On November 21, 2024, the Prime Minister announced a two-month long GST/HST tax holiday in respect of the retail sale of a select list of goods. The intent is to provide relief for Canadian consumers during the winter holiday season. Also, by extending the period to mid-February, this provides an opportunity to assist businesses during what is usually a slow period following the extensive spending that occurs up until the latter part of December.
The tax holiday is set to begin on December 14, 2024, and end on February 15, 2025. It is proposed to apply to the following items:
- Children’s clothing, footwear, diapers, car seats and select toys
- Print newspapers
- Printed books
- Christmas trees
- Prepared foods and restaurant meals (including take-out etc.)
- Snack foods and alcoholic beverages (excluding spirits but including wine, beer, ciders, and spirit coolers up to 7 per cent ABV)
- Video-game consoles, controllers or physical game media
Vendors of these goods will need to obtain a good understanding of what goods are subject to this relief and will need to ensure their systems are able to handle the change.
At this point, we don’t have legislation, and until we do, and it has been passed into law by parliament, vendors will still be required to collect the applicable tax otherwise they risk becoming liable for it themselves.
It will be interesting to see how quickly this particular proposal can be implemented, given the delays the government is facing with the implementation of other proposed legislation such as increasing the capital gains inclusion rate and the lifetime capital gains exemption.
