From essential goods to common stocking stuffers, Trudeau offering Canadians temporary tax relief

Canadians will soon receive a temporary tax break on essential items, children's clothing and diapers, restaurant and pre-prepared meals and common stocking stuffers, along with a one-time $250 rebate, Prime Minister Justin Trudeau announced Thursday.

The two-month Goods and Services Tax/Harmonized Sales Tax (GST/HST) break will apply across the country, and is aimed at addressing lingering affordability concerns, according to the federal government.

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"Canadians have been through a lot. They work hard. We see that. We've been able to get through the past couple of years. Everyone had to tighten their belts a little bit. Now we're going to be able to give a tax break for all Canadians," Trudeau said.  

Among the dozens of consumer goods the government's offering relief between Dec.14 and Feb. 15 are:

• Prepared salads, sandwiches, and similar pre-made platters
• Dine-in, takeout, or delivery restaurant meals 
• Cakes, pies, doughnuts, brownies, and other pastry items
• Beer, wine, ciders, coolers and certain non-alcoholic drinks
• Candies, chocolate, gum and related sweets
• Chips, cheese puffs, popcorn, and similar salted snacks
• Ice cream, other frozen treats, and pudding
• Fruit bars and granola products
• Doll houses, toy cars, Lego, and action figures
• Children's clothing, footwear, car seats, diapers
• Video-games, consoles, and controllers
• Jigsaw puzzles and board or card games for all ages
• Print newspapers and select types of books
• Christmas trees natural or artificial

“Right now, some foods are not subject to GST, but prepared foods are. Things like a rotisserie chicken,” Deputy Prime Minister and Finance Minister Chrystia Freeland said at Thursday’s announcement. “If you have had a really busy day and you have to feed your kids at the end of the day, maybe you're tempted to go to the grocery store and pick up a prepared meal, but it's expensive.”

The prime minister also announced a new "Working Canadians Rebate” at Thursday’s announcement in Sharon, Ont.

The pocketbook-focused policy announcement was first reported by The Globe and Mail.

Who qualifies? How will it work?

As of Dec. 14 and until Feb. 15, businesses are expected to remove the GST and the HST on qualifying goods at checkout. The HST – in which the GST is harmonized with the provincial sales tax – only applies in certain provinces, including Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island.

According to the federal government, the tax relief will cost $1.6 billion, and save a family spending $2,000 on qualifying goods $100 over the two-month period. The savings will be larger in provinces with the HST.

The "Working Canadians Rebate" will send a $250 payment in early spring 2025 to 18.7 million Canadians who make $150,000 per year or less and have filed their 2023 tax return by the end of this year. Trudeau said his government intends to see these "relief" cheques roll out in April.

Asked by reporters why the $150,000 income threshold was picked for the rebate, Trudeau acknowledged “the costs have gone up for everyone.”

Trudeau has previously spoken out against the idea of delivering rebates to address affordability, as he argued it could drive up inflation.

In an interview in May, Trudeau said, “One of the fundamental challenges around affordability is they would love to say, ‘Well, you know what? We just need more money. Can you send us more benefits or send us an extra thousand dollars a month?’ As soon as you do that, inflation goes up by exactly that amount.”

Now, Trudeau argues the economic conditions in Canada are different as “inflation is down” and the Bank of Canada continues to drop interest rates.

“It allows us to make sure that we are putting money in people's pockets in a way that is not going to stimulate inflation, but is going to help them make ends meet and continue our economic growth,” Trudeau said. 

The Canada Revenue Agency will deliver the rebates directly, either through direct deposit or cheque.

NDP claims credit, will ‘support’ tax breaks

Last week, NDP Leader Jagmeet Singh pledged his party would eliminate the GST on daily essentials and monthly bills, if elected.

The temporary GST relief the Liberals are offering will not apply to monthly bills.

On Thursday, Singh said his party “fought for this” while also calling it a “Liberal let down” for not including monthly bills.

Singh also said the NDP will vote in favour of the measures.

“Obviously we're going to support people getting a break,” Singh said. “It's not the way we would have done it, but we absolutely need to get a break for people.”

The proposed tax breaks will require legislation, which means the Liberals need support from another party to break the current two-month standstill in the House of Commons.

The impasse is over the government’s refusal to hand over documents related to a now-defunct green tech fund. No legislation can pass until debate on that issue ends, and a second waiting privilege motion regarding Randy Boissonnault's ex-business partner is dealt with.

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According to the NDP, after weighing its options over whether to support the Liberals and break the stalemate in the House of Commons, the party says its plan isn't to help end it -- rather, it said, it’s found a workaround.

“We want to see this relief is done as quickly as possible,” Singh said. “So we're prepared to pause the privilege motion that's being debated in the house for one day, get this bill passed in one day so that working families, so that middle class families can get this relief as quick as possible.”

Since Singh tore up the two-party supply-and-confidence pact in September, the NDP has gone vote-by-vote on helping keep the minority government afloat, but it is now the only party willing to continue doing so, as both the Conservatives and Bloc Quebecois are ready to trigger an early election.

Bloc Leader Yves-Francois Blanchet said Thursday he still has questions about how this will proceed, but that he'd be "ill advised," to say he's against the idea of people ending up with more money in their pockets.

"But I’m clearly against the idea of a prime minister who says 'I will give you money in order for you to consider voting for me.' That is against the very principle or ethics of the job," he said. 

Conservatives call relief measures 'temporary tax trick'

Speaking to reporters on Thursday, Conservative Leader Pierre Poilievre called the proposed tax relief measures as a “two-month temporary tax trick.”

“What we have is a two-month temporary tax trick that will not make up for the permanent quadrupling carbon tax on heat, housing, food and fuel,” Poilievre said.

When asked whether his party would vote against the measures, Poilievre would not answer directly.

“I don't vote for press releases and press conferences,” Poilievre said.

Trudeau said earlier that he "really" hopes all parties in the House get behind the measures, "so we can pass this quickly, so that Canadians can get this relief as soon as December 14."

'Some vulnerability,' pollster says

The cost of living is still a top issue for voters, and CEO of Abacus Data David Coletto says there could be some political gain here if Canadians feel the Liberals are responding to their needs.

"I think this announcement will become pretty much known across households. I think it's the kind of thing that people will talk about. And so that alone is, I think, a win for the Liberals," Coletto said. "Whether the public believes this is enough, whether it's sufficient, whether it's going to help, I think remains to be seen."

And, Coletto noted that because the measures are time-limited, there's also risk and "some vulnerability" politically, in rolling them back.

"The big question for me is, are they going to have the courage to put this HST and GST back on all the goods they've removed it [from] given that the carbon price is going to increase just a few months later, so we may not see this come back onto those goods," Coletto said.

"I think the pressure will be on them to probably keep this in place, especially if talk of the town here in Ottawa is that we're going to be in an election in the spring, so the politics of this probably will trump the policy," said Coletto. 

With files from CTV News Chief Political Correspondent Vassy Kapelos and Jeremie Charron