GST holiday comes into effect Saturday

To relieve Canadians’ wallets as the holiday season approaches, an exemption from the federal goods and services tax (GST) comes into effect this Saturday, until February 15.

As for the provinces which have harmonized provincial and federal sales taxes, they will see complete exemption from the HST.

The tax holiday will apply in particular to products commonly purchased during the holidays, for example children’s toys, prepared meals and Christmas trees.

Ottawa calculates that a person spending $2,000 on these exempt products will save between $100 and $260, depending on the province where they reside.

What to do in case of error?

This measure caused headaches for many merchants, who had to reprogram their payment terminals on short notice, in addition to taking inventory of their products which will be subject to a tax exemption.

In an interview with -, Jasmin Guénette, vice-president of national affairs at the Canadian Federation of Independent Business (CFIB), acknowledged that merchants could commit honest mistakes in the application of this measure.

If a customer notices a taxation error on his invoice, he can ask the merchant for a refund of the amount equivalent to the TPS on his purchases.

In the event of refusal, for example if the merchant has a different interpretation of the application of the law, Canadians will be able to submit a request for reimbursement to theARC via an online form, up to two years after purchase.

Furthermore, the measure is greeted with skepticism by Mr. Guénette, who indicates that only 4% of the members of the FCEI are of the opinion that this tax exemption will allow them to increase their turnover.

Martin Vézina, vice-president of public and government affairs at Restauration Québec, sees an opportunity for restaurateurs.

What we notice in the industry is that the average bill has not changed much, even though prices have increased. SO, [avec] a leave of absence TPSpeople will take that money back to spend it on another item on the menu, either a dessert, or a starter, or to go on the bottle of wine. […] It is certain that for us, it will still bring additional salesanticipates it.

Measure judged electoralist

The bill proposed by Justin Trudeau’s Liberals was adopted on November 29 in the House of Commons with 176 votes for and 151 votes against; the Conservatives and the Bloc opposed it. The New Democratic Party (NDP) for its part supported the measure, although it considers it insufficient, the party wishing to definitively exempt essential products from the TPS.

According to government estimates, the tax holiday could cost up to $1.6 billion. The Parliamentary Budget Officer, for his part, indicated that the exemption could cost the federal government up to $2.7 billion if Ottawa compensates all the provinces that collect the harmonized sales tax.

Five provinces, Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland and Ontario collect the HST.

Conservative leader Pierre Poilievre sharply criticized this liberal measure, which he called irresponsible, inflationary and electoralist fake Christmas gifts.

The Senate committee which examined the bill, for its part, wrote, in its observations, that it does not adequately meet the needs of Canadians who struggle to afford basic necessities, including food and shelter.

At the same time of presenting the leave of TPSJustin Trudeau also announced his intention to offer $250 checks to all workers who earned $150,000 or less in 2023.

But the measure has still not been adopted, the NPD demanding in particular that retired people be eligible for these checks (New window).

With information from The Canadian Press, Charlotte Dumoulin and Gabrielle Proulx