Explainer: Prime Minister Carney announces new measures to make groceries more affordable
- Polina Kozlova
- Feb 9
- 3 min read
Prime Minister Mark Carney unveiled a new federal package on Jan. 26, designed to reduce the cost of groceries and other essential goods for Canadians, part of a broader push to make daily life more affordable amid persistent price pressures.
The initiative introduces a major expansion of direct financial support, funding for food security programs and new measures to strengthen food supply chains and domestic production.
“At a time when global uncertainty is putting pressure on families, we are taking decisive action to bring down costs and make life more affordable for Canadians,” said Carney.
Expanded Benefits for Households
At the centre of the plan is the Canada Groceries and Essentials Benefit, a revamped version of the former Goods and Services Tax (GST) Credit.
Under the new design, benefit payments will increase by 25 per cent for five years starting in July 2026, with a one-time top-up equivalent to a 50 per cent increase this year.
According to federal estimates, this means: a family of four could receive up to $1,890 this year, and roughly $1,400 annually for the next four years; and a single individual could receive up to $950 this year and about $700 annually thereafter.
The enhanced benefit is expected to provide additional support for more than 12 million Canadians.
Boosting Food Security and Supply Chains
The federal government is also committing new funding to support businesses and food operators facing rising costs.
$500 million from the Strategic Response Fund will help companies handle supply chain disruptions without passing those costs on to consumers.
A $150 million Food Security Fund will support small and medium enterprises and the organizations that assist them under the Regional Tariff Response Initiative.
Immediate spending for greenhouse buildings will help food producers invest in domestic food production by allowing capital costs to be fully written off if the facilities are placed in service before 2030.
$20 million will go to the Local Food Infrastructure Fund to help food banks and community groups deliver more nutritious food to families in need.
The government will develop a National Food Security Strategy to strengthen domestic food production, improve access to affordable food, and support policies such as unit price labeling and increased competition oversight in food supply chains.
“These measures will support Canada’s agriculture sector and strengthen the systems Canadians rely on every day,” said Heath MacDonald, minister of agriculture and agri food.
The grocery cost initiative complements other affordability actions from Budget 2025, which aimed to ease everyday expenses for Canadians.
The budget included tax cuts for 22 million Canadians, the cancellation of the federal consumer carbon tax and the expansion of programs such as the National School Food Program, which provides meals to thousands of students and can save families an estimated $800 a year on groceries.
Those measures are part of a larger strategy to shift Canada’s economy from “reliance to resilience” while addressing current cost pressures.
While the government argues these measures will provide immediate relief and long-term stability, some economists say that improving food affordability may also require addressing fundamental price drivers in supply chains and competition.
Still, supporters of the plan say the combination of direct financial support and strategic investments lays the groundwork for both short-term assistance and longer-term improvements in food access and cost stability.
“One of the best things about Canada is that you don’t have to be born rich to succeed,” said Carney.
“We’re building Canada strong, because we’re strongest when we look after each other and ensure everyone has a chance to get ahead.”
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