Carney Announces New Grocery Benefit and Cost-Relief Measures

OTTAWA — Prime Minister Mark Carney on Monday introduced a wide-ranging affordability package designed to lower grocery bills and reduce financial strain for Canadians facing rising everyday costs.

The announcement comes amid ongoing global economic uncertainty, which continues to push up prices for households and businesses. Carney said the government’s priority is to provide immediate relief to families while also reinforcing the country’s long-term economic strength.

Canada Groceries and Essentials Benefit: What’s Changing

A key part of the plan is the launch of the Canada Groceries and Essentials Benefit, which will replace the existing GST Credit.

Under the new structure:

• The benefit will increase by 25% for five years, starting in July 2026
• A one-time top-up in 2025, equivalent to a 50% increase, will also be issued

According to the government:

• A family of four could receive up to $1,890 in 2025, followed by about $1,400 per year for the next four years
• A single individual could receive up to $950 in 2025, then roughly $700 annually over the following four years

More than 12 million Canadians are expected to benefit from the enhanced support.

Supply Chain Relief to Keep Prices Down

To prevent higher costs from reaching consumers, the plan allocates $500 million from the Strategic Response Fund. This funding will help businesses manage supply chain disruptions instead of transferring those costs to shoppers at checkout.

In addition, a new $150 million Food Security Fund will be created under the Regional Tariff Response Initiative. This fund targets small and medium-sized businesses and partner organizations, with the goal of stabilizing supply chains and limiting price pressures caused by disruptions.

Boosting Canadian Food Production

The government is also introducing immediate expensing for greenhouse buildings to encourage domestic food production.

Producers will be able to fully deduct the cost of eligible greenhouses:

• Purchased on or after November 4, 2025
• Put into use before 2030

This measure aims to stimulate investment within Canada and expand food supply over the medium term.

Support for Food Banks and Local Organizations

To address urgent food needs, $20 million will be added to the Local Food Infrastructure Fund. The funding is intended to help food banks and community organizations provide healthier food options to families experiencing immediate hardship.

National Food Security Strategy in Development

Looking ahead, Carney confirmed work is underway on a National Food Security Strategy. The strategy will focus on strengthening domestic food production and improving access to affordable, nutritious food.

Potential measures under consideration include:

• Unit price labelling
• Stronger competition enforcement across food markets and supply chains

Broader Cost-of-Living Measures Already in Place

Monday’s announcement builds on several affordability initiatives already introduced:

Income Tax Relief

• The first marginal personal income tax rate was reduced from 15% to 14%, effective July 1, 2025
• This provides tax savings of up to $420 per person per year, or $840 annually for two-income households
• Around 22 million middle-class Canadians are expected to benefit

Housing-Related GST Changes

• GST eliminated for first-time buyers purchasing new homes priced up to $1 million
• Reduced GST for first-time buyers on new homes priced between $1 million and $1.5 million

Carbon Tax Cancellation

• The consumer carbon tax was cancelled effective April 1, 2025
• Provinces and territories are no longer required to maintain a consumer-facing carbon price
• Gas prices dropped by up to 18 cents per litre compared to 2024–25, helping ease inflation

School Food Program Expansion

• Budget 2025 made the National School Food Program permanent
• The program is expected to serve meals to up to 400,000 children each year
• Families with two school-age children could save about $800 annually on groceries

Automatic Federal Benefits Coming in 2026

Starting with the 2026 tax year, Automatic Federal Benefits will be introduced to ensure eligible Canadians receive support without needing to apply.

By the 2028 tax year, up to 5.5 million low-income Canadians are expected to automatically receive benefits they qualify for, including:

• Canada Groceries and Essentials Benefit
• Canada Child Benefit

Increasing Competition in Essential Services

The government also highlighted ongoing efforts to improve competition in key sectors such as:

• Telecommunications
• Financial services

Planned reforms aim to lower service fees, simplify provider switching, and reduce banking and related costs for consumers.

Conclusion

Prime Minister Mark Carney said the affordability strategy is designed to provide immediate financial relief while laying the groundwork for a stronger, more resilient economy.

By combining enhanced direct benefits, supply chain support, tax relief, and long-term food security planning, the government aims to lower everyday costs today while improving economic opportunities and wages in the years ahead.

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