Trudeau Announces Two-Month GST Holiday, $250 Cheques for Most Canadians

Prime Minister Justin Trudeau attends a news conference in Vancouver on June 25, 2024. The Canadian Press/Ethan Cairns

Prime Minister Justin Trudeau has announced Canadians will receive a two-month break from the GST on certain items, while most workers will receive a $250 cheque from the government.

“The tax break over the next two months is going to help on the costs of everything as we approach the holidays, as we get into the new year,” Trudeau said during a Nov. 21 press conference. “These are things that recognize that people are squeezed, and we’re there to help.”

The government will also give $250 cheques to 18.7 million Canadians who worked in 2023 and earned $150,000 or less, Trudeau said. The cheques, dubbed the “Working Canadians Rebate,” will be distributed in early spring 2025.

Beginning on Dec. 14, 2024, and ending on Feb. 15, 2025, Canadians will not pay GST or HST on items such as groceries, restaurant meals, beer, wine, and certain pre-mixed alcoholic beverages, and certain “essential” items for children such as clothing, footwear, diapers and toys. Christmas trees will also be tax-free.

Removing the GST from the goods will provide an estimated $1.6 billion in federal tax relief, according to a government press release. 

A family spending $2,000 on qualifying goods would realize GST savings of $100 over the two-month period, the government said, noting in provinces like Ontario, Nova Scotia, and Prince Edward Island where HST integrates the GST with provincial sales tax, the savings will be larger.

When questioned by reporters about whether the measures could fuel inflation, Trudeau said since inflation has dropped to close to the Bank of Canada’s target of 2 percent, the federal government was able to put “money in people’s pockets in a way that is not going to stimulate inflation.”

Trudeau said he hoped the other parties in the House of Commons would “get behind this so we can pass this quickly.” Parliament has been gridlocked for weeks due to the government’s refusal to hand over documents related to Sustainable Development Technology Canada’s alleged misspending of taxpayers’ money.

The NDP has already said it will support the GST holiday.

Reactions

The federal Conservative Party criticized the announcement, saying in a press release that the GST break and cheques would ultimately “do nothing to make life more affordable for working Canadians.”

The party said the federal carbon tax is set to increase by 19 percent in April 2025, and that the government should “axe the carbon tax” if they are “serious about restoring affordability.”

“Canadians deserve relief, not more fake announcements that will do nothing to make life more affordable,” they said.

The Canadian Federation of Independent Business said in a statement that it welcomed all affordability measures, but that “narrow, temporary sales tax holidays can add confusion and administrative complexity for small business owners,” especially those who will be selling both taxable and newly exempt items.

“It will require retailers to reprogram point of sale systems twice in a two-month window,” the group said.

The organization also raised concerns that some small manufacturers and retailers would be excluded from the exemption.

“It is good news that government and political parties are shifting their focus on reducing taxes rather than just increasing them,” the organization said. “But Canadians need permanent, not temporary tax relief.”