Prime Minister Justin Trudeau arrives at Vince’s Market in Sharon, Ont. to make an announcement regarding a two month suspension of GST on selected goods, on Nov. 21.Chris Young/The Canadian Press
In case Justin Trudeau’s new policy is too subtle, let this detail draw the picture: His government is lifting the GST on Christmas trees.
In the New Year, the trees will be dumped on the curb, the dead needles will be swept up, and soon afterward, by Feb. 15, the GST holiday will be over too.
But an election will soon be at hand.
There’s barely a fig leaf to cover the naked opportunism of it.
But never mind. Have a glass of cheer. For two months, there’ll be no GST on beer and popcorn. The targeted holiday items include kids’ clothes, shoes and toys. The Liberals want you to thank them when Santa comes down the chimney.
The holiday will remove the 5 per cent GST on the holiday goods – in addition to restaurant meals, snacks and prepared food – from Dec. 14 to Feb. 15.
To top it off, the Liberals promise $250 to be paid to all workers earning less than $150,000 – more than 18 million Canadians – to be paid next spring, probably after an election.
Mr. Trudeau, announcing the measures at a press conference at a grocery store in Sharon, Ont., wanted Canadians to hear he feels their pain. “They work hard,” he said. “We see that.”
To be fair, the old, cheap trick of offering blatant pre-election giveaways has become more popular and not just in Ottawa. Ontario Premier Doug Ford will be sending out $200 cheques in the new year as he moots the prospect of an early election.
What’s included in the GST cuts and what isn’t?
It often works, whether it’s good policy or not. Subtlety is not a virtue in politics. Who doesn’t want money back?
That’s especially true now. Inflation has cooled, but many folks are still shocked by prices and higher mortgage bills. Some people will take the breaks and say that at least the government is doing something to help them a little.
And truth be told, Mr. Trudeau’s Christmas special is the type of thing Canadians have clearly been wanting: a broad-based cash benefit to offset their loss of purchasing power.
The Liberals did some of that last year, with a special GST rebate packaged up as a “grocery rebate,” but it only went so far. Not all Canadians received it. Mr. Trudeau’s government put much more of their budget and their rhetoric on responding to affordability concerns with government programs – child care, dental care, and pharmacare, a school food program – most of which tend to reach specific audiences, rather than the broad public.
In fact, Mr. Trudeau has argued such programs are the main way the federal government can help folks make ends meet. Six months ago, he still said sending out cheques would fuel inflation. On Thursday, he argued there is room to do it now because inflation has cooled.
There’s truth in that. But not enough to cover the crass political calculation. Or the worrisome fact that Mr. Trudeau’s embattled minority-government Liberals are now making Canada’s fiscal policy on a two-month timeline.
Retailers to benefit from GST break, but logistical headaches may be ahead, say industry observers
The Prime Minister might be pleased enough with it. It did send the opposition parties sputtering for a while. They had to complain about the move without complaining about tax breaks people want.
The NDP complained the GST break should be permanent and cover a longer list of items, which would be a popular relief but make the value-added tax a dog’s breakfast. The Bloc Québécois would rather Ottawa spend billions on seniors. Conservative Leader Pierre Poilievre only wants to talk about the carbon tax.
In fact, Mr. Poilievre, who normally portrays himself as an advocate of tax breaks, dismissed this one as a “trick,” because the government will still raise the carbon tax in April. But, as unpopular as the carbon tax is, it comes with rebates that return most of the cash to individuals. And even if those rebates didn’t exist, the carbon tax hike will total $2.2-billion – while the Liberals’ two little gimmicky breaks would reduce taxes by nearly three times that.
At any rate, there isn’t much doubt that most people will welcome a tax break.
It’s less clear whether voters will see it as an effort to alleviate their pocketbook problems or an unpopular government trying to buy their votes. When it comes in the form of a two-month, pre-election tax break on booze and toys and Christmas trees, it tells you the Liberals didn’t have time to worry about such distinctions.