GST Credit to Cost $12.4 Billion Over Six Years
The Canadian federal government’s initiative to increase the Goods and Services Tax (GST) credit, along with a one-time payment to residents, is projected to cost approximately $12.4 billion over the next six years. This estimate exceeds initial government projections.
Cost Breakdown of the GST Credit Increase
The Parliamentary Budget Officer (PBO) released the cost analysis on Monday morning. According to PBO estimates, the one-time payment is expected to amount to over $3.1 billion this year. Annual increases in the GST credit are projected to cost between $1.7 billion and $1.9 billion each year until 2031, totaling around $9.2 billion.
Government Response to Projections
While the PBO’s estimate for annual costs exceeds the government’s earlier projection of $8.6 billion, the one-time payment’s forecast aligns with Ottawa’s estimates. John Fragos, a spokesperson for Finance Minister François-Philippe Champagne, stated, “The total cost of the program will be $11.7 billion over six years.”
Support for Low-Income Households
This initiative targets low-income and modest-income families. More than 12 million Canadians are expected to qualify for this enhanced benefit. Prime Minister Mark Carney announced measures to improve affordability, including a 25% increase in the GST credit starting in July 2026.
- One-time payment: $3.1 billion this year
- Annual increases: $1.7 to $1.9 billion until 2031
- Total projected cost: $12.4 billion over six years
- Eligible Canadians: Over 12 million
Political Reactions
Conservative leader Pierre Poilievre expressed support for the GST credit increase, referring to it as a “temporary solution.” The overall initiative aims to alleviate some of the financial burdens faced by low-income Canadians amid rising grocery costs.
In summary, the planned GST credit increase and one-time payment represent a significant investment aimed at supporting Canadian households, although the financial implications are substantial and have prompted discussions regarding the accuracy of cost projections.
