Government of Canada Tables Motion to Cut Costs

On May 27, 2025, the Government of Canada, led by Prime Minister Mark Carney, unveiled a plan to ease financial pressures on Canadians, set out in the Speech from the Throne delivered by His Majesty King Charles III. The centerpiece was a Notice of Ways and Means Motion tabled by the Honourable François-Philippe Champagne, Minister of Finance and National Revenue, aimed at putting more money back in Canadians’ pockets through a middle-class tax cut, GST relief for first-time home buyers, and the removal of the consumer carbon price. These measures are part of the broader Canada cost of living relief measures initiative.

These Canada cost of living relief measures are crucial for all Canadians to understand and utilize effectively.

This update is essential to understand the Canada cost of living relief measures that have been implemented.

It’s essential to keep up with the Canada cost of living relief measures introduced by the government.

More than a year on, all three measures have moved from proposal to confirmed policy. Here’s what was announced, and — more importantly — where each measure actually stands as of mid-2026.

Tracking the progress of the Canada cost of living relief measures will help Canadians maximize their benefits.

1. Middle-Class Tax Cut: Up to $840 in Savings for Families

The government reduced the lowest marginal personal income tax rate from 15% to 14%, effective July 1, 2025. The cut applies to the first $57,375 of taxable income (2025 figures) and benefits roughly 22 million Canadians. We cover the mechanics of this in detail in our dedicated breakdown of the middle-class tax cut.

• Confirmed status: The rate cut took effect on schedule on July 1, 2025. Because the change landed mid-year, the blended rate for 2025 worked out to 14.5%; the full 14% rate has applied for the complete 2026 tax year.
• Savings: Individuals can save up to $420 per year at the full rate, with couples saving up to $840.
• Who benefited: The bulk of the relief targets the two lowest tax brackets (incomes up to roughly $114,750), with close to half going to those earning $57,375 or less.
• How it was delivered: The CRA updated source deduction tables so employers could reduce withholdings directly from paycheques. Self-employed workers and others without source deductions saw the savings when filing their 2025 tax return.

Understanding Canada Cost of Living Relief Measures

2. GST Relief for First-Time Home Buyers: Up to $50,000 in Savings

Understanding the various Canada cost of living relief measures can lead to significant savings.

The government introduced the First-Time Home Buyers’ GST Rebate (FTHB GST Rebate) to reduce or eliminate GST on new homes valued up to $1.5 million. This has since become law: Bill C-4, the Making Life More Affordable for Canadians Act, received Royal Assent on March 12, 2026, and the CRA is now accepting rebate applications. We go deeper on eligibility in our guide to the GST rebate for first-time home buyers.

• Full GST relief: New homes valued up to $1 million qualify for a 100% GST rebate, worth up to $50,000.
• Partial relief: Homes priced between $1 million and $1.5 million receive a linearly phased-out rebate (for example, a $1.25 million home receives a 50% rebate, up to $25,000).
• Eligibility: You must be at least 18, a Canadian citizen or permanent resident, and not have owned and lived in a home in the current year or the four prior calendar years (this applies to you and your spouse or common-law partner). The home must be purchased from a builder, owner-built, or a qualifying co-op share, and used as your primary residence.
• Timing: Your purchase or construction agreement must be signed on or after May 27, 2025 and before 2031, with construction substantially completed by 2036.
• How to apply now: Eligible buyers submit Form GST190 (GST/HST New Housing Rebate Application for Houses Purchased from a Builder) through their CRA account, and have up to two years from the date ownership transfers to file the claim.

3. Removal of the Consumer Carbon Price

The government permanently repealed the consumer carbon price under the Greenhouse Gas Pollution Pricing Act (GGPPA), effective April 1, 2025. This eliminated the federal fuel charge and removed the requirement for provinces to maintain a consumer-facing carbon price.

The repeal of the consumer carbon price was one of the Canada cost of living relief measures that greatly impacted households.

• Confirmed status: The repeal is fully complete. The final Canada Carbon Rebate payment was issued starting April 22, 2025 (up to $456 for a family of four, plus a rural top-up), and all remaining administrative and registration provisions were repealed by November 1, 2025.
• Who else was compensated: Eligible Indigenous governments received $531.5 million in fuel charge proceeds for 2020–25, and farmers in designated provinces received a final Fuel Charge Proceeds to Farmers Tax Credit for 2024–25.
• What replaced it: Federal carbon pricing now applies only to large industrial emitters, as part of Canada’s broader 2030 emissions reduction plan — the consumer-facing charge is gone for good.

Overall, these Canada cost of living relief measures aim to alleviate financial hardships across the nation.

Why This Motion Mattered

Announced in response to sustained pressure over the cost of living, Prime Minister Carney framed the package directly: “My government has a mandate to bring down costs. We are delivering this mandate by cutting taxes — so Canadians keep more of their paycheques to spend where it matters most.” The measures built on earlier affordability initiatives, including the temporary GST/HST holiday on holiday essentials (December 2024–February 2025) and the Working Canadians Rebate, which delivered $250 cheques to 18.7 million workers earning up to $150,000 in 2023.

In summary, the Canada cost of living relief measures play an essential role in improving the financial situation for many families.

Together, the three measures were projected to deliver:

• • $27 billion in tax savings over five years from the middle-class tax cut.

These savings are a direct result of the Canada cost of living relief measures designed to support low- and middle-income families.

• • Up to $3.9 billion in GST rebate savings for first-time home buyers, with the added goal of spurring new housing construction.
  • Lower transportation and heating costs for households following the carbon price repeal.

As a part of the Canada cost of living relief measures, the government also aims to reduce overall expenses for families.

The Canadian Home Builders’ Association (CHBA) and the Toronto Regional Real Estate Board (TRREB) both welcomed the GST relief at the time, pointing to its potential to offset rising construction costs in expensive markets like Toronto and Vancouver.

The success of the Canada cost of living relief measures will be assessed in the coming years as economic conditions evolve.

What Critics Said

The plan wasn’t without pushback:

Critics of the Canada cost of living relief measures suggest additional improvements could be made.

• Housing affordability: Urban planner Carolyn Whitzman argued the GST rebate’s savings might not go far enough in high-cost cities like Vancouver or Toronto, and suggested broader eligibility beyond first-time buyers.
• Inflation risk: Some economists drew comparisons to the 2024 GST/HST holiday and questioned whether stimulus measures could add inflationary pressure; the Finance Minister maintained the measures were targeted enough to avoid that outcome.
• Revenue loss: Questions remain about how the government offsets the combined cost of the tax cut and GST rebate, particularly against ongoing U.S. tariff pressure.

How to Benefit Now

For those seeking to benefit from the Canada cost of living relief measures, it is crucial to follow the guidelines.

• Middle-class tax cut: Confirm your payroll has applied the 14% rate. If you’re self-employed or have no source deductions, make sure your 2025 return claimed the correct blended 14.5% rate.
• GST rebate: If you purchased or are purchasing a new build, owner-built home, or co-op share as a first-time buyer, confirm your agreement date falls on or after May 27, 2025, then file Form GST190 through your CRA account within two years of your closing date.
• Carbon rebate: If you haven’t already, file your 2024 tax return to ensure you received your final Canada Carbon Rebate payment — these have now been fully issued and the program is closed.

Frequently Asked Questions

Many frequently asked questions revolve around the Canada cost of living relief measures and their eligibility.

Did the middle-class tax cut actually happen?
Yes. The rate dropped to 14.5% for 2025 (effective July 1) and has applied at the full 14% rate since 2026, saving up to $420 per person or $840 per couple annually.

Is the GST rebate for first-time home buyers available now?
Yes. Bill C-4 received Royal Assent on March 12, 2026, and the CRA is actively accepting rebate applications for eligible new home purchases.

Can I still get the Canada Carbon Rebate?
No — the program concluded with the final payment issued in April 2025. The consumer carbon price itself was fully repealed by April 1, 2025.

Can I claim the GST rebate for a resale home?
No. It only applies to new homes purchased from a builder, owner-built homes, or qualifying co-op shares, with an agreement signed on or after May 27, 2025.

The Canada cost of living relief measures are specifically aimed at new home purchases, not resale homes.

How do I check if I’m still eligible for any of these measures?
Visit canada.ca or contact the CRA directly — the carbon rebate window has closed, but the tax cut and GST rebate remain active and confirmed policy.

For more information, the Canada cost of living relief measures are detailed on the government’s official website.

This post is based on information from the Department of Finance Canada and the Canada Revenue Agency, updated to reflect confirmed implementation status as of mid-2026. For the latest details on Canada cost of living relief measures, visit canada.ca or consult a tax or real estate professional.