Canada announces a temporary GST holiday

Updated: December 3, 2024

The federal government is providing temporary goods and services tax/harmonized sales tax (GST/HST) relief on groceries and other holiday goods. This relief, which was included in Bill C-78, was enacted on November 28, 2024. Canadian businesses will be required to remove the GST/HST on a variety of qualifying products starting December 14, 2024 until February 15, 2025. For HST provinces (Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick, and Prince Edward Island) the relief will provide even further savings.

Given the implementation date is in just a few weeks, businesses need to work quickly to update their systems to recognize the changes on December 14. These updates include identifying relevant products and updating their tax tables and systems.  Businesses with large numbers of qualifying goods need to begin work shortly to meet the implementation date.

What’s included? 

The relief would apply to goods delivered to purchasers and/or imported and paid for during the relief period. Qualifying goods include (subject to some exceptions):

• Prepared foods, including vegetable trays, pre-made meals and salads, and sandwiches

• Restaurant meals, whether dine-in, takeout, or delivery

• Snacks, including chips, candy, and granola bars

• Beer, wine, cider, and pre-mixed alcoholic beverages below 7% ABV

• Children’s clothing and footwear, car seats, and diapers

• Children’s toys, such as board games, dolls, and video game consoles

• Books, print newspapers, and puzzles for all ages

• Christmas trees

How will the GST/HST relief affect your business? 

Businesses that sell qualifying goods should ensure they fully understand how the relief applies, especially since there are specific exceptions within the list of qualifying goods and short implementation dates with mid-month start and end periods. 

Given that the relief will apply to products and goods that are purchased in person, delivered, and imported, organizations at the national and international level will be impacted by the proposed relief. 

Administratively, businesses will need to update or implement temporary amendments to their point-of-sale systems and their e-commerce platforms to ensure that GST/HST is only temporarily removed on these qualifying goods during the relief period.  

While the relief measures are intended to help individual Canadians, this could place a burden on businesses to implement this temporary measure on short notice. Provincial governments (British Columbia, Saskatchewan, and Manitoba) haven’t yet indicated whether they will implement similar temporary measures for provincial sales tax purposes. Being well prepared ahead of the implementation date is essential for a smooth transition and to ensure your business will be adhering to the proposed legislative requirements. 

We understand that interpreting and applying these relief measures may be overwhelming—our sales tax specialists are here to help provide the necessary support and advice to businesses affected by the temporary relief measures.

Working Canadians Rebate

In addition to the GST/HST relief on qualifying goods, eligible Canadians will also receive a new Working Canadians Rebate. Canadians who worked in 2023 and earned up to $150,000 will receive $250 in early 2025. 

Have questions? Let’s talk. Contact your local advisor or reach out to us here.