Prime Minister Justin Trudeau visits Vince’s Market, a grocery store in Sharon, Ont., on Nov. 21. The government announced a sweeping promise to make goods like groceries, children's clothing, Christmas trees and restaurant meals free from GST/HST between Dec. 14 and Feb. 15.Chris Young/The Canadian Press
Prime Minister Justin Trudeau announced Canadians will be getting GST relief during the holidays as people deal with cost of living pressures. He also announced his government will send many Canadians $250 cheques in the mail next year.
Here’s everything you need to know about the federal government’s break on the goods and sales tax.
What is the GST holiday tax break?
In a press conference Thursday, Trudeau announced he will introduce legislation to provide a two-month tax break on the GST and, in applicable provinces, HST.
If legislation is passed – and the NDP have said they will support it – Canadians won’t have to pay federal tax or HST on groceries and holiday essentials from Dec. 14, 2024 to Feb. 15, 2025. Notably, Black Friday falls on Nov. 29 this year, so items purchased during that time will not qualify for GST relief measures.
Trudeau announces two-month partial GST holiday, $250 cheques for many Canadians
What items will Canadians not have to pay GST on?
Groceries that are considered basics – including produce, bread, cereal, canned and frozen food, eggs, coffee, milk, and meat – are already tax-free. But that list does not include non-essential items such as carbonated drinks, candies and snack foods.
Canadians will get GST relief on the following items:
- Children’s clothing, footwear and diapers
- Children’s car seats
- Real and fake Christmas trees
- Physical newspapers
- Physical books and audiobooks
- Children’s toys and games
- Jigsaw puzzles
- Video-game consoles and physical copies of video games
- Beer, wine, cider, plus coolers up to 7 per cent alcohol by volume
- Snacks such as candy, chips, granola bars, ice cream, pudding
- Baked goods
- Carbonated soft drinks, non-carbonated fruit juice, bottled water, fruit-flavoured beverages
- Prepared foods and food platters
- Food and drinks at restaurants and cafés
What items are notably excluded from the holiday GST relief?
Last week, the NDP proposed permanently removing the GST from essentials such as heating, cellphone and internet bills, grocery store items, including prepared meals, as well as diapers and baby clothes. Leader Jagmeet Singh said the Liberals were “letting people down” by implementing only part of what the NDP proposed and only for a short time.
Items that didn’t make the cut include:
- Spirits that have an alcohol content higher than 7 per cent
- Children’s costumes and sports uniforms
- Home heating and utilities
- Phone and internet bills
- Digital subscriptions, including news
- Physical magazines
- Purchases of newly built homes (typically GST and HST apply to purchases of new homes while the resale of residential property is exempt from federal or harmonized sales tax)
What happens to provinces that have HST?
Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island all have a harmonized sales tax. The federal government said it will remove the HST on items that qualify for the holiday tax relief.
Who will get the $250 cheque that’s been promised?
Trudeau said the government will roll out $250 cheques next spring to all Canadians who worked in 2023 and earned up to $150,000.
An estimated 18.7 million people will receive the rebate, for a total cost of almost $4.7-billion, according to the government’s documents.
To be eligible Canadians must have filed their 2023 taxes by the end of 2024.
Why is the government offering GST holiday relief?
It is a precarious time for Trudeau’s government: The minority Liberals have trailed the Conservatives by double digits in public opinion polling for more than a year. And for two months, Trudeau’s agenda has been stalled by a standoff in the House of Commons over the government’s refusal to release documents related to the government’s failed green technology fund.
Calling it a “tax trick” that won’t make up for next April’s increase in the consumer carbon price, Conservative Leader Pierre Poilievre said the reasons for the temporary tax break and $250 cheques are political: so the Prime Minister and NDP Leader can keep their jobs.
With reports from Marieke Walsh, Laura Stone, Stephanie Levitz and The Canadian Press.