Surprise GST Increase for 2025? What Every Canadian Must Know Now!

On: Tuesday, April 22, 2025 10:01 AM

Surprise GST Increase for 2025? What Every Canadian Must Know Now!

Surprise GST Increase for 2025: Since the beginning of 2025, one thing has been in the news in Canada – can the Goods and Services Tax (GST) increase this year? Due to rising inflation, accelerating cost of living and the government’s budget priorities, this discussion is gaining momentum again the GST rate remains stable at 5% until April 2025 and the government has focused on other relief schemes instead of raising taxes – such as an increase in GST/HST credit, a one-time $250 relief payment and temporary tax exemption on essential items. Let us know in detail in this article what is going on regarding GST in 2025, what steps the government is trying to take to provide relief to the citizens, and how you can be financially prepared.

What is GST and its importance?

GST i.e. Goods and Services Tax is a 5% federal tax that applies to most products and services. It was started in 1991, so that a transparent and fair tax system could be established by eliminating the old hidden tax system.
In some provinces – such as Ontario, New Brunswick, Nova Scotia, etc. this tax is levied in combination with the local sales tax as HST (Harmonized Sales Tax), the rate of which can be between 13% to 15%.
GST is a major revenue source for the government to meet the expenditure of public services such as healthcare, education, defense and infrastructure.

What has changed in 2025?

Although there has been no change in the rate of GST, the government has introduced several relief schemes keeping in mind inflation and living challenges.

Increase in GST/HST Credit:

To provide relief to low-income citizens, the GST/HST credit has been increased by 2.7% from July 2025.

The annual maximum amounts are now as follows:

DWP £200 Cost of Living Payment 2025, Financial Relief Plan For Low Income Families

Singles: $349 per year
Couples: $698 per year
For children: $184 per child per year

This means a family of four can get up to $1,066 per year, divided into four quarterly instalments.

One-time $250 relief payment: In March 2025 the government announced a one-time $250 tax-free payment.

What was the eligibility?

Those with an annual income of less than $150,000
Paid automatically based on 2024 tax returns
No application required
This relief has been particularly useful for the elderly, students and families with young children.

Tax breaks on essentials: From December 14, 2024 to February 15, 2025, certain items were temporarily exempt from GST/HST under the “Tax Break for All Canadians Act” (Bill C-78).

These items included:

Fresh grocery items
Diapers and wipes
Children’s shoes and jackets
Car seats and booster seats
Books and educational materials
During this time, families saved an average of $80 to $150.
Practical tips for the general public

Check eligibility for GST/HST credits: Filling your 2024 income tax return on time and accurately is important as this is how you will receive the credit. The CRA’s “My Account” portal is the best way to check and update this information.

Remember payment dates: GST/HST credits are paid out quarterly.

Upcoming dates:

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

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Keep receipts for essential goods: During the GST exemption period, keep your purchase receipts safe. This will make it easier to prepare for future plans and monitor expenses.
Review the budget: Include GST/HST credits and relief payments in your monthly budget. FCAC’s Budget Planner can be a useful tool for this.
Important things for businesses.If you are a small business, these changes are important for you too.
Keep an eye on the CRA website: The CRA regularly updates the rules related to GST/HST. Keep an eye on the website for the latest guidelines.
Review invoices and filing: Include the correct GST/HST rate in your invoices and file taxes on time.
Get tax software or expert help: Tools like QuickBooks, Wave, FreshBooks make your tax reporting easy. Consult a professional accountant if you want.
Offer benefits to the customer during the grace period. Offering promotions and discounts during the GST grace period can increase customer confidence.

Conclusion

There are as many misconceptions as there are discussions about GST in 2025. But the steps taken by the government so far such as the increase in GST/HST credit, one-time relief funds, and tax-free essential items show that efforts are on to provide relief to the public. In such a situation, we do not need to panic, but plan wisely. Keep an eye on government portals, check eligibility for benefits, and take full advantage of every scheme.

FAQs

Q1. Will GST be increased in 2025?

A. No. There is no officially talked plan to increase the GST as of April 2025. The rate is unchanged at 5% since 2008.

Q2. Who is eligible for the GST/HST credit?

A. Eligibility is an option depending on your net income, family size, and residency status. Most individuals or families of low to moderate income qualify

Q3. Do I need to apply for the $250 relief payment?

A. No. The payment was automatically issued by the CRA in March 2025 if your 2024 tax return was filed, and your income was within the eligible range.