About 12 million Canadians will be getting a little more breathing room on their grocery bills.
What happened: Prime Minister Mark Carney unveiled a suite of new measures aimed at tackling food affordability, including increases to the GST tax credit that will amount to around an extra $800 for eligible Canadians this year.
In 2026, recipients will get a larger one-time bonus tax credit (up to $1,890 for a family of four and $950 for individuals). After that, and for the next four years, the GST tax credit will be bumped up by 25% from today’s level.
Carney also announced $500 million to help businesses manage supply chain disruptions and $20 million in funding for local organizations like food banks.
Why it matters: Since 2021, the cost of groceries and housing has grown 50% faster than Canadians’ average hourly pay, and over a quarter of Canadians are now experiencing some level of food insecurity, according to a recent report.
Yes, but: Kaylie Tiessen, chief economist at The Canadian SHIELD Institute, told The Peak that the move won’t address the root of the food affordability problem. “This is the third temporary measure implemented in as many years to deal with grocery prices, and the problem clearly isn't going away,” she said.
Tiessen says more competition in the food sector is needed to lower prices, pointing to the fact that net margins in Canada’s food and beverage sector are up at least 30% since 2020.
Zoom in: Overshadowed by the headline GST credit, the feds also announced new unit price labelling measures aimed at tackling shrinkflation in grocery aisles.—LA