Carney has faced opposition pressure to lower the prices of food and other necessities for low-income people.
Published on January 26, 2026
Canadian Prime Minister Mark Carney announced a multibillion-dollar package as part of a series of measures to reduce the costs of food and other essentials for low-income families.
On Monday, Carney announced a 25 percent increase over five years to the Goods and Services Tax (GST) credit, starting this year.
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The GST credit, which is being renamed the Canada Grocery and Essentials Benefit, will provide additional and important support to more than 12 million Canadians, Carney said in a statement.
The government will also provide a one-off top-up equivalent to a 50 percent increase this year to eligible residents.
“We are introducing new measures to reduce costs and ensure Canadians have the support they need now,” Carney said.
The measures would cost the government C$3.1 billion ($2.26 billion) in the first year and between C$1.3 billion ($950 million) and C$1.8 billion ($1.3 billion) in each of the following four years, he told reporters at a news conference, according to the Reuters news agency.
While overall consumer price inflation in Canada eased to 2.4 per cent in December, “food price inflation remains elevated due to global and domestic factors, including supply chain disruptions, higher US tariffs due to the trade war and climate change/extreme weather,” Tony Stillo, director of Canadian economics at Oxford Economics, told Al Jazeera.
The government is also setting aside C$500 million ($365 million) from the Strategic Response Fund to help businesses deal with the costs of supply chain disruptions without passing those costs on to Canadians. will create a C$150 million ($110 million) food security fund within the existing program. Regional Rate Response Initiative for small and medium-sized businesses and the organizations that support them.
changing landscape
“The global landscape is changing rapidly, leaving economies, businesses and workers in a climate of uncertainty. In response, Canada’s New Government is focused on what we can control: building a stronger economy to make life more affordable for Canadians,” said Mr. Carney.
The new measures were unveiled on the day Parliament resumed after the winter break.
Opposition parties have urged Carney to reduce prices of everyday goods, especially as parts of the economy come under pressure from US President Donald Trump, who imposed 35% tariffs on the country as well as separate tariffs on steel, aluminum and wood, leading to job losses in those sectors.
Over the weekend, Trump escalated his threats and said he would impose a 100 percent rate on Canada if it enters into a trade agreement with China. Carney is working to diversify Canadian exports away from the United States, its largest trading partner and where nearly 80 per cent of its exports went last year, including by increasing its business with other markets like China.
