Prime Minister Mark Carney‘s recently announced Canada Groceries and Essentials Benefit and a related GST credit will cost an estimated $12.4 billion over six years, according to the Parliamentary Budget Officer (PBO).
The report released Monday by the PBO comes after Carney’s announcement on Jan. 26, which included boosting the GST credit for qualifying Canadians by 25 per cent, and adding a one-time payment he said was equal to 50 per cent of the GST credit for this year.
Carney said these new measures were also being renamed the Canada Groceries and Essentials Benefit to “deliver hundreds of dollars more into the bank accounts of more than 12 million Canadians.”
The PBO’s report estimates this year’s one-time payments for qualified Canadians alone will cost over $3.1 billion, and the annual increase to the GST credit next fiscal year would cost close to $1.8 billion.
By 2031, increasing the GST credit will cost an an estimated $9 billion.
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The PBO report says its estimates were based on the proposed boost to the GST credit compared to a scenario where the GST credit was unchanged.
Carney said the boost to the GST credit, as well as the one-time payment, will see some families receive several hundred dollars more each year compared to what they may qualify for now.
“Right now, a family of four receives about $1,100 a year with the existing GST credit. With the new Canada Groceries and Essentials benefit, that same family will receive up to $1,890 this year and about $1,400 a year for each of the next four years,” Carney said.
The proposal was announced as a measure to address the higher cost of living in Canada, particularly with food prices weighing on household budgets.
In addition to the GST credit boost and one-time payment, Carney proposed separate measures aimed at making food more affordable for Canadians over the long-term.
“To address the root causes of food security, we’re developing a new national food security strategy that strengthens domestic food production, improves access to affordable, nutritious food,” he said.
Food inflation in December spiked five per cent compared to a year earlier, according to Statistics Canada, which was more than double the rate at which prices increased on average for all goods and services in the same period.
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