GST Holiday to Begin Saturday as Senate Passes Bill

A customer shops at a grocery store in Sharon, Ontario, on Nov. 21, 2024. A government bill aimed at waiving GST/HST on essential goods such as groceries, children's clothing, Christmas trees, and restaurant meals between Dec. 14, 2024, and Feb. 15, 2025, passed the Senate on Thursday. The Canadian Press/Chris Young

The federal government’s GST break will be in effect starting on Dec. 14 as the bill cleared the Senate on Dec. 12 and received royal assent to become law.

The tax break, running until Feb. 15, 2025, exempts a wide range of everyday essentials from the 5 percent goods and services tax, such as dining out, groceries, holiday items, books, and a variety of children’s products.

Here’s a more detailed look at what the tax break applies to:

• beer, wine, and cider, as well as pre-mixed alcoholic beverages below seven percent alcohol by volume;
• prepared foods, including vegetable trays, pre-made meals and salads, and sandwiches;
• restaurant meals, whether dine-in, takeout, or delivery;
• some snacks, including chips, candy, and granola bars;
• children’s clothing, footwear, car seats, and diapers;
• children’s toys, such as board games, dolls, puzzles, and video game consoles;
• printed books, newspapers, and religious scriptures;
• Christmas trees, whether natural or artificial.

The tax break is automatic for in-store shoppers, with waivers applied directly at checkout by retailers for qualifying purchases.

For remote shoppers, items must be fully paid for and delivered by the end of the eligible period to qualify for the break. Delivery is defined as when an item is handed over to a shipping service or mailed, rather than when it reaches the consumer’s address.

Canadians in provinces with harmonized sales tax (HST), including Ontario, Newfoundland and Labrador, and the Maritimes, will also benefit from the break. The HST, set at 13 percent in Ontario and 15 percent in the other affected regions, will be fully waived during the period.

The parliamentary budget officer projected in a recent report that the GST holiday will cost Ottawa $1.5 billion. If provinces with HST don’t waive their right to compensation, the tax break could cost up to $2.7 billion.

Legislation

The bill implementing the tax break measure, Bill C-78, “Tax Break for All Canadians Act,” was passed by the Senate on Dec. 12 and received royal assent on the same day.

The Opposition Conservatives had opposed the government bill on the sales tax pause, with Tory Leader Pierre Poilievre calling the measure inflationary.

“Common sense Conservatives will vote against this irresponsible inflationist tax, temporary two-month tax trick, and instead push our plan to axe the carbon tax and axe the sales tax on new homes for everyone, for good,” Poilievre told reporters in Ottawa on Nov. 28.

Meanwhile, Deputy Prime Minister and Finance Minister Chrystia Freeland, who tabled Bill C-78, defended the legislation, saying that inflation has fallen to 2 percent, with the Bank of Canada cutting interest rates multiple times this year. After the bill’s passage, Freeland said the tax break would help Canadians save money during the holiday season.

“Tonight, the Tax Break for All Canadians Act has received Royal Assent. Starting December 14, for two months, all food, many holiday essentials, restaurant meals, and more will be GST-free—helping you save a little extra this season!” Freeland wrote on the social media platform X on Dec. 12.

Jennifer Cowan, Noé Chartier, and The Canadian Press contributed to this report.