Rumors of a surprise GST increase in Canada for 2025 have sparked plenty of conversation, especially with ongoing inflation and rising household costs. While it’s understandable that Canadians are concerned about the potential for higher taxes, the federal government has confirmed that the GST rate remains at 5% as of July 2025. Rather than raising taxes, the focus has shifted toward financial relief through increased GST/HST credits, a one-time payment, and temporary tax exemptions on everyday essentials.
If you’ve been wondering how these updates affect you, this guide covers what’s actually happening, what’s just speculation, and how to make smart financial choices through the rest of the year.
Overview
Let’s break down the key facts as of mid-2025:
| Topic | Details |
|---|---|
| Current GST Rate | 5% (no change in 2025) |
| GST/HST Credit Update | Increased by 2.7% in July 2025 |
| Maximum Credit Amount | Up to $1,066/year for a family of four |
| One-Time Relief Payment | $250 paid in June 2025 |
| Temporary Tax Exemptions | Applied to essentials Dec 2024 to Feb 2025 |
| Payment Schedule | Quarterly (July, Oct, Jan, April) |
| Official Resource | www.canada.ca (CRA portal) |
What Is GST
The Goods and Services Tax (GST) is a federal 5% tax applied to most goods and services in Canada. It was introduced in 1991 to replace the older, hidden manufacturers’ sales tax. Some provinces use the Harmonized Sales Tax (HST), which combines GST with their provincial sales tax—resulting in a total rate of 13% to 15% in places like Ontario and Nova Scotia.
GST is a key revenue stream that funds important public services, including healthcare, infrastructure, education, and national defense.
What’s New in 2025
Although the GST rate has stayed the same, the federal government has launched several programs to ease cost-of-living pressures. Here’s what’s been rolled out so far this year:
1. GST/HST Credit Increase
The GST/HST credit is a tax-free quarterly payment for low- and middle-income Canadians. It was increased by 2.7% in July 2025 to reflect inflation.
Updated annual maximums:
- Singles: Up to $349
- Couples: Up to $698
- Per child: $184
For a family of four, this equals $1,066 per year—paid quarterly at $266.50 per payment.
2. One-Time $250 Relief Payment
To help with rising living costs, a one-time tax-free payment of $250 was issued in June 2025. This was automatically deposited for Canadians with annual incomes below $150,000. There was no need to apply.
The payment helped:
- Seniors on fixed incomes
- Parents facing food price increases
- Students balancing tuition and daily expenses
3. Temporary GST Exemptions
Between December 14, 2024, and February 15, 2025, the government temporarily removed GST on essential goods, including:
- Fresh groceries
- Diapers and baby wipes
- Kids’ clothing and winter gear
- Booster seats and car seats
- Books and educational materials
Families reportedly saved $80 to $150 during this exemption period.
Practical Tips for Individuals
Staying informed and taking action can help you stretch your budget. Here’s what to do:
Check GST/HST Credit Eligibility
Make sure your 2024 taxes are filed. Your credit eligibility is based on household income and family status. Use the CRA’s My Account portal to update any changes in your information.
Track Payment Dates
Knowing when to expect money helps you plan ahead. The quarterly GST/HST credit schedule is:
- July 5, 2024
- October 4, 2024
- January 3, 2025
- July 4, 2025
Set calendar reminders so these payments don’t catch you by surprise.
Save Receipts During Exemption Periods
While GST exemptions are no longer active, it’s helpful to save past receipts to track your savings. This insight may help you plan future purchases if new exemptions are introduced.
Adjust Your Budget
Include GST/HST credits and any relief payments in your monthly planning. Free tools like the FCAC Budget Planner can help you build or adjust a working household budget.
Tips for Small Businesses
For business owners, staying compliant and adaptive is key. Even small changes in tax policy can affect operations. Here’s how to stay ahead:
Monitor CRA Updates
Bookmark the CRA’s GST/HST page and check back regularly for updates, rule changes, or upcoming relief measures.
Review Invoicing for Accuracy
Confirm that the correct GST or HST rate is applied to your invoices, based on your province. Errors can result in penalties or late fees.
Use Digital Tools or Experts
Consider using bookkeeping software like Wave, FreshBooks, or QuickBooks for automated tax tracking. Alternatively, work with a certified accountant to ensure proper filing and optimize deductions.
Promote Savings During Exemptions
During past GST relief periods, some businesses offered extra discounts to customers. Transparency builds customer trust and may boost loyalty.
FAQs
Is the GST rate increasing in 2025?
No, the GST remains at 5% as of July 2025 with no official plans to increase it.
What is the GST/HST credit amount for families?
A family of four can receive up to $1,066 annually, paid quarterly.
Was there a one-time GST payment in 2025?
Yes, a $250 tax-free payment was issued in June 2025 to eligible Canadians.
Which items were GST-free during exemptions?
Groceries, baby items, kids’ clothing, and books were GST-free from Dec 2024–Feb 2025.
How can I check if I qualify for the GST credit?
Log into your CRA My Account and check your 2024 tax return status and details.
