With legislation stalled in Parliament and polls showing Canadians’ disgruntlement with cost-of-living challenges, the federal government yesterday announced a series of affordability measures including a GST/HST holiday and a new Working Canadians Rebate.

The proposed legislation would include two months of GST/HST relief on a range of consumer items, ranging from groceries to restaurant meals and children’s clothing. The break would last from December 14^th, 2024 to February 15^th, 2025. The Working Canadians Rebate would see any Canadian who worked in 2023 and earned as much as $150,000 in individual net income receive a $250 tax-free rebate (by cheque or direct deposit) beginning in early spring, 2025.

The government estimates that 18.7 million Canadians will be eligible for the rebate. Qualifying taxpayers will include residents of Canada as of March 31^st, 2025, who have filed their 2023 tax return by December 31, 2024, and either “claimed the tax credit for Canada Pension Plan or Quebec Pension Plan contributions on employment or self-employment earnings; or claimed the tax credit for Employment Insurance (EI) or Quebec Parental Insurance Plan (QPIP) premiums on employment or self-employment earnings; or, reported income from EI or QPIP benefits.” Eligible recipients must have not been incarcerated for at least 90 days prior to April 1^st, 2025, and must not have been deceased as of April 1^st, 2025.

The federal government estimates the GST/HST holiday will provide approximately $1.6 billion in tax relief, with an Ontario family that spends $2,000 on items during the relief period poised to save approximately $260 over the two-month period.

The categories of goods that will qualify for GST/HST relief is extensive, including:

• Children’s clothing (specifically, clothing for babies including baby bibs, bunting blankets and receiving blankets; children’s garments up to girls size 16 or boys size 20; Children’s or babies hosiery or stretchy socks, hats, ties, scarves, belts, suspenders, or mittens and gloves; Children’s footwear)
• Children’s diapers

• Children’s car seats
• Print newspapers
• Printed and audio books (but not most magazines or periodicals)
• Natural or artificial Christmas trees
• Food and beverages including:
  • Alcoholic beverages (excluding spirits but including wine, beer, ciders, and spirit coolers up to 7 per cent ABV)
  • Carbonated beverages, non-carbonated fruit juice or fruit flavoured beverages or products that, when added to water, produce one of these beverages
  • Candies and confectionery classed as candy or goods sold as candies (e.g., candy floss, chewing gum, and chocolate); fruits, seeds, nuts or popcorn coated or treated with candy, chocolate, honey, molasses, sugar, syrup, or artificial sweeteners
  • Chips, crisps, puffs, curls, or sticks (e.g., potato chips, corn chips, cheese puffs, potato sticks, bacon crisps, and cheese curls), popcorn, brittle pretzels, and salted nuts or seeds
  • Granola products and snack mixtures that contain cereals, nuts, seeds, dried fruit, or other edible products
  • Ice lollies, juice bars, ice waters, ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, including non-dairy substitutes
  • Fruit bars, rolls or drops or similar fruit-based snack foods
  • Cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating
  • Pudding, including flavoured gelatine, mousse, flavoured whipped dessert product, or any other products similar to pudding
  • Prepared salads, sandwiches, platters of cheese, cold cuts, fruit or vegetables, and other arrangements of prepared food
  • Food or beverages heated for consumption
  • Beverages dispensed at the place where they are sold
  • Food or beverages sold in conjunction with catering services
  • Food or beverages sold at an establishment where all or substantially all of the food or beverages sold are currently excluded from zero-rating (e.g., a restaurant, coffee shop, take-out outlet, pub, mobile canteen, lunch counter, or concession stand)
  • Bottled water or unbottled water that is dispensed at a permanent establishment of the supplier

• Children’s toys including:
• • a board game or card game (e.g., a strategy board game, playing cards, or a matching/memory card game)
  • a toy that imitates another item (e.g., a doll house, a toy car or truck, a toy farm set, or an action figure)
  • a doll, plush toy or soft toy (e.g., a teddy bear)
  • a construction toy (e.g., building blocks, such as Lego, STEM assembly kits, or plasticine)
  • Jigsaw puzzles
• Video-game consoles, controllers or physical game media (e.g., a video-game cartridge or disc)

Our team will provide updates when further technical details are provided about the GST/HST relief and rebate cheque program, along with an updated estimate as to when rebates will be made available. As we noted in a previous blog  on proposed capital gains tax relief, the government’s minority status and the current stalling of legislation in the House of Commons as the federal parties engage in continued privilege debates, could delay or derail the passage of legislation to implement these proposed tax relief measures.

The coming days will provide greater clarity as to whether the opposition parties will support the Liberals’ proposed GST/HST break and rebates heading into the holidays.

The RH Partners Tax Team

For more information on these and other tax measures that relate to your personal or professional financial situation, contact a member of the RH Partners Tax team today.