Tax break will last 2 months
⭐️HERE’S WHAT YOU NEED TO KNOW⭐️
- The Canadian government announced a GST/HST holiday from Dec. 14 to Feb. 15, 2025.
- The tax break applies to things like children’s toys, books and Christmas trees.
- It amounts to between $5 and $15 of savings for every $100 spent.
- Not everyone agrees that it’s a good idea.
- Read on to find out more. ⬇️⬇️⬇️
You may have been hearing about something called a GST/HST holiday and thought, whoopie! A day off school!
Unfortunately, it’s not that kind of holiday, but it could help you and your parents save some money this holiday season.
Last month, Canada’s federal government announced that it will be waiving certain taxes on some items from Dec. 14 to Feb. 15, 2025.
Prime Minister Justin Trudeau said the break is meant to help Canadians deal with the pressure of the high cost of living, but some say this tax holiday won’t be effective.
Prime Minister Justin Trudeau points at food items in a grocery store on Nov. 21 in Sharon, Ontario. The government is removing the GST on some food items for two months, starting Saturday. (Image credit: Chris Young/The Canadian Press)
Savings depend on where you live
The new tax break will apply to a number of items, including children’s toys, prepared foods, restaurant meals, books and Christmas trees.
But how much you save depends on if the province you live in uses something called HST.
Everyone in Canada pays the GST (goods and service tax), which is five per cent, on most items.
So for every $100 you spend on a product, $5 goes to the federal government.
GST isn’t charged on some items, such as fresh fruits and vegetables, meat, eggs and bread.
Most provinces also have a provincial sales tax.
In Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island, they combine provincial taxes and GST into one tax called the harmonized sales tax (HST).
Gaming consoles will cost less between Dec. 14 and Feb. 15, 2025, due to a GST tax break from the federal government. (Image credit: Jae C. Hong/The Associated Press)
If your province uses HST, you’ll save more.
For provinces that don’t use HST, purchasing a big-ticket item like a PlayStation — which costs roughly $500 — would amount to about $25 in savings with GST waived.
For provinces waiving HST, those savings would be higher — between $65 and $75, depending on the province.
Some don’t approve of the holiday
Along with helping out individual Canadians, some businesses also said they might benefit from the GST/HST holiday by encouraging more shopping.
But some businesses have said the tax break has been complicated to work out logistically.
Some said the tax break and rebate are just a way for the Liberals, who are unpopular right now, to gain favour.
The leader of the Conservative Party, Pierre Poillievre, called it a “temporary two-month tax trick.”
The NDP said they’d like to remove the GST on daily essentials permanently.
The Liberals defended their decision, saying it would help all Canadians.
But some economists are warning the tax break could mean higher inflation down the line, which refers to the rate at which prices increase over time.
If you haven’t yet bought your Christmas tree, your family can save five per cent tax when you purchase one. (Image credit: Graham Hughes/The Canadian Press)
That could mean the cost of buying things gets more expensive even faster than before.
There could be more breaks
The federal government has also said they’ll be sending $250 to working Canadians who made $150,000 or less in 2023, starting sometime in the spring.
However, some say that those who need it most — like retirees and those with disabilities — may be excluded from the benefit.
Rob Gillezeau, an assistant professor of economic analysis and policy at the University of Toronto, said studies in the U.S. have shown that temporary tax holidays aren’t effective.
He said the roughly $6 billion the government will spend on the tax holiday and the rebate cheques could be used in better ways.
“What is the worst thing we could do with $6 billion? Maybe this is not the absolute worst, but it’s really, really down there. It’s disappointing,” Gillezeau told CBC News.
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With files from Catharine Tunney, Raffy Boudjikanian, Darren Major and Jenna Benchetrit/CBC
TOP IMAGE CREDIT: Sean Kilpatrick/The Canadian Press