The temporary GST breaks have started. Here’s what’s included and what isn’t

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Prime Minister Justin Trudeau’s promised GST relief during the holidays begins on Saturday as Canadians deal with cost of living pressures. Trudeau in November also announced his government will send many Canadians $250 cheques in the mail next year, but it’s still unclear exactly who will get them or when.

Here’s everything you need to know about the federal government’s break on the goods and services tax starting Dec. 14.

What is the GST holiday tax break?

In a press conference last month, Trudeau announced he will introduce legislation to provide a two-month tax break on the GST and, in applicable provinces, HST.

That means starting Dec. 14 until Feb. 15, 2025, Canadians won’t have to pay federal tax or HST on groceries and holiday essentials. Notably, Black Friday fell on Nov. 29 this year, so items purchased during that time did not qualify for GST relief measures.

Trudeau announces two-month partial GST holiday, $250 cheques for many Canadians

What items will Canadians not have to pay GST on?

Groceries that are considered basics – including produce, bread, cereal, canned and frozen food, eggs, coffee, milk, and meat – are already tax-free. But that list does not include non-essential items such as carbonated drinks, candies and snack foods.

Canadians are getting a GST break on the following items:

• Children’s clothing, footwear and diapers
• Children’s car seats
• Real and fake Christmas trees
• Physical newspapers
• Physical books and audiobooks
• Children’s toys and games
• Jigsaw puzzles
• Video-game consoles and physical copies of video games
• Beer, wine, cider, plus coolers up to 7 per cent alcohol by volume
• Snacks such as candy, chips, granola bars, ice cream, pudding
• Baked goods
• Carbonated soft drinks, non-carbonated fruit juice, bottled water, fruit-flavoured beverages
• Prepared foods and food platters
• Food and drinks at restaurants and cafés

What items are notably excluded from the holiday GST relief?

Before Trudeau announced the temporary tax break last month, the NDP proposed permanently removing the GST from essentials such as heating, cellphone and internet bills, grocery store items, including prepared meals, as well as diapers and baby clothes. Leader Jagmeet Singh said the Liberals were “letting people down” by implementing only part of what the NDP proposed and only for a short time.

Items that didn’t make the cut include:

• Spirits that have an alcohol content higher than 7 per cent
• Children’s costumes and sports uniforms
• Home heating and utilities
• Phone and internet bills
• Digital subscriptions, including news
• Physical magazines
• Purchases of newly built homes (typically GST and HST apply to purchases of new homes while the resale of residential property is exempt from federal or harmonized sales tax)

What happens to provinces that have HST?

Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island all have a harmonized sales tax. The federal government said it is removing HST on items that qualify for the holiday tax relief.

Who will get the $250 cheque that’s been promised?

Trudeau said in November the government will roll out $250 cheques next spring to all Canadians who worked in 2023 and earned up to $150,000.

An estimated 18.7 million people will receive the rebate, for a total cost of almost $4.7-billion, according to the government’s documents. To be eligible Canadians must have filed their 2023 taxes by the end of 2024.

However it’s unclear whether the cheques will be sent out, as the Liberals’ minority government has not yet received enough support to pass the motion authorizing spending on the cheques in the House of Commons.

Singh and the NDP are pushing for seniors and students to be eligible for the rebates in exchange for the party’s support, while the Conservatives and Bloc Québécois have both opposed the cheques.

Why is the government offering GST holiday relief?

It is a precarious time for Trudeau’s government: The minority Liberals have trailed the Conservatives by double digits in public opinion polling for more than a year. And for two months, Trudeau’s agenda has been stalled by a standoff in the House of Commons over the government’s refusal to release documents related to the government’s failed green technology fund.

Calling it a “tax trick” that won’t make up for next April’s increase in the consumer carbon price, Conservative Leader Pierre Poilievre said the reasons for the temporary tax break and $250 cheques are political: so the Prime Minister and NDP Leader can keep their jobs.

The move, however, has also caused serious tensions within the government itself. Trudeau and Finance Minister Chrystia Freeland are at odds over the spending as her department worries it will make it impossible to stick to Freeland’s pledge to keep the deficit below $40.1-billion.

With reports from Marieke Walsh, Laura Stone, Robert Fife, Stephanie Levitz and The Canadian Press.