Trudeau Announces Temporary Tax Relief for Canadians on Everyday Essentials and Stocking Stuffers

Prime Minister Justin Trudeau stated Thursday that Canadians will soon receive a temporary tax relief on basic purchases, including children's clothing and diapers, restaurant and pre-prepared meals, and typical stocking stuffers, as well as a one-time $250 rebate.

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

"Canadians have gone through a lot. They labor hard. We see it. We've been able to make it through the last few years. Everyone needed to tighten their belts a little. "Now we'll be able to provide a tax break to all Canadians," Trudeau added.

Between December 14 and February 15, the government will assist dozens of consumer goods, including:

• 3. Cakes, pies, doughnuts, brownies, and other pastry products
• 4. Beer, wine, cider, coolers, and some non-alcoholic beverages.
• 5. Candies, chocolates, gum, and other sweets
• 6. Chips, cheese puffs, popcorn, and other salty foods
• 7. Ice cream, various frozen desserts, and pudding
• 8. Fruit bars and granolas
• 9. dollhouses, toy vehicles, Lego, and action figures
• 10. Children's clothing, shoes, car seats, and diapers
• 11. Video games, consoles, and controllers.
• 12. Jigsaw puzzles, board, or card games for all ages.
• 13. Print newspapers and specific types of books.

• Christmas trees: natural or artificial?

"Currently, some foods are not subject to GST, but prepared foods are. "Things like rotisserie chicken," Deputy Prime Minister and Finance Minister Chrystia Freeland remarked at Thursday's event. "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 introduced a new "Working Canadians Rebate" at Thursday's presentation in Sharon, Ontario.

Who qualifies? How will this work?

Businesses are required to remove the GST and HST from qualified goods at checkout beginning December 14 and continuing until February 15. The HST, which aligns the GST with the provincial sales tax, is only applicable in a few 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 household that spends $2,000 on qualified goods $100 over the next two months. The savings will be greater in provinces having the HST.

The "Working Canadians Rebate" will send a $250 payment in early spring 2025 to 18.7 million Canadians who earn $150,000 or less per year and have submitted their 2023 tax returns by the end of the year. Trudeau stated that his administration intends to distribute these "relief" payments in April.

When asked why the $150,000 income threshold was chosen for the refund, Trudeau agreed that "the costs have gone up for everyone."

Trudeau has already spoken out against the concept of providing subsidies to address affordability, claiming it would raise inflation.

In a May interview, Trudeau stated, "One of the core difficulties with affordability is they would love to say, 'Well, you know what? We simply need more money. Can you send us more benefits or an extra $1,000 per month? As soon as you do it, inflation rises by precisely that amount."

Now, Trudeau claims that economic conditions in Canada are different because "inflation is down" and the Bank of Canada continues to cut 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," Mr. Trudeau explained.

The reimbursements will be delivered immediately by the Canada Revenue Agency, by direct deposit or cheque.

NDP claims credit, will ‘support’ tax breaks. 

Last week, NDP Leader Jagmeet Singh promised that if elected, his party would eliminate the GST on daily necessities and monthly payments.

The Liberals' interim GST relief would not apply to monthly invoices.

Singh claimed his party "fought for this" on Thursday, but he also called it a "Liberal letdown" for not including monthly payments.

Singh also stated that the NDP would vote in favor of the reforms.

"We're going to support people getting a break," says Singh. "It's not the way we would have done it, but we need to get a break for people."

The proposed tax cuts will necessitate legislation, which means the Liberals will need the assistance of another party to break the current two-month deadlock in the House of Commons.

The standoff stems from the government's refusal to turn over papers connected to a now-defunct green technology fund. No legislation can be passed until the debate on that topic is concluded and a second waiting privilege motion involving Randy Boissonnault's ex-business partner is resolved.

According to the NDP, after considering whether to support the Liberals and break the stalemate in the House of Commons, the party has decided not to help end it; instead, it has devised a workaround.

"We want to see this relief is done as quickly as possible," Singh informed us. "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 broke the two-party supply-and-confidence arrangement in September, the NDP has gone vote-by-vote to keep the minority government afloat, but it is currently the only party willing to continue doing so, as both the Conservatives and the Bloc Quebecois are preparing to call an early election.

"I hope that all parties in the House get behind this, so we can pass this quickly, so that Canadians can get this relief as soon as December 14," he said.

Bloc Leader Yves-Francois Blanchet said Thursday that while he still has doubts about how this would play out, it would be "ill-advised" to claim he is opposed to the idea of people having more money in their pockets.

"But I'm clearly against the idea of a prime minister saying, 'I'll give you money if you consider voting for me.'" "That goes against the very principle or ethics of the job," he remarked.

Conservatives call relief measures ‘temporary tax trick’

Speaking to reporters on Thursday, Conservative Leader Pierre Poilievre described 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 told Reuters.

When asked if his party would vote against the reforms, Poilievre declined to comment immediately.

"I don't vote for press releases and press conferences," Poilievre stated.

Trudeau previously stated that he "really" hopes all parties in the House support 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 remains a top problem for voters, and David Coletto, CEO of Abacus Data, believes there could be some electoral upside if Canadians believe the Liberals are listening to their concerns.

"I believe this announcement will become well known in families. I believe this is something that people will discuss. Coletto stated that this alone is a victory for the Liberals. "Whether the public believes this is enough, whether it's sufficient, whether it's going to help, I think remains to be seen."

Coletto also emphasized that because the measures are temporary, there is political risk and "some vulnerability" in pulling them back.