GST/HST holiday tax break begins Saturday lasting for two months

The government’s GST/HST holiday tax break begins Saturday, meaning Ontarians won’t pay the 13 per cent sales tax on certain items until Feb. 15, 2025.

Bill C-78, also known as the “Act respecting temporary cost of living relief and affordability” which implemented the tax break, passed its third and final vote in the Senate and received royal assent on Thursday.

Economics professor at McMaster University Mike Veall told CHCH News that the break would amount to savings of about $40 a person.

Although that’s a positive for consumers, it also comes with some challenges for businesses.

“The main negative is of course, because it’s thrown together, it’s going to be confusing, it’s gonna be difficult for businesses to operationalize,” Veall said, “and of course it’s only temporary, so when it comes back off there will be offsetting affects.”

The Canadian Federation of Independent Business says the whole process has been stressful and managing customer expectations is a concern.

It says restaurants may have an easier time changing their systems compared to retailers who have to use their discretion when it comes to which items are tax exempt.

Items that will be affected by the tax break

The list of items that are included in the tax holiday are varied, including vegetable trays, salads and sandwiches, but not food from a vending machine, dietary supplements, or foods not meant for human consumption – like pet food.

Restaurant meals, whether it’s dine-in, takeout or delivery will also be exempted from GST.

Beverages like beer, wine, cider and sake, as well as pre-mixed “ready-to-drink” alcoholic beverages seven per cent or less alcohol by volume, are exempted from GST, as well as some energy drinks that meet specific criteria.

Children’s products like clothing, footwear, car seats, diapers and other important family items are on the list of exempted items.

Toys intended for children under 14-years-old intended for learning or play, which can include board games, and card games which will include Pokémon cards, count as items covered by the tax break.

Items that qualify on the list and are paid for in full during the holiday tax break will not be charged GST/HST.

This means that items were a deposit was paid on a qualifying item before Dec. 14, would still qualify as long as the entire remaining amount is paid during the tax break, and the item is delivered or made available between Dec. 14, 2024 and Feb. 15, 2025.

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