Tax Planning with the Enhanced New CGEB

Geoff Currier and Evelyn Jacks

Lower income Canadians will soon receive larger quarterly benefit payments under the Canada Groceries and Essentials Benefit (CGEB). Replacing the GST/HST benefit, the CGEB includes a one-time top-up beginning June 5, 2026 equal to 50% of a person’s annual benefit, and increased quarterly payments beginning in July.

When and How Much? Starting July 3, 2026, eligible recipients will have also received an increase in their quarterly payments. The increase is substantial. These payments are 25% higher than the previously scheduled GST/HST payments and this level is now locked in for the next five years.

Late Tax Filing Means No Benefits. Benefit amounts are recalculated each July based on the previous year’s tax return. So that means filing a tax return is mandatory. Be sure to tap the shoulders of the procrastinators in your client base over the summer to help them amplify their tax free cash flow by getting those returns filed.

How Much is the Benefit? The amounts can be substantial. For the year July 3, 2026, to June 2027, the maximum a single individual can receive is $679. A married or common-law couple can receive a maximum of $890 and an eligible child under 19 can receive a maximum of $234.

But it’s income tested, and that’s why the tax filings are necessary. There is a clawback that is expensive – as income goes up the benefits go down. That’s why an RRSP contribution plan is so important: it can increase payments by decreasing net income.  

Consider the following which refers to family net income. The maximum income eligible for payments are as follows:

• Single person with no children: $64,232
• Single or married person(s) with one child: $68,912
• Single or married person(s) with two children $73,592
• Single or married person(s) with three children: $78,272
• Single or married person(s) with four children $82,952

Eligibility Starts with Filing a Tax Return: Your eligible clients will need to know that they do not have to apply for this benefit. Their eligibility and the amount they receive is calculated for them based on their previous year’s income tax return. The key is that they need to file! So talk to the procrastinators!

When completing their returns you should be able to tell them if they can expect to receive the benefit and if so, approximately how much they should expect. It may assist some of them with their monthly grocery budgeting.

Also, remind tax filers who owe money to CRA that the CGEB will be confiscated until tax debt is paid off.

• Tax Planning – Smart Things to Do. There are lots of tax planning opportunities. The recipient could invest the money in a TFSA, RRSP or FHSA
• Pay down non-deductible debt like credit cards
• Make the next quarterly tax instalment payment early
• Make a dental appointment – you may even qualify for the Canada Dental Care Plan

The Bottom Line: Your eligible clients may appreciate the extra help in making ends meet in an era of high food prices. The CEGB itself comes with a hefty price tag – the one-time top-up cost $1.3 billion. The Parliamentary Budget Officer estimates that the CGEB will cost the treasury a total of $12.4 billion over its six-year run.

Nevertheless, it’s here now and your clients should take advantage and leverage the opportunity with your sound advice.

Additional Educational Resources: DMA – Tax Services Specialist

Be sure to tune in to Real Tax News With Evelyn Jacks and Friends wherever you listen to your favourite podcasts to find out more.