Canada’s temporary “tax holiday” is expected to kick off tomorrow, whether businesses are ready or not.
Driving the news: The federal government will waive the federal goods and services tax (GST), which is 5%, on some products until February 15. In Ontario and the Atlantic provinces, which have harmonized provincial and federal sales tax (HST), the full HST will be waived.
- The tax break will apply to prepared food, restaurant meals, some snacks, beer, wine and hard cider, children’s clothing, some toys, some books and newspapers, and Christmas trees.
Why it matters: If you’re unclear on which items are affected and which aren’t, think of the businesses tasked with implementing the change. Business owners who spoke to Global News said despite the plan’s good intentions, it has become an expensive “IT nightmare.”
- Higher-income households, which spend more on discretionary items, stand to gain the most from the tax holiday, as many essential grocery items are already tax-free.
Big picture: The federal government is forgoing about $1.5 billion in federal revenue to save the average household between $100 and $200 this holiday season. It’s still $4.7 billion less than was proposed in a plan involving working Canadians also getting a $250 cheque.—SB