Ottawa’s plan for GST relief set to cost $12.4 billion over 6 years, PBO says

OTTAWA — The government’s budget watchdog said Monday it expects the federal government’s plan to 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.

There is also a one-time payment being sent 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 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.”

This report by The Canadian Press was first published Feb. 2, 2026.

— With files from Kyle Duggan and Craig Lord