Federal Government Announces Tax Relief and Rebates to Ease Cost-of-Living Pressures

Toronto, ON – The federal government is introducing new measures aimed at easing cost-of-living pressures for Canadians as the holiday season approaches. Starting December 14, 2024, a temporary GST/HST exemption will make many essential goods and holiday staples tax-free, coupled with a rebate targeting working Canadians early next year.

Prime Minister Justin Trudeau announced the tax relief measures, highlighting the government’s commitment to putting more money in Canadians’ pockets during a challenging economic period. “Our government can’t set prices, but we can give Canadians, and especially working Canadians, more money back in their pocket,” said Trudeau.

The tax exemption will cover a wide range of items, including prepared foods, restaurant meals, snacks, alcoholic beverages under 7% ABV, children’s clothing and footwear, toys, and even Christmas trees. The exemption, running until February 15, 2025, is expected to provide significant savings at the checkout, particularly during the high-spending holiday season.

Deputy Prime Minister and Minister of Finance Chrystia Freeland acknowledged the strain of holiday expenses despite recent economic improvements. “With new tax relief on groceries and seasonal expenses and a rebate for working Canadians, we are reducing costs when they are highest for Canadians,” she said.

The shoppers I met at Vince’s Market in Sharon know how quickly grocery bills add up.

They’re about to get a break with our new GST/HST tax cut. pic.twitter.com/1HzXumSDVI

— Justin Trudeau (@JustinTrudeau) November 22, 2024

Working Canadians Rebate

In addition to the tax exemption, the government will introduce a Working Canadians Rebate, benefiting Canadians who worked in 2023 and earned up to $150,000. These individuals will receive a one-time $250 payment starting in spring 2025. This rebate is expected to reach 18.7 million Canadians.

The measures come as inflation has eased to 2%, and the Bank of Canada has implemented four interest rate cuts this year. However, many Canadians are still grappling with household budget pressures.

Relief at the Register

The GST/HST exemption applies to a wide array of everyday items, such as:

• Prepared foods: Salads, sandwiches, and vegetable trays.
• Restaurant meals: Dine-in, takeout, and delivery.
• Snacks: Chips, candy, and granola bars.
• Children’s essentials: Clothing, footwear, car seats, and diapers.
• Toys and entertainment: Board games, dolls, video game consoles, books, and puzzles.
• Holiday staples: Christmas trees.

The government is urging Parliament to pass the necessary legislation quickly, ensuring Canadians can start benefiting as soon as possible.

This announcement comes as families prepare for the holiday season, with many looking for ways to stretch their budgets amid rising costs. By making most foods and key holiday items tax-free and offering direct financial support, the government aims to make the season more affordable for all Canadians.