The federal government has announced that there will be a tax break from December 14th, 2024 to February 15th, 2025 on a broad range of consumer products, which is estimated will provide $1.6 billion in federal tax relief. 

In addition to relieving the 5% GST, the HST component will be also fully removed in Ontario, Newfoundland & Labrador, Nova Scotia, New Brunswick, and Prince Edward Island.

Products Covered

This tax break will generally apply to the following products:

• Restaurants meals whether dine-in, takeout or delivery;
• Beer, wine, cidar and pre-mixed alcoholic beverages below 7% ABV;
• Prepared foods, including vegetable trays, pre-made meals and salads, and sandwiches;
• Carbonated beverages and fruit flavoured beverages;
• Candies and confectionaries;
• Snack items, such as crisps, popcorn, and salted nuts;
• Granola products and fruit bars;
• Ice cream and puddings;
• Cakes, muffins, and donuts;
• Children's clothing;
• Children's footwear;
• Children's diapers;
• Children's car seats;
• Printed newspapers;
• Certain printed books;
• Select children's toys designed for children under 14 years of age;
• Jigsaw puzzles;
• Video-game consoles, controllers and physical game media; and
• Natural and artificial Christmas trees or similar decorative trees.

This tax relief will be provided at the cash register for consumers, but imports of qualifying products will also qualify.

In addition to this tax break, the federal government has also proposed to provide a $250 rebate for all Canadians who worked in 2023 and earned no more than $150,000 in net income, provided certain requirements are met.

Takeaway

The actual list of products which qualify for this temporary GST/HST tax relief is quite detailed and companies that deal with these types of products should review the list to ensure proper implementation.

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