Canada’s Department of Finance has announced enacting the Tax Break for All Canadians Act after receiving Royal Assent on 12 December 2024.
This legislation introduces a temporary Goods and Services Tax/Harmonized Sales Tax (GST/HST) exemption on select goods, like groceries, restaurant meals, drinks, snacks, children’s clothing, and gifts, effective from 14 December 2024 to 15 February 2025.
This follows after Canada’s federal government announced a proposed temporary exemption from (GST/HST) for specific consumer goods on 21 November 2024.
During this period, the Tax Break for All Canadians Act will provide real relief at the cash register by making the following items tax-free:
- Prepared foods, including vegetable trays, pre-made meals and salads, and sandwiches;
- Restaurant meals, whether dine-in, takeout, or delivery;
- Snacks, including chips, candy, and granola bars;
- Beer, wine, and cider;
- Children’s clothing and footwear, car seats, and diapers;
- Children’s toys, such as board games, dolls, and video game consoles;
- Books, print newspapers, and puzzles for all ages; and,
- Christmas trees and similar decorative trees.
By effectively making purchases of these holiday essentials tax-free, the measure will put between CAD 100 and CAD 300 more in workers’ pockets on a basket of CAD 2,000 in purchases over the next two months.
This pragmatic tax relief will make life easier for Canadians during the holiday season—when they tend to face higher than usual costs—and help workers start the new year with more money in their pockets. For instance, a family spending CAD 2,000 on qualifying goods, such as children’s clothing, shoes and toys, diapers, books, snacks for the house, or restaurant meals would realise GST savings of CAD 100 over the two-month period.
