GST Holiday Bill Passes the House With Liberal, NDP Support

Prime Minister Justin Trudeau walks through the check out aisle as he tours Supermarche PA du Parc in Montreal on Nov. 25, 2024. The Canadian Press/Christinne Muschi

The Liberal government’s plan to provide a sales tax holiday is one step closer to adoption after the House of Commons passed a bill to implement the measure late on Nov. 29.

The bill, known as the “Tax Break for all Canadians Act,” was passed by Liberal and NDP MPs.

It was opposed by the Conservatives, who say it’s inflationary, and the Bloc Québécois, who say it’s a vote-buying measure.

The proposed legislation will now go to the Senate before it can become law.

Once the measure is adopted, GST/HST will not apply on specific goods between Dec. 14 and Feb. 15. Qualifying items include children’s clothes and toys, Christmas trees, snack foods, and beer and wine, among others.

The Finance Department says the measure will provide Canadians $1.6 billion in tax relief.

Expedited Bill

Government House Leader Karina Gould tabled a motion on Nov. 27 to expedite passage of the bill in the House of Commons.

Gould’s motion said that if the bill is adopted at the second reading stage, it will skip the committee review stage entirely and be “deemed read a third time and passed.” When bills pass third reading they are considered adopted by the House and are sent to the Senate for review.

Gould’s parliamentary secretary, Liberal MP Kevin Lamoureux, said the motion is necessary because the House has been gridlocked since late September. Opposition parties have filibustered proceedings because the government has not produced all documents related to Sustainable Development Technology Canada, a federal green fund.

The motion was adopted late on Nov. 28 just before MPs voted on the sales tax holiday legislation, Bill C-78, sponsored by Finance Minister Chrystia Freeland.

The bill passed the House of Commons with a vote of 176 to 151, with Liberals and NDP voting in favour and the Tories and the Bloc voting against it.

The Liberal government had also proposed sending $250 cheques to every working Canadian with a net income of $150,000 or less, but this met with resistance from the NDP. The Liberal minority government cannot pass legislation without the support of another party.

NDP Leader Jagmeet Singh opposed the cheque measure because it doesn’t include seniors and people with disabilities. Singh has thrown his support behind the sales tax holiday, however, saying the bill would be adopted on Nov. 28.

Liberals used another procedure on Nov. 28 to speed up the adoption of the bill by curtailing debate. The rule of “closure“ was used to prevent the adjournment of debate on Gould’s motion and to require a vote be held at the end of the sitting.

During debate on the closure motion, Tory MP Damian Kurek said Liberals are offering a “small tax trick for a few Canadians.”

He remarked it covers Christmas trees, “but only if you buy them after Dec. 14, and if it’s anything like my household, the tree has already been set up for a few days.”

“Why don’t they reject the tax trick and instead vote to axe the carbon tax for all Canadians, for good?” Kurek asked.

Minister of Revenue Marie-Claude Bibeau replied by accusing the Tories of not understanding climate change and the importance of putting a price on pollution.

“What we’re doing now is we recognized times are tough for families, for seniors, for Canadians in general,” she said. “We don’t have control on prices of goods, but we can eliminate the GST to give a break to Canadians during the holiday season and the difficult months that often come after the holidays.”

NDP MP Laurel Collins said during the debate her party supports the tax break and has proposed removing the GST permanently on all essentials.

In declaring his opposition to the bill, Tory Leader Pierre Poilievre  has said that it’s “inflationary,” calling it a “two-month temporary tax trick that will drive up the cost of living.”

Bloc Leader Yves-François Blanchet has also said he opposes the sales tax break, calling it “staging” for the Liberals and the NDP to “split the remaining last few votes they can get.”

The Canadian Press contributed to this report.