A Canadian grocery benefit replaces the GST
Jean Numa Goudou ·
500 million dollars from the Strategic Response Fund will be allocated to help businesses
Prime Minister Carney announces the implementation of the Canadian Grocery and Essentials Benefit, which will replace the former GST credit starting next July with a 25% increase for a five-year period, in addition to a one-time payment equivalent to a 50% increase this year.
Thus, a family of four will receive up to $1,890 this year, then approximately $1,400 per year over the following four years, while a single person will be able to receive up to $950 this year, then approximately $700 per year thereafter.
In addition, $500 million from the Strategic Response Fund will be allocated to help businesses deal with supply chain disruptions without passing costs on to consumers, along with the creation of a new $150 million Food Security Fund to support small and medium-sized enterprises and community organizations.
The government also plans to provide $20 million to the Local Food Infrastructure Fund to support food banks and community food programs. It also plans to develop a National Food Security Strategy aimed at addressing the root causes of food insecurity, improving access to nutritious food, and strengthening competition and transparency in food supply chains.
"One of Canada's advantages is that a person doesn't have to be born wealthy to succeed. To protect this fundamental value, we are building a stronger economy that benefits everyone by creating thousands of new job opportunities offering better wages," said Prime Minister Carney in a statement.
This announcement follows measures already taken aimed at reducing costs for Canadians and protecting essential programs:
Reducing taxes for 22 million middle-class Canadians by lowering the marginal tax rate on the first personal income bracket from 15% to 14% starting July 1, 2025, resulting in tax savings of up to $420 per year per person and $840 per year for a dual-income family.
Eliminating the Goods and Services Tax (GST) for first-time homebuyers purchasing a property valued at $1 million or less and reducing the GST for first-time homebuyers purchasing a property valued between $1 and $1.5 million, so that more Canadians, particularly young families, can immediately achieve their goal of homeownership.
Canceling the federal carbon tax as of April 1, 2025, which has directly helped Canadians by allowing them to save at the pump. As of the same date, the government has also removed the requirement for provinces and territories to implement consumer carbon pricing. As a result, the price of gasoline has dropped by nearly 18 cents per liter in most provinces and territories compared to 2024-2025, which has helped reduce overall inflation.
Budget 2025 also included concrete measures to ensure Canadians receive the support they deserve, including targeted measures to strengthen food security and improve household cost of living:
Permanent maintenance of the National School Food Program to provide meals in schools so that up to 400,000 children can benefit each year, allowing participating families with two children attending school to save approximately $800 per year on groceries.
Launch of automatic delivery of federal benefits starting with the 2026 tax year, so that up to 5.5 million low-income Canadians automatically receive the benefits they are entitled to by the 2028 tax year, including the Canadian Grocery and Essentials Benefit and the Canada Child Benefit.
Reducing costs and increasing competition in essential services, including implementing ambitious pro-competition measures in the telecommunications and finance sectors to reduce prices, make it easier for Canadians to switch providers, and reduce banking and service fees.