Canada Groceries and Essentials Benefit Act

This bill, called the Canada Groceries and Essentials Benefit Act, temporarily boosts the GST/HST credit, the tax-free quarterly payment that helps lower- and modest-income Canadians offset sales taxes on everyday purchases. It does this by amending the Income Tax Act rather than creating a brand-new program.

For the 2025-2026 benefit year, it adds a one-time top-up equal to 50% of the existing credit, paid out as an extra amount in January 2026. Then, starting with the 2026-2027 benefit year and continuing for five years (through payments up to April 2031), it increases the regular quarterly GST/HST credit amounts by 25%. This means eligible individuals, couples, and families with children will receive larger payments than under the standard credit formula, with the extra amount calculated using the same income-tested rules that already apply to the credit (so the top-up shrinks as income rises above certain thresholds, and shared-custody parents split the extra amount as they do the regular credit).

The bill also updates various administrative and cross-referencing provisions in the Income Tax Act so the Canada Revenue Agency can properly calculate, verify, and reassess these new top-up amounts, and includes technical provisions to coordinate with another piece of budget legislation (Bill C-15) if both bills become law around the same time. Overall, the practical effect for citizens is straightforward: anyone who already qualifies for the GST/HST credit will see a temporarily larger payment, with a bigger one-time boost in early 2026 followed by an ongoing 25% increase for five years.

This bill amends the Income Tax Act to increase the maximum GST/HST credit amounts, with a one-time additional payment for January 2026 and a further increase applying to payments from July 2026 through April 2031.

• Payment formulas — sets specific dollar figures and percentage phase-out thresholds (e.g., $1,047, $552, $445, $234, and income thresholds like $45,521 and $46,432) directly into the Act, which determine each eligible individual's deemed payment amount.
• Automatic indexation — adds the new dollar amounts in subsection 122.5(3.005) to the list of figures adjusted annually for inflation under section 117.1(2), starting with taxation years after 2026, without requiring further legislative action.
• Time-limited payment schedule — specifies exact months (July 2026 through April 2031) during which the increased credit applies, after which the enhanced amounts under subsection (3.005) cease unless renewed by future legislation.
• Minister's determination powers — allows the Minister (of National Revenue) to determine or redetermine amounts deemed paid under the new subsections, with a requirement that an individual must request a notice of determination before certain review provisions apply if the Minister sets the amount to nil.
• Shared-custody adjustments — creates formulas splitting the credit amount for parents who share custody, calculated as half the combined entitlement each parent would otherwise receive.
• Coordination with other legislation — includes provisions that automatically alter the wording of this Act's amendments if a separate bill (Bill C-15, the Budget 2025 Implementation Act, No. 1) receives royal assent, adjusting cross-references to additional tax credit provisions.