Carney pitches GST rebate boost as major plank of Liberal affordability agenda

OTTAWA — Prime Minister Mark Carney kicked off the winter session of Parliament on Monday by unveiling a new plank in the Liberals’ affordability agenda.

Making the announcement from an Ottawa grocery store, the prime minister unveiled plans for the “Canada Groceries and Essentials Benefit” — a 25 per cent hike to the GST credit over the next five years to help lower-income consumers deal with the high cost of groceries.

If the measure is passed, the federal government says it will also issue a one-time payment in the spring worth 50 per cent of the credit.

“Canada’s new government is acting today to provide a boost to those Canadian families who most need one, while creating a bridge to longer-term food security and affordability,” Carney said.

The government said a qualifying family of four will receive up to $1,890 this year and roughly $1,400 annually for the next four years. A single person would get up to $950 this year and about $700 for the next four years.

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.

Monday also marked the return of MPs to the House of Commons after a winter break.

Making the announcement from behind a podium with a campaign-style “lower costs” placard, Carney told reporters he was not angling for a snap spring election.

“We’re not. We’re focused on results for Canadians. We’re working through Parliament to get results for Canadians,” he said.

Conservatives weighing in on the proposal Monday called the GST boost a “Band-Aid solution” and accused the Liberals of drawing from former prime minister Justin Trudeau’s affordability playbook.

In 2022, Trudeau doubled the GST credit for six months in a move he said at the time was aimed at helping Canadians afford essentials like groceries.

Opposition Leader Pierre Poilievre said Monday the latest Liberal proposal falls short of the Conservatives’ laundry list of suggestions to tame food inflation, but he indicated the party’s MPs will support the new benefit anyways.

“Now, the prime minister has revived a Trudeau-era rebate, which we’ll let pass, that will barely cover a few trips to the grocery store,” Poilievre said during the first question period of the year in the House of Commons.

In a letter to Carney published over the weekend, Poilievre said his party would help to fast-track Liberal policies that align with the Conservative agenda, such as making groceries more affordable.

Carney said Monday the cost of essentials has been “too high for too long” and many Canadians are feeling daily financial pressure.

Carney attributed the high prices to the after-effects of the pandemic on the economy, supply chain shocks caused by U.S. President Donald Trump’s global trade war and other factors, such as climate change.

Statistics Canada said food inflation rose to 6.2 per cent in December, outpacing the overall rate of inflation at 2.4 per cent.

Part of the reason for that increase is Ottawa’s tax holiday, which temporarily waived the federal sales tax on a range of essential goods, skewing annual comparisons in the inflation index.

Poilievre has accused Carney of driving food inflation in Canada to the highest level in the G7. On Monday, he repeated calls to eliminate the industrial carbon price and other regulatory fees in the food supply chain.

Carney said the GST boost would help to make up for the higher cost of groceries since the pandemic, particularly for lower-income Canadians who spend a larger share of their paycheques on essentials.

“The GST credit has helped to make our tax system fairer by returning a portion of the federal sales tax to Canadians with lower incomes, providing relief for people who feel the extra cost at the checkout most acutely,” Carney said.

“The rise in food prices means that a lot of these Canadians need more support right now.”

NDP MP Alexandre Boulerice told reporters Monday that the GST proposal is “a good start. … but it’s not going to be enough.”

Boulerice said he wants to see a more robust federal strategy to help Canadians obtain affordable housing and solid, unionized jobs. Asked whether he would support the GST proposal, he said he would have to review the proposed legislation before committing to it.

Ottawa said the proposed GST benefit will cost $11.7 billion over six years.

The federal government says it will also set aside $650 million to help businesses address hits to their supply chains to avoid passing those costs onto consumers.

The Liberals are also proposing to help businesses write off the cost of new greenhouse buildings upfront to spur investment in food production.

Ottawa will also provide $20 million to the local food infrastructure fund to relieve pressure on food banks.

Carney said the Liberals plan to implement unit-price labelling — which displays the price of a product according to a standard unit of measure, such as weight — to tackle “shrinkflation” on grocery store shelves, and to provide more power to the Competition Bureau to boost competition in the industry.

This report by The Canadian Press was first published Jan. 26, 2026.

Kyle Duggan and Craig Lord, The Canadian Press