The Canadian government has announced the GST holiday tax break for Canadians during the holiday season to make things easy for citizens, to buy things as well as save money during festive time.
Canada GST Holiday
The Canadian government is planning for temporary holiday relief of two months, where the Goods and Services and Harmonized Sales Tax will be off from many qualifying goods, mainly groceries and holiday essentials to lower the financial burden on the citizens.
GST/HST holiday on eligible goods will begin from 14 December 2024 – 15 February 2025, if it’s passed in the Parliament. The two-month-long holiday will help many Canadians struggling with their living cost to enjoy a blissful time with their families.
Canada has welcomed the move, the small businesses may get the holiday boost and increase consumer spending as people are going to take full advantage of this break. With the GST/HST holiday, the government has also announced a Working Canadian rebate for eligible Canadians.
GST Tax Break
The proposed temporary GST tax break on goods and services will commence from 14 Dec 2024. The business will remove the GST/HST on eligible goods from the checkout by the time the GST holiday begins.
The citizens should understand the tax break will apply to listed eligible goods that are purchased or delivered to the buyer during the tax break period. The tax break is also applied to the importation of goods listed during the GST/HST tax relief period.
The government took this initiative as they can’t set the prices of goods and this way they will put money back in the citizens’ pockets providing much-needed relief to the citizens during the inflation. The government says that in provinces where GST is HST, the savings will be larger.
The Canadian provinces with HST, that will save more in the upcoming tax break are as follows:
- Nova Scotia
- Prince Edwards Island
- Ontario
- New Brunswick
- Newfoundland and Labrador
What are the qualifying goods for the Canada GST holiday?
The government has included the following types of goods for the upcoming two-month GST tax break if the legislation is passed:
- Children’s clothing including baby clothes, blankets, Children’s garments, socks, ties, mittens, gloves, scarves, etc.
- Children’s footwear except footwear is designed exclusively for recreational activities and sports.
- Children’s Car seats that satisfy Motor Vehicle Safety Standards under the act.
- Children diapers
- Reading printed books or audio of the book, except, magazines, brochures, coloring books, sales catalogs, rate books, and others
- Printed Newspapers only, not digital newspapers, magazines, etc.
- Food and beverage items, such as candies, ice lollies, cakes, muffins, alcoholic beverages, restaurant food & drinks, etc.
- Natural or artificial Christmas tree and decorative items.
- Jigsaw puzzles for all age-type
- Children’s toys for under 14 child
- Video game consoles, physical game media, etc.
Impact of Canada GST holiday
The Canada GST Holiday will not only impact the lives of households, but it will also affect the businesses and economy, let’s see how this two-month tax break impacts all the stakeholders:
- Canadians will be able to buy goods and services, enjoy restaurant meals with families and friends at affordable prices, and save money. According to government estimates, a household spending $2000 will save over $100 during the holiday. The families living in the HST province can expect to save $260 over the $2000 spending basket.
- The businesses will enjoy the boost in sales and business as people will tend to buy more during the tax break.
- Businesses have to make changes in their checkout to remove the GST/HST from the qualified goods, which can be a daunting and confusing task for small businesses.
- The restaurants are expecting a boost during the holiday season due to the tax break and to improve their businesses that have been operating at a loss since the pandemic.
- The holiday tax break will boost Canadians’ purchasing power and the selling rate of businesses, which will affect the economy though not that much but a little bit.
- The two-month GST/HST tax break will cost around $1.6 billion in federal tax relief.
The Canadian government has proposed to introduce a GST/ HST tax break for two months from 14 Dec 2024 to 15 Feb 2025 to offer some relief to the citizens. Citizens should check the qualifying goods list to plan their finances well and spend accordingly which will save you money in this holiday season.
