New federal grocery rebate will cost $12.4 billion, PBO estimates
Posted on: Feb 02, 2026 21:15 IST | Posted by: Cbc
We don't demand to evidence you that food is expensive.
Canadians have been dealing with sticker shock for years as grocery prices have shot up by more than 30 per cent since 2020, according to the most recent data from Statistics Canada.
Last week, Prime Minister Mark Carney announced a suite of affordability measures to help Canadian families who are struggling to cope with the rising cost of living. The flagship measure is the Canada Groceries and Essentials Benefit.
We now know what that will cost. On Monday, the parliamentary budget officer announced that the federal government's plan to increase the GST credit and offer a one-time payment to Canadians will cost Ottawa an estimated $12.4 billion over five years.
The PBO report estimates the one-time payment will cost more than $3 billion this year, while the annual increases will cost between $1.7 billion and $1.9 billion annually through to 2031.
In its first year, the benefit will give low- and modest-income Canadians eligible for the GST rebate a one-time boost that raises the $1,100 a family of four receives annually to $1,890 and increases the $540 an individual gets to $950.
How will the federal GST grocery rebate work?
Starting in 2026/27, and running for the next five years, the GST rebate will be increased by 25 per cent, which means a family of four will get up to $1,400 annually, while an individual will get about $700 a year.
The existing GST credit is paid out quarterly and is targeted at families with low and modest incomes. More than 12 million Canadians are expected to be eligible for the new benefit.
"The rise in food prices means that a lot of those Canadians need more support right now," Carney said last week.
Conservative Leader Pierre Poilievre has said his MPs will support the measure, despite calling it a "Band-Aid solution."
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