By MorinvilleNews.com Staff
Canadians will see a tax break starting December 14, 2024, as the Liberal government implements a temporary GST/HST exemption on various goods, including food, children’s items, and alcohol. The Government of Canada says the initiative, which will last until February 15, 2025, aims to help ease the financial burden many Canadians have faced in recent years.
“The past few years have been challenging. It feels like the price of everything has gone up. And while inflation is cooling and interest rates are dropping, we know that Canadians aren’t feeling that in their household budgets yet,” said Prime Minister Justin Trudeau in a media release on Thursday. The government’s response, he added, is to give Canadians more money in their pockets through a break on essential purchases.
This new tax relief covers a wide range of items, from prepared foods like sandwiches and pre-made meals to children’s clothing and car seats. The exemption will also apply to snacks, books, Christmas trees, and even alcoholic beverages with an alcohol content of less than 7 percent ABV. According to Trudeau, the initiative is designed to give Canadians, particularly working families, “real relief at the cash register.”
As part of the broader support package, the government is introducing the Working Canadians Rebate, which will provide a $250 cheque to Canadians who earned up to $150,000 in 2023. This rebate is set to arrive in the spring of 2025. Deputy Prime Minister Chrystia Freeland highlighted the significance of the measure, saying, “The holiday season is when expenses are highest for many Canadians and their families… With new tax relief on groceries and seasonal expenses, we are reducing costs when they are highest for Canadians.”
The announcement is expected to benefit a substantial portion of the population, with 18.7 million Canadians set to receive the rebate. Freeland emphasized that the relief was aimed at helping families celebrate the holidays and start 2025 with more financial freedom.
However, the measure has drawn mixed reactions. The Canadian Federation of Independent Business (CFIB) welcomed the tax cut but expressed concerns over the temporary nature of the relief. Dan Kelly, President of the CFIB, pointed out that while the tax cut could stimulate demand in sectors like restaurants, small businesses would face significant challenges with the administrative complexities of the program. “The lack of consumer demand is currently the top limitation on sales growth for small firms,” Kelly said, urging the government to consider permanent tax relief instead of short-term measures that may confuse both businesses and consumers.
Similarly, the Canadian Taxpayers Federation (CTF) acknowledged the relief but called for permanent tax cuts. “It’s good to see Canadians are finally getting some relief from this government’s high-tax burden,” said Franco Terrazzano, CTF Federal Director. “But Prime Minister Justin Trudeau needs to make this relief permanent because if he re-imposes sales taxes on diapers and rotisserie chickens after the holidays, it will be unacceptable to taxpayers.”
The temporary nature of the measure has led to concerns that once the holiday season ends, consumers will face higher costs again. According to Terrazzano, many Canadians might struggle to adjust when the GST is re-applied in mid-February. He also pointed to other tax hikes, including the carbon tax increase set for April 2025, which could offset any savings from the temporary relief.
While the government’s efforts to alleviate the financial strain on Canadians are welcome, the temporary nature of the GST break raises questions about the long-term impact. The government says it hopes that this measure will provide immediate relief, but critics argue that lasting change requires more than just temporary cuts.
