GST/HST Holiday and Update on the Working Canadians Rebate

In late November 2024, the federal government introduced two notable measures aimed at easing financial pressures: a temporary GST/HST holiday on select items and a proposed $250 rebate for eligible working Canadians.

GST/HST Holiday on Essential Items
From December 14, 2024, to February 15, 2025, consumers will benefit from a GST/HST exemption on a variety of essential goods. This initiative is designed to reduce costs for families during the holiday season and into the new year.

Eligible items include:

  • Prepared foods and restaurant meals: Pre-made meals, salads, and sandwiches.
  • Snacks: Chips, candy, and granola bars.
  • Beverages: Beer, wine, cider, and pre-mixed alcoholic drinks with an ABV of up to 7%.
  • Children’s necessities: Clothing, footwear, car seats, diapers, and toys for children under 14 (e.g., board games, dolls, and video game controllers).
  • Reading materials: Printed books, newspapers, and puzzles for all ages.
  • Seasonal items: Christmas trees (excludes decorative items or lights).

This temporary tax relief is expected to deliver $1.6 billion in federal tax savings. For example, a family in British Columbia spending $2,000 on qualifying goods could save approximately $100 in GST.

What Retailers Need to Know:
Retailers must update their POS systems to reflect the GST/HST exemption, which may require significant adjustments. However, GST registrants can still claim input tax credits for GST paid on these temporarily exempt items.

Refunds for GST Paid in Error:
If GST is mistakenly charged during the holiday, consumers can apply for a refund by filing Form GST189 with the CRA.

Update on the $250 Working Canadians Rebate
Initially, the federal government proposed a one-time, tax-free $250 rebate for eligible working Canadians. However, this rebate was notably absent from the 2024 Fall Economic Statement released on December 16, 2024. With no mention in official updates and reports from various media sources, it appears the rebate may no longer move forward.

If you have questions about how the GST/HST holiday or other tax updates may affect your business, reach out to your Clearline representative for guidance.