Canada Groceries and Essentials Benefit

On January 26, 2026, the government announced that it will increase benefits under the Goods and Services Tax (GST) credit and rename the program. Bill C-19 was tabled in the House of Commons on January 28, 2026, and it proposes to provide a one‑time payment to individuals equal to 50 per cent of the GST credit’s annual 2025-26 value and to raise the annual credit by 25 per cent for five years starting in July 2026. [^1]

The PBO estimates that this measure will cost $12.4 billion over 2025-26 to 2030-31.

• Estimates are presented on an accrual basis as would appear in the budget and public accounts.
• A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).
• Totals may not add due to rounding

PBO adjusted the parameters of the Social Policy Simulation Database and Model (SPSD/M) to match the income tax and transfer system for calendar year 2025.[^2] The income tax and transfer system was indexed to inflation for calendar years 2026 to 2029 using the CPI projection from the PBO’s September 2025 Economic and Fiscal Outlook.

For calendar years 2025 to 2029, the PBO compared a scenario where the GST credit was adjusted to match the Canada Groceries and Essentials Benefit to a baseline scenario where the GST credit remained unchanged. The cost for calendar year 2030 was projected using the average growth rate in the GST credit over calendar years 2026 to 2029.

The results of the SPSD/M simulations were rescaled using Finance Canada’s 2025 Report on Federal Tax Expenditures. The cost of the measure was accrued in July of each calendar year and matched to the corresponding fiscal year.

The main source of uncertainty relates to the GST credit projections from the Report on Federal Tax Expenditures (2025) used to rescale the SPSD/M estimates. There is also uncertainty in the projected CPI used to index the tax and transfer system in future years. The PBO does not expect a significant behavioural impact. This costing note does not include the additional cost of Automatic Federal Benefits for Lower-Income Individuals as proposed in Budget 2025.