As Canadians gear up for the busy and often costly holiday season, Prime Minister Justin Trudeau’s government has introduced a temporary measure aimed at providing some financial relief. A two-month reduction in Goods and Services Tax (GST) and Harmonized Sales Tax (HST) has been implemented for a variety of essential items and holiday-related goods. This move aims to ease the financial burden for families during the festive season, covering everything from food and toys to Christmas trees and children’s essentials.
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Here’s a detailed breakdown of what this GST and HST holiday mean for consumers and which items are included.
What are the GST & HST Holidays?
The temporary tax reduction applies to a broad range of goods and services essential to the holiday season and family life. The measure includes essential items, prepared foods, children’s clothing and products, and holiday-specific items such as Christmas trees. The government aims to make everyday expenses and holiday celebrations more affordable during this period.
This initiative will last for two months, covering the lead-up to and immediate aftermath of the holiday season.
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Items Covered by the Tax-Free Holiday
1. Food and Beverages
A significant focus of the tax relief is on food and beverages, particularly those commonly associated with gatherings and celebrations. The following items are GST and HST-free during the tax holiday:
- Alcoholic beverages: Includes wine, beer, ciders, and spirit coolers with alcohol content up to 7% ABV. (Spirits are excluded.)
- Non-alcoholic beverages: Carbonated and non-carbonated beverages, fruit juices, and products that can be mixed with water to produce these beverages.
- Snacks:
- Candies, chocolate, and other confectionery items (e.g., candy floss, chewing gum).
- Coated fruits, seeds, nuts, or popcorn are treated with candy, chocolate, or syrups.
- Salty snacks such as potato chips, cheese puffs, pretzels, and popcorn.
- Granola products and snack mixes containing cereals, dried fruits, or nuts.
- Frozen treats: ice cream, frozen yogurt, sherbet, and juice bars.
- Sweet baked goods: cakes, muffins, cookies, doughnuts, pastries, brownies, and croissants with sweet fillings or coatings.
- Puddings and similar dessert products, including mousse and flavored whipped desserts.
- Prepared foods: Includes items such as sandwiches, prepared salads, and cheese or cold-cut platters.
- Ready-to-eat or on-site consumption:
- Foods or beverages heated for consumption.
- Beverages dispensed on-site (e.g., coffee or fountain drinks).
- Food is sold with catering services or in establishments like restaurants, coffee shops, takeout outlets, and food trucks.
- Water: Bottled or unbottled water dispensed at a supplier’s permanent establishment.
2. Games and Puzzles
This category focuses on items that make perfect holiday gifts:
- Jigsaw puzzles for all ages.
- Video games: Including consoles, controllers, and physical game media such as cartridges or discs.
3. Children’s Toys
Designed for children under 14, this includes:
- Board games and card games: Strategy games, playing cards, and memory card games.
- Imitation toys: Items like dollhouses, toy cars, trucks, farm sets, and action figures.
- Soft toys: Dolls, plushies, and teddy bears.
- Construction toys: Including building blocks (e.g., Lego), STEM kits, and modeling clay.
4. Children’s Essentials
The tax holiday also applies to essential items for children, including:
- Children’s clothing: Garments designed for babies and children, up to standard sizing for girls (size 16) and boys (size 20). Items like baby bibs, bunting blankets, and receiving blankets are included, as well as hosiery, hats, gloves, scarves, and belts for children.
- Children’s footwear: Shoes with an insole length of 24.25 cm or less, excluding items designed exclusively for sports or recreational activities.
- Children’s diapers: Includes diapers, inserts, liners, training pants, and rubber pants.
- Children’s car seats: Car and booster seats that meet Canadian Motor Vehicle Safety Standards.
5. Holiday-Specific Items
To make the holiday season more festive and affordable, the following are also tax-free:
- Christmas trees: Both natural and artificial trees.
- Print newspapers: Publications containing news and stories of general interest, excluding digital versions and most magazines or flyers.
- Printed books: Including audio recordings of printed books and religious scripture.
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Impact on Canadian Consumers
Cost Savings
For Canadian households, this measure translates into significant savings on essential and holiday-related purchases. Whether it’s stocking up on snacks for family gatherings, buying toys and games for children, or decorating with Christmas trees, families will benefit from reduced prices during a financially demanding time.
Encouragement of Local Spending
By easing the cost of restaurant meals, prepared foods, and catering services, the tax holiday also encourages Canadians to support local businesses. Reduced taxes on toys and games can likewise promote holiday gift shopping in local stores.
Targeted Relief
The tax reductions are specifically targeted to benefit families, with an emphasis on children’s clothing, footwear, and diapers. These essential items are often a significant part of household budgets, making their inclusion in the tax holiday particularly impactful.
The GST and HST holiday is a thoughtful initiative by the Canadian government to bring temporary financial relief to families during the holidays. Covering a wide range of essential and seasonal items, it ensures that Canadians can enjoy the festive season without as much financial strain. As the tax holiday runs for two months, now is the perfect time for consumers to take advantage of these savings while preparing for holiday celebrations.
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