Trudeau government to announce GST vacation on certain items before Christmas

Prime Minister Justin Trudeau announced Thursday a suite of new measures designed to alleviate some of the affordability pressures people have been experiencing in the post-COVID era, including a GST holiday for two months on some eligible goods and services.

The Liberal government will also send $250 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.

The GST/HST holiday will start on Dec. 14 and run through Feb. 15, 2025.

People will be able to buy the following goods tax-free: 

• Prepared foods, including vegetable trays, pre-made meals and salads, and sandwiches.
• Restaurant meals, whether dine-in, takeout, or delivery.
• Snacks, including chips, candy, and granola bars.
• Beer, wine, cider, and pre-mixed alcoholic beverages below 7 per cent alcohol by volume (ABV).
• Children’s clothing and footwear, car seats, and diapers.
• Children’s toys, such as board games, dolls, and video game consoles.
• Books, print newspapers, and puzzles for all ages.
• Christmas trees.

With these exemptions, all food in Canada will be essentially tax-free.

If a family spends about $2,000 on those goods in the two-month period, they can expect to save about $100, according to government figures.

In provinces with the HST — where the GST is harmonized with provincial sales tax — the savings will be larger, the government said.

Provinces with the HST include Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island.

In Ontario, for example, the same $2,000 basket of eligible purchases will result in an estimated savings of $260 over the two-month period, the government said.

The two affordability measures come as the government grapples with persistent unpopularity in the polls and after two stinging defeats in recent byelections.

• What do you think about getting a two-month GST break on certain items? Will it make a difference for you during the holiday season? Send an email to ask@cbc.ca. 

The CBC’s Poll Tracker suggests Trudeau’s Liberals are about 17 percentage points back from the first-place Conservatives. That gap has narrowed somewhat in recent weeks.

The renewed focus on the cost of living is designed to bolster the government’s support among people who have been feeling the pinch after prices on almost everything have increased in recent years amid inflation woes.

NDP to support affordability measures

The measures will be contained in a single bill that the NDP intends to support in the House of Commons, according to a source familiar with the discussions. 

On Wednesday evening, NDP Leader Jagmeet Singh said he would support the government’s GST proposal. 

“The NDP will vote for this measure because working people are desperate for relief, and we’re proud we delivered for them again,” he said in a statement.

Singh is expected to expand further on the NDP’s plans in a news conference on Parliament Hill Thursday afternoon. Conservative Leader Pierre Poilievre will also address reporters Thursday afternoon.

Last week, the NDP promised to go even further to improve Canadians’ purchasing power if elected. Singh said he would permanently eliminate the GST on essentials such as grocery store meals and snacks, internet and cell phone bills, diapers and children’s clothing, as well as home heating. 

This measure would deprive the government of $5 billion in tax revenues each year, the NDP estimates, and would be offset by revenues from a tax on excessive corporate profits. 

On Wednesday, Singh wrote to Canada’s premiers asking them to follow suit by removing their provincial sales taxes on essential items.

WATCH | NDP leader pledges to remove the GST from daily essentials: 

NDP Leader Jagmeet Singh says he has written to Canada’s premiers asking them to match his pledge to remove the GST from daily essentials by doing the same with their provincial sales taxes.

The NDP will support the temporary measure proposed by the Liberals, even if it is deemed insufficient.

But Singh said Wednesday night the party “will campaign hard on permanently scrapping the GST on daily essentials and monthly bills, like we already promised.”