Trudeau announces ‘working Canadians’ $250 rebate, 2 month GST tax break

Prime Minister Justin Trudeau announced Thursday morning a temporary HST/GST tax break on essential items, and a new $250 rebate for working Canadians.

Trudeau spoke at a press conference held in Newmarket, Ont. along with Finance Minister Chrystia Freeland measures to help families “buy the things they need and save for the things they want” ahead of the holiday season.

Legislation will be introduced at parliament that would provide a two-month Goods and Services Tax/Harmonized Sales Tax (GST/HST) break for groceries and holiday essentials.

The proposed tax break will run from Dec. 14, 2024 to Feb. 15, 2025.

In addition to the tax break, a tax-free Working Canadians Rebate of $250 will be available for all Canadians who worked in 2023, earned up to $150,000 individual net income and filed a 2023 tax return by Dec. 31 2024.

More requirements for the rebate can be found here.

NDP leader Jagmeet Singh said in a statement Wednesday afternoon that the announcement is in response to the party’s demands to permanently lift the goods and services tax on a range of expenses.

The NDP previously demanded tax relief to include grocery store items, such as pre-prepared meals, diapers and clothing for children under 15 years old.

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Singh said the NDP would vote in favour of this new measure to give Canadians relief.

He also called on Premiers Wednesday to get rid of the provincial sales tax on daily essentials and monthly bills.

The Government of Canada says the GST break will provide an estimated $1.6 billion in federal tax relief, based around an average family spending of $2,000 on qualifying goods.

The Globe and Mail reports that the GST break announcement is part of a multi-billion dollar package of affordability measure.

What items will be affected by the tax break

The list of qualifying goods that will be affected by the tax break can be found here, including a variety of foods, clothes, print materials, children’s toys and Christmas or similarly decorative trees.

Five provinces including Ontario have a Harmonized Sales tax which is the GST combined with a provincial tax.

For example, in Ontario a $100 purchase would incur a $13 tax on top of that – the 13 per cent from HST is a combination of the five per cent GST and eight per cent sales tax – to a grand total of $113.

Alberta, Yukon, the Northwest Territories,  and Nunavut only have the federal GST applied.

Ottawa says the tax break will “make a meaningful difference for Canadians by making essentially all food GST/HST free, providing real relief at the cash register.”

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