Prime Minister Justin Trudeau has announced new measures to ease the economic hardship many people have experienced following the pandemic – including a GST/HST holiday on some goods and services that will run from December 14th,, 2024 to February 15th, 2025.
The Liberal government will also send $250 cheques to the 18.7 million people in Canada who worked in 2023 and earned $150,000 or less. Those cheques, which the government is calling the “Working Canadians Rebate,” will arrive sometime in “early spring 2025,” Trudeau said.
“Our government can’t set prices at the checkout, but we can put more money in peoples’ pockets,” said Trudeau at a news conference in Newmarket. “That’s going to give people the relief they need. People are squeezed and we’re there to help.”
Here is a full list of items which will be included in the tax break:
Food and beverages
- Alcoholic beverages, but only wine, beer, ciders and spirit coolers up to seven per cent alcohol by volume.
- Candies, including candy floss, chewing gum, and chocolate, as well as fruits, seeds, nuts or popcorn coated or treated with candy, chocolate, honey, molasses, sugar, syrup or artificial sweeteners
- Salty snacks including chips, crisps, puffs, curls, sticks, popcorn, brittle pretzels and salted nuts or seeds
- Granola products and snack mixtures that contain cereals, nuts, seeds, dried fruit or other edible products
- Ice lollies, juice bars, ice waters, ice cream, ice milk, sherbet, frozen yogurt or frozen pudding, including non-dairy substitutes
- Fruit bars, rolls or drops or similar fruit-based snack foods
- Cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies and croissants with sweetened filling or coating
- Pudding, including flavoured gelatine, mousse, flavoured whipped dessert product or any other products similar to pudding
- Prepared salads, sandwiches, platters of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food
- Food or beverages heated for consumption, beverages dispensed at the place where they are sold and those bought as part of a catering service
Kids’ stuff and games
- Children’s clothing, including garments up to girls’ size 16 or boys’ size 20, baby bibs, socks, hosiery, hats, mittens and gloves, scarves and shoes
- Children’s diapers
- Children’s car seats
- Children’s toys, designed for kids under 14, and jigsaw puzzles
- Video-game consoles, controllers and physical editions of video-games
Literature and trees
- Print newspapers
- Printed books and audiobooks
- Christmas trees
If a family spends $2,000 on the eligible goods in the two-month period, they can expect to save about $100, according to government figures. In Ontario, the HST — where the GST is harmonized with provincial sales tax — the savings will be larger. The government says the same $2,000 worth of eligible purchases will result in estimated savings of $260 over the two-month period.
These savings will have a hefty price tag for the federal government. The tax holiday will cost an estimated $1.6 billion in foregone revenue. According to a report from the CBC, the $250 cheques will cost about $4.68 billion.
Asked about the fiscal implications of the plan, Trudeau said the government has the capacity to implement these measures “because Canada has one of the strongest balance sheets in the world.”
When asked whether it’s appropriate to slash the GST on products that could be considered luxury goods, Trudeau said most of the government’s affordability measures to this point have been more targeted, like GST rebates for low-income people and an OAS boost for seniors. He argued it’s time to give everyone some relief.
The announcement was met with skepticism by Conservative Leader Pierre Poilievre who said Trudeau’s tax measures are “a trick” providing temporary relief ahead of a carbon tax hike in the spring.
NDP Leader Jagmeet Singh says his party will support the affordability measures and will work with the Liberals to temporarily lift the backlog in Parliament to pass the bill in a single day.
