How the temporary GST boost will affect your wallet and when to expect it
The PBO says Ottawa’s temporary GST credit increase and one-time payment will cost $12.4 billion over six years. Here’s who benefits, the timeline, and what to do to get your payments.
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By Torontoer Staff
The Office of the Parliamentary Budget Officer estimates the federal plan to raise the GST credit temporarily and deliver a one-time payment will cost $12.4 billion over six years. That figure is slightly higher than the government’s own projection.
The measures, announced last week by Prime Minister Mark Carney, are aimed at helping lower-income Canadians with rising food costs. They include a 25 per cent increase to the GST credit phased in over five years starting in July 2026, plus a one-time payment this spring equal to 50 per cent of the credit.
What the government is proposing
The GST credit is a quarterly, tax-free payment for families with low and modest incomes. The government’s package raises that credit by 25 per cent over five years, with increases beginning in July 2026. In addition, eligible recipients will receive a one-time payment this spring worth 50 per cent of the credit.
More than 12 million Canadians are expected to be eligible for the expanded benefit.
Projected costs and how they differ
The PBO pegs the total cost of the measures at $12.4 billion over six years. It estimates the one-time payment will cost just over $3.1 billion in the current fiscal year. The phased annual increases are expected to cost between $1.7 billion and $1.9 billion each year through 2031, adding roughly $9.2 billion.
The government’s own estimate for the full package remains $11.7 billion over six years. That number reflects a lower estimate for the cost of the annual increases, which the government places at $8.6 billion.
While we cannot speak to the methodology adopted by the PBO or the assumptions used to support their calculations, we maintain that the total program package will cost $11.7 billion over six years.
John Fragos, spokesman for Finance Minister François-Philippe Champagne
Where the plan stands in Parliament
The package won cautious backing from federal Conservatives, even as their leader framed it as a short-term fix. Conservative Leader Pierre Poilievre described it as a 'Band-Aid solution.'
Conservative MP Melissa Lantsman moved to fast-track the enabling legislation through the House of Commons, and that motion passed without opposition. The government expects the bill to complete the remaining House stages by Wednesday, after which it must be debated and voted on in the Senate.
What this means for households
If you already receive the GST credit, you should see a one-time top-up this spring followed by gradual quarterly increases beginning in July 2026. The boost is targeted at households with low and modest incomes, and will be applied automatically for most recipients.
If you are unsure whether you qualify, make sure your tax filings are up to date. The Canada Revenue Agency determines eligibility based on income reported on your tax return. Setting up or confirming direct deposit through CRA My Account will speed receipt of payments.
- File your taxes on time so the CRA has current income information.
- Sign in to CRA My Account to confirm banking and contact details.
- Watch for official CRA notices explaining payment timing and amounts.
How to plan for the change
Treat the one-time payment as temporary income. Use it to cover immediate necessities, build an emergency buffer, or reduce high-interest debt. Expect the phased 25 per cent increase to arrive incrementally over several years rather than as a single boost.
If your household budget is tight, update your monthly plan now so you can allocate the extra funds where they will have the most impact. Community agencies and provincial supports may offer complementary programs for food security and household essentials.
The bottom line
The federal GST credit changes are designed to give immediate relief to millions of lower-income Canadians through a one-time payment and to increase ongoing support over five years. The budget office’s higher cost estimate highlights an outstanding debate over exact fiscal impacts, but the practical effect for eligible households will be extra quarterly payments and a spring top-up if the legislation proceeds on schedule.
GST creditpersonal financecost of livingfederal policytax credits
