Share
A GST/HST vacation has just been voted in for the holiday season, affecting all Canadians. What are the impacts and which products are affected?
The Government of Canada is proposing an exceptional measure to reduce the cost of living during the holidays: the GST/HST will be eliminated on holiday essentials from December 14, 2024, to February 15, 2025.
The relief provided by Bill C-78 mainly targets food, goods intended for children and other specific items. This initiative aims to provide tangible financial relief to Canadian families during a time of increased spending.
Key points of the measure
Significant impact
Thanks to the GST/HST exemption, there will be a reduction in prices at the checkout on almost all foods and on certain specific goods mainly aimed at children.
Immediate application
Businesses must eliminate the GST/HST at checkout starting December 14, 2024, until February 15, 2025. The reduction will be applied directly at checkout and the consumer will not have to make a specific refund request. The burden of applying this reduction must therefore be borne directly by the merchant.
Eligible products
This relief mainly concerns the following goods:
- Food, drinks and restaurant meals;
- Children’s clothing, shoes and diapers, car seats and certain toys;
- Newspapers and printed books;
- Christmas trees.
A detailed list of targeted products is presented below.
Targeted businesses
Bill C-78, which defines what is an “eligible supply” for this temporary measure, makes no distinction as to the type of recipient and supplier. These measures therefore apply to retailers, manufacturers and wholesalers, as well as to imported products.
Application at the federal level only
Quebec announced that it would not harmonize with this measure at the QST level. Quebec consumers will therefore have to continue to pay the QST on the goods concerned.
In provinces where the HST applies, namely Ontario and the Maritime provinces, the holiday will apply to the entire amount of the HST.
Your Raymond Chabot Grant Thornton advisor can help you determine the measures that apply to your situation and assist you in the necessary steps to enable you to benefit from them. Do not hesitate to consult us for any questions related to the application of this new temporary measure.
Exhaustive list of products eligible for the GST/HST holiday
The following are descriptions of goods that would qualify for the proposed tax relief.
Children’s clothing: meaning garments (other than garments of a class that are used exclusively in sports or recreational activities, costumes, children’s diapers, or children’s footwear) that are:
- Designed for babies, including baby bibs, bunting blankets and receiving blankets;
- Children’s garments up to girls size 16 or boys size 20, according to the national standard applicable to the garments, and if no national standard applies to the children’s garments, girls or boys sizes extra small, small, medium, or large; or,
- Hosiery or stretchy socks, hats, ties, scarves, belts, suspenders, or mittens and gloves in sizes and styles designed for children or babies.
Children’s footwear: meaning footwear (other than stockings, socks or similar footwear or footwear of a class that is used exclusively in sports or recreational activities) that is designed for babies or children and has an insole length of 24.25 centimetres or less.
Children’s diapers: meaning a product designed for babies or children and that is a diaper, a diaper insert or liner, a training pant, or a rubber pant designed for use in conjunction with any of those items.
Children’s car seats: meaning a restraint system or booster seat that conforms to the Canada Motor Vehicle Safety Standard 213, 213.1, 213.2 or 213.5 under the Motor Vehicle Restraint Systems and Booster Seats Safety Regulations.
Print newspapers: meaning print newspapers containing news, editorials, feature stories, or other information of interest to the general public that are published at regular intervals. They would not include electronic or digital publications. They would also exclude most fliers, inserts, magazines, periodicals, or shoppers.
Printed books: including a printed book or an update of such a book, an audio recording where 90 per cent or more of it is a spoken reading of a printed book, or a bound or unbound printed version of scripture of any religion. However, they would not include:
- a magazine or periodical purchased individually, not through a subscription;
- a magazine or periodical in which the printed space devoted to advertising is more than 5 per cent of the total printed space;
- a brochure or pamphlet;
- a sales catalogue, a price list or advertising material;
- a warranty booklet or an owner’s manual;
- a book designed primarily for writing on;
- a colouring book or a book designed primarily for drawing on or for affixing or inserting items such as clippings, pictures, coins, stamps, or stickers;
- a cut-out book or a press-out book;
- a program relating to an event or performance;
- an agenda, calendar, syllabus or timetable;
- a directory, an assemblage of charts or an assemblage of street or road maps (other than a guidebook or an atlas that consists in whole or in part of maps other than street or road maps);
- a rate book; or,
- an assemblage of blueprints, patterns, or stencils.
Christmas trees or similar decorative trees: whether natural or artificial.
Food or beverages: items for human consumption that are:
- Alcoholic beverages (including wine, beer, ciders, and spirit coolers up to 7% ABV but excluding spirits);
- Carbonated beverages, non-carbonated fruit juice or fruit flavoured beverages or products that, when added to water, produce one of these beverages;
- Candies; confectionery classed as candy or goods sold as candies (e.g., candy floss, chewing gum, and chocolate); fruits, seeds, nuts or popcorn coated or treated with candy, chocolate, honey, molasses, sugar, syrup, or artificial sweeteners;
- Chips, crisps, puffs, curls, or sticks (e.g., potato chips, corn chips, cheese puffs, potato sticks, bacon crisps, and cheese curls), popcorn, brittle pretzels, and salted nuts or seeds;
- Granola products and snack mixtures that contain cereals, nuts, seeds, dried fruit, or other edible products;
- Ice lollies, juice bars, ice waters, ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, including non-dairy substitutes;
- Fruit bars, rolls or drops or similar fruit-based snack foods;
- Cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating (note that many bread products, such as bagels, English muffins, croissants, and bread rolls, are already zero-rated);
- Pudding, including flavoured gelatine, mousse, flavoured whipped dessert product, or any other products similar to pudding;
- Prepared salads, sandwiches, platters of cheese, cold cuts, fruit or vegetables, and other arrangements of prepared food;
- Food or beverages heated for consumption;
- Beverages dispensed at the place where they are sold;
- Food or beverages sold in conjunction with catering services;
- Food or beverages sold at an establishment where all or substantially all of the food or beverages sold are currently excluded from zero-rating (e.g., a restaurant, coffee shop, take-out outlet, pub, mobile canteen, lunch counter, or concession stand); and
- Bottled water or unbottled water that is dispensed at a permanent establishment of the supplier.
Select children’s toys: a product that is designed for use by children under 14 years of age in learning or play and that is:
- a board game or card game (e.g., a strategy board game, playing cards, or a matching/memory card game);
- a toy that imitates another item (e.g., a doll house, a toy car or truck, a toy farm set, or an action figure);
- a doll, plush toy or soft toy (e.g., a teddy bear); or,
- a construction toy (e.g., building blocks, such as Lego, STEM assembly kits, or plasticine).
Jigsaw puzzles, for all ages.
Video-game consoles, controllers or physical game media (e.g., a video-game cartridge or disc).