Canadian Prime Minister Mark Carney. — Bloomberg
TORONTO: Prime Minister Mark Carney has moved to raise Canada’s goods and services tax (GST) credit as his government intensifies efforts to counter a stubborn cost-of-living squeeze, with grocery bills still a flashpoint for voters.
Carney said Monday the quarterly GST credit sent to low and middle-income households will rise by 25% for a five-year period starting this year. The government will also issue a one-time top-up in June worth an additional 50% of the annual benefit.
An eligible family of four may receive about C$800 more in relief this year, while a single person could see roughly C$400, Carney said. About 12 million Canadians are expected to benefit.
The package, branded the Canada Groceries and Essentials Benefit, will cost about C$3.1bil in the first year.
“Canadians need a boost today and a bridge to tomorrow,” Carney said, arguing affordability remains his government’s central priority.
The announcement lands as Conservative Leader Pierre Poilievre sharpens his attacks on the government’s affordability record, highlighting that Canada’s food inflation is growing the fastest in the Group of Seven.
The figure is being temporarily distorted by a base‑year effect tied to last winter’s GST holiday.
Food prices in Canada have climbed sharply since before the pandemic, in line with other advanced economies. Tariffs, weather‑related crop losses and supply disruptions have added pressure, according to the Bank of Canada.
Governor Tiff Macklem said in December that some of those forces – including US coffee tariffs and weak harvests – may ease in the months ahead.
Carney also addressed US President Donald Trump’s weekend threat on Truth Social to impose a 100% tariff on Canadian goods if the country “makes a deal with China”.
The prime minister reiterated that Canada is not pursuing a free trade agreement with Beijing; the limited pact he recently signed with President Xi Jinping focused on lowering Canadian tariffs on electric vehicles in exchange for China easing agricultural levies.
Carney noted that Canada, the United States and Mexico are preparing for a formal review of the North American free trade pact.
“It’ll be a robust review,” he said. “The president is a strong negotiator and I think some of these comments and positioning should be viewed in the broader context of that.”
Trump’s broadside came days after Carney’s address at the World Economic Forum, where he urged mid‑sized nations to coordinate against coercive tactics by major powers – a message that drew a standing ovation.
Carney said Monday he stands by the speech.
“My comments in Davos laid out how we see the world, our recognition of how the world has changed,” he said. “Canada understood the scale of the change – the change in US trade policy, what it meant for our economy – we understood that well before other countries.”
Canada was among the first nations hit by Trump’s tariff actions in 2025. With about 70% of Canadian exports flowing to the United States, Carney said his government has responded by accelerating efforts to build domestic capacity and diversify trade ties. — Bloomberg
