Ottawa’s plan for GST relief set to cost $12.4 billion over 6 years, PBO says
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OTTAWA – The government’s budget watchdog said Monday it expects the federal government’s plan to temporarily increase the GST credit and offer a one-time payment to Canadians will cost Ottawa an estimated $12.4 billion over six years.
The number released by the Office of the Parliamentary Budget Officer is slightly higher than Ottawa’s initial projection.
Prime Minister Mark Carney promised last week new measures to help lower-income consumers deal with the high cost of groceries, including a 25 per cent hike to the GST credit over five years starting in July 2026.
The federal government is also issuing a one-time payment this spring worth 50 per cent of the credit.
The PBO report estimates the one-time payment will cost more than $3.1 billion this year, while the annual increases will cost between $1.7 billion and $1.9 billion annually through to 2031 — roughly $9.2 billion.
The estimate of the cost of the annual increases is slightly higher than the government’s $8.6 billion projection. The $3.1 billion one-time payment estimate aligns with the government’s estimate.
In a statement, the government defended its projections.
“While we cannot speak to the methodology adopted by the PBO or the assumptions used to support their calculations, we maintain that the total program package will cost $11.7 billion over six years,” wrote John Fragos, spokesman for Finance Minister François-Philippe Champagne.
The GST credit is paid out quarterly to families with low and modest incomes. More than 12 million Canadians are expected to be eligible for the new benefit.
Conservative Leader Pierre Poilievre has said his MPs will support the measure, despite calling it a “Band-Aid solution.”
On Monday, Conservative MP Melissa Lantsman introduced a motion to fast track the enabling legislation through the House of Commons, which passed without opposition.
The bill is now expected to go through the remaining stages of debate in the House of Commons by the end of day on Wednesday, but still needs to be debated and voted on in the Senate.
This report by The Canadian Press was first published Feb. 2, 2026.
— With files from Kyle Duggan and Craig Lord
Note to readers:This is a corrected story. A previous version said the PBO’s forecast was over five years.