The “New” Canada Groceries Essentials Benefit

Geoff Currier and Evelyn Jacks

We all know the price of groceries has risen faster than most incomes. Given that, and the promise to address affordability in the last election, the federal government announced an enhancement to the existing GST/HST Credit including a one time top-up. Recall, this has been done before during the pandemic. However, buried in this announcement was an important 2025 tax filing change, as well, another example of “tax change by news release” that makes complicates tax compliance. Here’s what you need to know:

New Immediate Expensing for Greenhouse Expenses. If your client base includes a local greenhouse, make note of the fact that producers will be able to fully write-off greenhouse expenses for any greenhouses acquired on or after November 4, 2025. This will be an important measure for some of your clients who are in the food production business. However, CRA will need to see draft legislation to administer this legislation – expected in a couple of weeks.

The “New” CGEB Details. The big questions surrounding the Canada Groceries Essentials Benefit (CGEB) are how much, how soon and who qualifies?

What’s the Structure? There will be a “top-up” as soon as June if there is Royal Asset by March 31. That will be worth 50% of the annual value of the 2025-2026 GST/HST Credit and then an “enriched benefit” starting in July of 2026. This new CGEB would be delivered quarterly in July, October, January and April and it will feature a 25% in the value of the GST/HST Credit for five years.

How Much? The ”how much” question is more difficult to answer. It’s tied to the “who qualifies” question. 

The lump sum top up will be paid to those who filed a 2024 return and qualify under the income-tested ceiling. Advisors, therefore, can help immediately by encouraging procrastinators to get their 2024 tax filings up to date as soon as possible.

The new CGEB will be paid to those who qualify based on filing their 2025 tax returns on time. That’s April 30 for most people and June 15 for unincorporated self-employed filers.

The math has yet to be scrutinized by outside agencies, such as the Auditor General’s office, so all we have to go on right now are the government’s own figures. 

In his announcement, the Prime Minister says that a single senior with a net income of $25,000 would receive a one-time top-up of $267 along with a longer-term increase of $136 for 2026-27. The government numbers say that the total benefit package would be $950. That single person would receive about $700 a year for the next four years.

Another example cited is for a couple with two children with a net income of $40,000. They would receive a one-time top-up of $533 along with an increase of $272 for the 2026-27 benefit year. These additional benefits would bring their total package up to $1,890 for the 26-27 benefit year. That family would receive about $1,400 a year over the next four years. 

From a tax standpoint, the good news for your clients is that this is a refundable tax credit, and as such, will not be considered taxable income. 

There’s a caveat to all of this and that is that this measure must receive Royal Assent by March 31. However, passage of this bill should not be a problem; as some opposition support can be expected. 

Other New Measures: There were some other measures announced on Monday, January 26. The government is devoting $500 million from the Strategic Response Fund to assist businesses deal with supply chain issues in the hope that those extra costs incurred will not be passed along to consumers at the check-out.

Small and medium sized businesses are in line for a portion of the $150 million Food Security Fund, however, the government has not clarified what businesses will qualify; pointing only the previously announced targeted relief for the steel industry.

Another $20 million is being provided to the Local Food Infrastructure Fund, which includes food banks and other organizations dedicated to relieving food insecurity.

However, it’s not known how businesses or food banks will access their new funds nor how they will be distributed. It’s also not known what the administrative costs will be. 

The Bottom Line: The only certainty around this announcement is that tax filings are required to access any new benefits. That’s something tax and financial advisors can encourage.

Another certainty: any government which distributes money is going to be popular with a large swatch of the electorate and Canadians are likely to welcome some relief from the burden of trying to feed their families in this era of food inflation.

Critics might argue that lowering taxes is a more efficient method of assisting lower- and middle-income earners and does not require the additional bureaucracy that this plan will demand.  Putting money is pockets is more immediate when withholding taxes on paycheques are reduced. However, that doesn’t help the millions of nil income filers, pensioners or the unemployed.

What’s your take? Weigh in to our February poll:

Do you agree with the government’s plan to introduce the new Canada Groceries Essentials Benefit (CGEB)?