Canada: tax holiday approved, $250 bonus suspended

by Marzio Pelù

TORONTO – The “tax holiday” is coming for the Christmas season: today, in fact, the House of Commons approved the Liberal bill (C-78) that provides for a two-month suspension of the goods and services tax or harmonized sales tax on dozens of items, including some food, alcoholic beverages, children’s clothing. 

“By removing the GST from groceries, essential items, and holiday staples, we’re helping you save a little extra money for the new year. Today, we introduced legislation to make this happen. All parties should come together to deliver this much-needed relief for Canadians” wrote yesterday on Twitter X the Deputy Prime Minister and Finance Minister Chrystia Freeland.

Actually, the Conservatives and the Bloc Quebecois voted “no” and the bill was approved (177 yea, 148 nay) with the sole votes of the Liberals and NDP who obtained the temporary suspension of another initiative announced in recent days by Prime Minister Justin Trudeau, namely the granting of $250, una tantum (in the next spring), to all Canadians who worked in 2023 and who earned up to $150,000 after taxes: the NDP wants this benefit to be extended to non-working seniors and people with disabilities who do not have an income from work.

NDP Leader Jagmeet Singh also said his party wants the GST permanently eliminated from essential daily expenses and monthly bills for internet, phone and home heating: for now, however, the “tax holiday” has been approved as announced by the Liberal. The tax break will therefore apply to restaurant meals, snacks, prepared foods, children’s toys, car seats, books, paper newspapers, puzzles and Christmas trees (the more detailed list is in our previous article, here) and should remain in effect from December 14 to February 15.

“We’re pausing taxes for two months on groceries and everyday essentials” wrote Trudeau, today, on Twitter X, publishing a video to confirm the initiative.

According to the federal government, the proposed tax break will save taxpayers approximately $1.6 billion over two months: someone who spends $2,000 on such items over the course of two months will save between $100 and $260, depending on the province (the tax rate varies from province to province).

The provincial governments have reacted differently: Ontario has announced that the tax suspension decided by Ottawa will cost the province $1 billion, but it will support the initiative: Premier Doug Ford has in fact said he agrees and the office of Ontario’s Finance Minister, Peter Bethlenfalvy, has confirmed that it will also remove the provincial sales tax on items not already covered (Ontario has already started an initiative similar to Ottawa’s) and that the Ontario government will not ask for lost revenue back. Instead, the premiers of other provinces such as New Brunswick and Prince Edward Island, have declared – as reported by the CBC – that they want to be compensated by Ottawa for the provincial revenues that will be lost during the tax suspension.

The Bloc Quebecois’s comment after the approval of C-78 was lapidary: “The Liberals and the NDP are offering tax-free champagne to the richest”, wrote the party on Twitter X. And according the Conservatives, the Liberal bill is just a “tax trick”.

In the pic above, Justin Trudeau in a screenshot frpom the video published today on his Twitter X  profile – @JustinTrudeau