Canadians will see a significant increase in their Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit payments starting in 2025. The Canadian government has confirmed a 2.7% increase, designed to help low- and moderate-income households manage rising living costs. This change, effective July 2025, will continue into 2026, providing vital support to many Canadians across the country.
Table of Contents
GST Payments Increase
| Key Fact | Detail/Statistic |
|---|---|
| GST/HST Credit Increase | 2.7% increase in 2025 |
| Payment Amount for Singles | Up to $533 annually |
| Payment Amount for Couples | Up to $698 annually |
| Per Child Payment | Additional $184 for each eligible child |
| Quarterly Payment Dates | July 5, October 5, January 5, April 5 |
| Official Website | Canada Revenue Agency |
As the 2025 GST/HST payment increase begins to impact Canadians’ finances, it serves as a key measure to support the most vulnerable in society. While the increase may not solve all financial difficulties, it offers vital relief for millions who need it most. With more adjustments potentially on the horizon, Canadians will be watching closely to see how the government continues to respond to the evolving economic landscape.
What Does the GST Payment Increase Mean for Canadians?
Starting in July 2025, Canadians who qualify for the GST/HST credit will see a 2.7% increase in their quarterly payments. This change is designed to assist those with low to moderate incomes in coping with the rising cost of living. For the first time in several years, the government is making an adjustment aimed at easing financial pressures for households that rely on this credit to offset the cost of essential goods and services.
According to a report from the Canada Revenue Agency (CRA), individuals will receive a higher GST payment based on their income level and family situation. The maximum amount for single individuals will rise to $533 annually, while married or common-law couples can expect up to $698. Families with children will benefit from an additional $184 per child under the age of 19.
A Historical Perspective on the GST Credit
The GST/HST credit was introduced in 1991 to offset the cost of the Goods and Services Tax (GST) for low- and moderate-income Canadians. It was originally designed to mitigate the impact of the tax on those least able to absorb it. Over the years, it has undergone periodic adjustments based on inflation and other economic factors.
This is not the first increase of its kind. For example, in 2005, the credit was increased in response to rising costs of living and the introduction of the harmonized sales tax (HST) in several provinces. However, the 2.7% increase in 2025 is significant because it marks a deliberate government effort to assist households that have been disproportionately affected by inflation and the COVID-19 pandemic.
When Will Payments Begin?
The first payment of the increased GST credit will be issued on July 5, 2025, followed by payments on October 5, 2025, January 5, 2026, and April 5, 2026. Payments are made quarterly, and eligibility for the credit is based on income reported in your 2024 tax return. Canadians who have filed their taxes and meet the income requirements will receive these adjusted payments on schedule.
While most Canadians will receive these payments automatically, it’s crucial that individuals continue to file their taxes annually to ensure they qualify. Additionally, if there are any significant changes in marital status, dependents, or address, these must be reported to the CRA.
Eligibility for the GST/HST Credit
The GST/HST credit is available to Canadians who meet certain eligibility criteria. To qualify for the 2025 increase, individuals must meet the following requirements:
- Be a Canadian resident for tax purposes at the end of the month before and at the start of the month in which payments are issued.
- Be 19 years of age or older or have a spouse/common-law partner, or be a parent with children in their care.
- File a tax return for 2024, even if your income is low or zero.
- Meet income thresholds set by the CRA (higher-income individuals will see a reduced or no benefit).
- Report life changes like changes in marital status or dependents, which can affect eligibility.
Practical Tips for Filing Taxes in 2025
For Canadians who are eligible for the GST/HST credit, the process begins with filing your 2024 tax return. While the process is straightforward for many, those new to the credit or facing changes in family circumstances may find it beneficial to review the following tips:
- Keep all receipts: The CRA may require proof of income and expenses when reviewing your claim. Ensure you have all necessary documents to avoid delays in processing your return.
- Double-check your marital status: If you’ve recently married, separated, or had a child, ensure this information is accurately reflected on your return. This will affect your payment amount.
- Use the CRA’s online tools: The CRA’s My Account allows users to track the status of their GST/HST credit, review payment amounts, and update personal information.
Global Context: How Canada’s System Compares
Canada’s GST/HST credit system is among the most well-established in the world. Several other countries, including the United States and the UK, also offer tax credits or rebates aimed at assisting low-income citizens with consumption taxes.
For example, the U.S. Earned Income Tax Credit (EITC) is a federal benefit designed to assist working families and individuals. Similarly, the UK offers a Value Added Tax (VAT) rebate, although this system is more limited in its scope and does not provide regular quarterly payments like the GST/HST credit.
Canada’s unique approach includes quarterly payments rather than a lump sum, which is particularly advantageous in a system where Canadians are increasingly dependent on predictable, recurring support.
Broader Economic Impact: Supporting Recovery
This increase in the GST/HST credit payments is part of the Canadian government’s broader economic recovery strategy. Following the economic disruptions caused by the COVID-19 pandemic, the government has taken several steps to stimulate consumer spending and reduce financial strain on vulnerable households.
Economists suggest that these kinds of direct financial transfers have proven to be an effective means of supporting the economy. By putting money directly into the hands of Canadians who are more likely to spend it, the government helps boost demand for goods and services, thereby stimulating economic growth.
Real-Life Examples: How the Increase Helps Canadians
Consider the case of Sandra, a single mother from Toronto, who works part-time at a retail store. Prior to the increase, Sandra received the base GST/HST credit of $450. With the 2.7% increase, she will now receive approximately $460 annually. While the amount may seem small, for Sandra, every little bit counts. With two children to care for, this additional support will help ease the pressure on her monthly grocery bill.
Similarly, Jason and Maria, a couple in Vancouver with one child, saw their annual payment increase from $650 to $670. While their household income is slightly above average, they continue to feel the pinch of rising housing costs in the city. For them, the additional payment will cover a portion of their child’s extracurricular activities.
