With the many expenses associated with the holiday season, the Government of Canada announced a GST/HST (goods and services tax/harmonized sales tax) holiday on many products for two months across the country. From December 14, 2024 to February 15, 2025, many foods, drinks, snacks, children’s clothing and items, gifts and restaurant meals will cost you less.
Also read: Here are all the grocery foods on which you do not have to pay taxes in Quebec
“Thanks to the tax holiday […]we are ensuring that you can get what you need and save for what you want to buy,” said Prime Minister Justin Trudeau during his announcement on November 21. It is therefore with the aim of giving a financial boost to the Canadian population that this measure was granted.
However, with a GST rate set at 5% in Quebec and limited application to certain foods, one may wonder what real impact this tax reduction will have on your budget. To see more clearly, Narcity Québec concretely compared the cost of a grocery store with and without GST, in order to evaluate the effect of this temporary measure.
What types of items are eligible for the GST/HST holiday holiday?
Here are the grocery items as well as all the products sold in Canada on which you will not have to pay GST for two months:
- Beers, wines and ciders with less than 7% alcohol;
- Foods prepared at the grocery store, such as sandwiches, salads and vegetable platters;
- Restaurant, dining room, take-out and delivery meals;
- Snacks, including chipscandies and granola bars;
- Children’s clothing and shoes, as well as diapers and car seats;
- Children’s toys, including video game consoles and board games;
- Christmas trees;
- Printed books and newspapers.
According to the government, this eight-week tax holiday will save families around $100 on $2,000 in expenses.
How much does a grocery store cost including only eligible products with and without GST?
Grocery invoice made to Maxi on December 1, 2024.
Ariane Fortin | Narcity
While the holiday season is often synonymous with parties with loved ones, there is a chance that you will have to purchase many products that appear on the list of items eligible for the tax holiday, particularly when it comes to drinks. This was precisely the case for me for a reception given on December 1, 2024. The shopping was done on that date at the Maxi in Sainte-Agathe-des-Monts.
Soft drinks, sparkling water, beers, ready-to-drinks and dog food (he must eat well too) went to the checkout. If the subtotal of the invoice amounts to $118.16, the 5% GST was applied only to the sum of $110.96, because it does not apply to the deposit. So, the GST amount in this case is $5.55. With Quebec sales tax of $11.07, the total is $134.78.
If we take the same invoice, but do the calculation with the GST holiday, we must first subtract the dog food, because pet food is not eligible. The federal tax would apply to an amount of $91.47, which represents a saving of only $4.57. So I would have to pay $130.21 in total.
Ultimately, the GST holiday announced by the Government of Canada does not seem to offer major savings to the Quebec population at least. Indeed, if the applicable GST/HST rate is 5% in Quebec, Alberta, British Columbia, Manitoba, Nunavut, the Northwest Territories, Saskatchewan and the Yukon, it is 13% in Ontario and 15% in Prince Edward Island, New Brunswick, Nova Scotia and Newfoundland and Labrador.
The Quebec government has also confirmed that it will not harmonize the QST system with the temporary GST holiday, which means that you will be charged the provincial tax of 9.975%.
This is without taking into account that most of the products which are already zero-rated in Quebec and Canada, namely basic foods such as fruits and vegetables, eggs, baked goods, meat, etc., are among those which have suffered a greater increase in the last year. Since the GST holiday does not apply to these products, the impact of inflation in your portfolio is likely to be the same, despite Ottawa’s new measure.
