’s latest multi-billion dollar commitment. On Monday, members of Parliament voted unanimously to fast-track legislation that will boost the GST credit over the next six years.
The measure will cost $12.4 billion, the Parliamentary Budget Officer has estimated, and could help more than 12 million Canadians.
There is much to applaud about the credit, particularly as compared to some recent precedents.
The measure is, for one, targeted.
Unlike the partial HST/GST holiday that a desperate Trudeau government unveiled in its twilight days, this credit is only offered to low and moderate income individuals. In 2024, the credit was available to individuals making less than about $56,000 and families of four making less than about $67,000. The credit scales down as income increases.
And the relief it offers is meaningful. This spring, the GST credit will be increased one time by 50 per cent. In the five subsequent fiscal years, starting this July, the credit will be boosted by 25 per cent on the base credit.
In dollar terms, that means an eligible family of four could receive up to $1,890 in 2026, while an eligible individual could receive up to $950.
In further contrast to the HST/GST holiday, this credit is easy to administer. Many businesses told Canadian Affairs that the tax holiday was a “nightmare” to administer; for some, it actually cost them more than it generated in additional sales.
By contrast, the extra GST credit can be paid out quickly and easily through the existing GST rebate process. And it does not require a new bureaucracy — or businesses — to administer it.
The government was also shrewd in how it chose to brand the program. Formally billed as the “Canada Groceries and Essentials Benefit,” the measure responds to Canadians’ concerns over the high cost of living. Polling has long shown this is a top concern Canadians want Ottawa to address.
Contrast this branding with the Trudeau Liberals’ ill-fated “Climate Action Incentive Payment,” the rebate for the consumer carbon tax. Few people knew what the incentive meant, or that they were receiving it. This contributed to public confusion over the measure’s full impact and undermined support for it.
So Prime Minister Mark Carney has clearly learned a thing or two about what not to do from his predecessor. Unfortunately, he appears to have adopted some of the Trudeau government’s bad habits as well.
Chiefly, this GST credit represents yet another major spending commitment, with nary a word about how Ottawa plans to fund it. Certainly, the government has said nothing about raising taxes.
But pay for it someone must. If there won’t be any additional revenue from taxes or other sources, the implication is that this $12.4 billion will be added to Canada’s already enormous deficit. For those who have forgotten, this year’s deficit clocked in at over $78 billion, a record outside of pandemic years. Effectively, we are saddling our children with debt tomorrow to pay for food today.
Not only is this unfair to future generations, it can be counterproductive for current ones. Deficits can be inflationary, especially when the money fuels short-term consumption, as is the case here. This means the credit would actually put upward pressure on costs.
If so, the GST credit will not provide long-term relief to Canadians, and may actually make things harder for them.
In short, it is good and perhaps necessary to shore up the Canadians struggling to get by today. But it will take more than political gimmicks to put low-income Canadians on sounder footing in the long term.
To do that, the government will have to get serious about driving down Canadians’ most costly and essential good — housing — and addressing the productivity crisis that has seen lower and middle-income Canadians’ incomes stagnate for decades.
To date, it seems like the Carney government has been playing for time. The GST credit continues with that theme.
We are looking forward to the day when the government takes serious actions to move the needle on the big challenges facing Canadians.
The biggest problem with this is that when the expiry approaches, there will be such an outcry, that the government of the day will be loathe to let it expire…. and we will be stuck with this forever. Just add one more thing that future generations will have to pay for .
“In dollar terms, that means an eligible family of four could receive up to $1,890 in 2026, while an eligible individual could receive up to $950.”
I’m a low income, single individual. My taxable yearly income is less than $20,000. Right now I only receive $400 per year for the GST credit. There’s no way that a low income Canadian getting what I get could ever hope to receive $950 per year with this so-called increase.
According to the new Carney math, I’d get a lousy $50 up front (less than half a week’s groceries), then an additional $50 ($25 x2) in July and October. So whoop de doo, a whole $150 extra in 2026, for a total of $550 including what I’m getting now. Starting in July 2027 my credit will go up by a few pennies as it does every year, so I’ll still only get $125 per quarter, $500 plus the pennies for the year. That’s a far cry from their claim of $950 for a single person.
So much for “meaningful”, it’s more like tossing a handful of peanuts to the peasantry a few times a year so they can afford to eat cake.
I don’t know who will be getting $950, but I looked to see who’s eligible, and I do know that a lot of people who only live here for “tax purposes”, along with those who only have a relative here, will be getting more than I’ll be getting.
With all the complaints about the amount of money this boondoggle will cost, maybe it’s time to take a harder look at exactly who’s getting this money. If you don’t live in Canada, you don’t buy groceries here, and you don’t deserve to cash in on a so-called “Canada Groceries and Essentials” credit.
All I know is that as a low income Canadian resident, that extra $150 paid out in handfuls of pocket change over a year won’t provide much of a “benefit” for me.
Originally, GST was only supposed to be on luxury items. So feel government thinks it’s a luxury to eat. As well as heat and power your home. This whole tax thing is out of control! Needless to say, the monies it collects and redistributes. A poor case of Robinhood is what it is.
G.S.T., Should be cancelled on any food item, cookies, chocolate bars, chips and other itmes ,like pop, juice. If not then just drop G.S.T.as it is a way for this government to collect revenue set up in A system that a former Conservative said it was good for you. This G.S.T. should just die and increase funding especially for middle income folk and really seniors who get a lttle bit every year. GST is a joke it is not needed and every government says we will help you it is not true. Carney a former Banker should remove it and feel proud he did what former Liberals said they would do ,from Chretian, and Trudeau said.
It is time to put a Conservative joke to bed.
Nice article by The Editorial Board. The explanation of how the GST credit impacts Canadians today, while raising concerns for the future, is very clear. For anyone looking to understand GST calculations in practice, businesses and individuals can use our smart GST calculator.