The New Canada Groceries and Essentials Benefit

Dear valued clients:

In this post, we overview the newly announced Canada Groceries and Essentials Benefit.

On January 26, 2026, the Government of Canada announced a proposed enhancement to the previously named GST/HST credit. On February 12, 2026, the proposal received Royal Assent.

The enhancement will consist of:

-        A one-time payment equal to 50% of the 2025-2026 GST/HST credit value, paid no later than June 2026.

-        An increase to the credit of 25% lasting five years starting in July 2026.

Eligible families or individuals will begin receiving the enhanced credit as of July 2026, payable quarterly at the beginning of July, October, January, and April.

Eligibility

You are eligible for the credit if you meet both of the following conditions:

-        You are a tax resident of Canada in both the month prior to the payment and at the start of the month when a payment is made.

-        You are at least 19 years old (or under 19 if you had a spouse or common-law partner or were a parent living with your child).

If you are turning 19 years old during the year, have filed a personal tax return, and meet all other eligibility criteria, you will receive your first payment on the payment date that comes after your 19th birthday.

In addition, your adjusted family net income cannot exceed thresholds set each year. These thresholds vary depending on the number of children you have.

For the base year of 2024 (credit payment year of July 2025 to June 2026), the thresholds range from $56,181 for individuals without children or $59,481 for couples without children, to $74,201 for individuals or couples with four or more children (thresholds set for individuals or couples with one, two, or three children fall in between this range). If you have a spouse or common-law partner, your incomes are combined in determining your eligibility.

Adjusted Net Family Income

Your adjusted net family income is defined as:

-        Your net income (line 23600 of your tax return) plus your spouse’s or common-law partner’s net income, if applicable.

-        Minus any Universal Child Care Benefit and Registered Disability Savings Plan income received (line 11700 and line 12500 of your or your spouse’s or common-law partner’s tax return, if applicable.

-        Plus and UCCB and RDSP amounts repaid (line 21300 and line 23200 of your or your spouse’s or common-law partner’s tax return, if applicable.

 How to Apply

Only new tax residents of Canada may need to apply for the credit. Otherwise, you automatically apply by filing your personal tax return.

New residents may apply for the first year of becoming a tax resident of Canada, before filing a first personal tax return, by filing form RC151.

Disclaimer

The information provided herein is for general informational purposes only and does not constitute accounting, tax, valuation, legal, or other professional advice. The content is not intended to be relied upon as a substitute for professional advice tailored to your specific circumstances.

While reasonable efforts have been made to ensure accuracy at the time of publication, laws, regulations, and interpretations may change, and no representation or warranty is made as to the completeness or current accuracy of the information.

Readers are encouraged to seek independent professional advice before acting on any information contained herein. No professional-client relationship is created by the provision of this information.