Surprise GST Increase in 2025? What Every Canadian Needs to Know Right Now

There’s been a lot of chatter lately about a possible GST increase in 2025. And with inflation still looming large and everyday costs rising, it’s no surprise Canadians are worried. But here’s the thing — as of July 2025, the GST remains steady at 5%. No hike, no change. Instead, the government has rolled out a few targeted support measures to help Canadians manage costs.

From increased GST/HST credits to one-time relief payments and even temporary GST exemptions, there are new tools in place to cushion the blow. If you’re wondering what all this means for your wallet, let’s break it down.

Snapshot

Here’s a quick overview of what’s going on with GST in 2025:

Backdrop

The GST (Goods and Services Tax) is a federal sales tax of 5% on most goods and services in Canada. Since 1991, it’s been a key part of government revenue, funding everything from healthcare to roads. In certain provinces, the GST is combined with provincial sales tax to form the HST, which ranges from 13% to 15%.

Even if most of us don’t think much about it when we see it on a receipt, the GST plays a big role in our economy. That’s why talk of raising it gets people’s attention — especially during financially tight times.

Relief

Instead of a surprise tax bump, the government is focusing on giving Canadians more support to fight inflation. Let’s dive into the most impactful changes happening this year.

Credits

Starting July 2025, the GST/HST credit has gone up by 2.7%. This credit is a tax-free quarterly payment aimed at low- to middle-income individuals and families.

Here’s what the updated maximums look like:

Payments are sent out in four equal parts—so if you’re a family of four, that’s $266.50 every quarter. It’s not a game-changer, but every little bit helps.

Payment

In March 2025, the government also issued a one-time, tax-free relief payment of $250 to Canadians earning under $150,000. No forms, no applications—it showed up directly via cheque or direct deposit.

Who benefited most? Families, seniors, students—anyone dealing with increased food prices or living on tight margins.

Exemptions

From December 14, 2024, to February 15, 2025, some essential items were temporarily exempt from GST/HST under Bill C-78. These included:

• Fresh food and groceries
• Diapers and baby wipes
• Children’s clothing and shoes
• Car and booster seats
• Books, games, and school supplies

For most families, this resulted in savings of $80 to $150 during one of the most expensive times of the year.

Tips

Wondering how to stay ahead financially this year? Here are some quick wins:

1. File Your Taxes On Time
   Your GST/HST credit depends on your 2024 tax return. Make sure it’s filed and up to date.
2. Mark the Payment Dates
   The next quarterly GST credit payments are due:

• July 5, 2024
• October 4, 2024
• January 3, 2025
• July 4, 2025

3. Save Your Receipts
   If you bought exempt items during the holiday window, track those purchases. It’s a good way to understand your actual savings and spending habits.
4. Rework Your Budget
   Update your budget to include GST credits or one-time relief payments. Tools like the FCAC Budget Planner can help you map it all out.

Business

For small businesses, these updates can influence everything from cash flow to customer habits. Here’s what to keep in mind:

• Stay Updated: The CRA posts regular updates—bookmark their site.
• Check Your Invoices: Make sure GST/HST rates match your province.
• Use Accounting Tools: Platforms like Wave or QuickBooks make compliance easier.
• Engage Customers: If GST was exempt on key items, pass along the savings. Your customers will notice—and remember.

While rumors about a GST hike stirred concern, the reality for 2025 is much calmer. The federal government has prioritized direct financial relief instead of tax increases. By knowing what’s available and planning accordingly, Canadians can better navigate the year ahead—without worrying about a surprise tax bill.

FAQs