Prime Minister Mark Carney announced a temporary increase to the federal GST credit on Monday, positioning the move as targeted relief for Canadians struggling with the rising cost of groceries and other essentials.

The measure includes a 25 per cent increase to the GST credit, rebranded as the Canada Groceries and Essentials Benefit. The enhanced credit is set to begin this year and remain in place for five years, aimed primarily at lower-income households most affected by food inflation.

In addition to the annual increase, the federal government will issue a one-time payment in 2026 valued at 50 per cent of the enhanced credit. Officials say the upfront payment is intended to provide immediate support as households continue to face elevated food and household costs.

Carney made the announcement at an Ottawa grocery store as Members of Parliament returned to the House of Commons following the winter break. He said the price of essentials has been too high for too long, adding that many Canadians are feeling financial strain on a daily basis.

The prime minister linked high grocery prices to a combination of factors, including lingering economic effects of the pandemic, global supply chain disruptions tied to U.S. President Donald Trump’s trade policies, and climate-related impacts on food production. The government says the GST credit boost is one part of a broader affordability strategy expected to be debated in Parliament in the coming weeks.