New GST Tax Break Canada-Wide Effective December 14

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Last Updated On 13 December 2024, 9:37 PM EST (Toronto Time)

New GST Tax Break Canada: Starting this Saturday, December 14, 2024, Canadians will enjoy a temporary Goods and Services Tax (GST) and Harmonized Sales Tax (HST) break on select essential goods.

This two-month tax holiday, introduced under Bill C-78, is part of the Liberal government’s effort to provide financial relief during the winter months.

The tax exemption will remain in effect until February 15, 2025, and here’s everything you need to know about this initiative.

The GST/HST holiday is a temporary tax exemption aimed at reducing the financial burden on Canadians by eliminating GST/HST charges on specific goods and services.

Bill C-78, the legislation enabling this tax break, was approved by the Senate and received royal assent on December 12, 2024.

This measure covers a wide range of essential goods, from prepared meals to children’s clothing, providing a much-needed financial respite for households across the country.

To qualify for the GST/HST exemption during the eligible period, certain conditions must be met:

Payment in Full:

The item must be fully paid for between December 14, 2024, and February 15, 2025.
Partial payments made before December 14, 2024, are eligible if the remaining balance is paid in full during the tax break period.

Delivery Requirement:

The item must be delivered or made available to the buyer within the tax holiday period.
For shipped items, delivery is considered complete when the item is handed over to a courier or common carrier.

Imported Goods:

Imported goods also qualify for the tax relief, provided they meet the above conditions

The tax break applies to a range of goods and services, with detailed guidelines provided for each category:

1. Food and Beverages

Eligible Items:

Prepared foods: sandwiches, salads, cheese platters, pre-made meals.
Snacks: chips, candy, baked goods, granola bars.
Beverages: coffee, tea, juices, carbonated drinks, smoothies.
Alcoholic beverages: beer, cider, wine, and premixed drinks with alcohol content under 22.9% ABV.

Ineligible Items:

Dietary supplements, cannabis-infused food or drinks, beverages sold from vending machines.
- Examples of dietary supplements include:
  - Vitamins and minerals, such as multivitamin products
  - Protein isolate powder
  - Energy shots or wellness shots
  - Detox and cleanse products
  - Fibre mixes and supplements
  - Herbal supplements
High-alcohol spirits, liqueurs, and cocktails containing non-eligible ingredients.

2. Children’s Clothing and Footwear

Eligible Items:

Baby clothes, bibs, and blankets.
Children’s clothing sizes XS to L, including socks, hats, scarves, and gloves.
Footwear with an insole length of 24.25 cm or less.

Ineligible Items:

Specialized sportswear, costumes, jewelry, and adult clothing.

3. Children’s Diapers

Eligible Items:

Cloth or disposable diapers, diaper inserts, training pants, rubber pants.

Ineligible Items:

Adult diapers, incontinence products, and diapers provided as part of a service.

4. Children’s Car Seats

Eligible Items:

Car seats and booster seats meeting Canada Motor Vehicle Safety Standards.

Ineligible Items:

Car seats that do not meet safety standards and travel systems.

5. Children’s Toys

Eligible Items:

Board games, card games, and traditional toys.
Art supplies marketed as toys.

Ineligible Items:

Games and toys that don’t meet the requirements above
Collectibles that are not intended for play or learning, such as hockey cards or collectible dolls
Toys and model sets that are marketed for adults (for example, adult Lego or train sets)

6. Video game consoles, controllers, and physical video games

These items qualify as video game consoles, controllers, and games:

Game consoles designed primarily for playing video games
Controllers designed primarily for playing video games on a qualifying video game console
Physical video games, in a tangible format designed for the read-only storage of information in digital format, that contains a video game designed for use with a qualifying video game console (for example, game cartridges)

These items would not qualify:

Downloadable or online-only games
Other gaming accessories, such as chairs and headsets

7. Physical books

These items qualify as physical books:

Most published, printed books (hardcover or softcover)
Updates of printed books
Guide books, and atlases that do not mostly contain street or road maps
Magazines and periodicals (that have no more than 5% of their printed space devoted to advertising) supplied by subscription, if all the consideration is paid during the relief period and only for those magazines or periodicals that are delivered during the relief period
Physical audio recordings of printed books, if 90% or more of the recording is a spoken reading of a printed book, including abridged versions (for example, a cassette, compact disc, or reel-to-reel tape version of a published book)
Physical recordings of a performance of a published play
Bound or unbound printed versions of scripture of any religion, such as the Quran, the Bible, prayer books, missals, hymn books, and Torah scrolls
Illustrated versions of religious scriptures (for example, comic book versions)
Printed books that are wrapped or packaged for sale as a single item with a physical read-only medium that is made up of either a reproduction of the printed book or material that makes specific reference to the printed book

These items would not qualify:

E-books
Downloadable audio books and e-audio books
Magazines and periodicals that are not purchased by subscription or that have more than 5% of their printed space devoted to advertising
Books designed primarily for writing on, such as address books, diaries, journals, and notebooks
Colouring books, scrapbooks, sticker books, sketchbooks and albums for photographs, stamps or coins
Brochures, pamphlets, catalogues and advertising material
Warranty booklets and owner’s manuals
Agendas and calendars
Certain directories and collections of street or road maps
Cut-out and press-out books
Collections of patterns, stencils, or blueprints
Programs for events or performances
Rate books
Recordings of performances of musical scores
Recordings of unpublished manuscripts
CD-ROMs, DVDs, and Blu-ray discs with textual or visual information

8. Printed newspapers

A qualifying newspaper is a printed newspaper that:

Contains news, editorials, feature stories, or other information of interest to the general public
Is published at regular intervals (usually daily, weekly or monthly)

These items would not qualify:

Electronic and digital publications
Flyers
Inserts
Magazines
Periodicals
Shoppers

9. Christmas and similar decorative trees

Christmas trees and similar decorative trees qualify, including:

Natural trees
Artificial trees
Hanukkah trees or bushes

These items do not qualify:

Decorations for a Christmas tree or other decorative tree
Holiday related decorations that are not in the physical form of a tree (for example, Christmas tree themed decorations for a wall)
Poinsettia plants
Mistletoe
Wreaths

Restaurants, food trucks, and other eating establishments will also participate in the GST/HST holiday.

Key Points:

Prepared meals and eligible beverages are tax-free during the period.
Mandatory tips included in the bill are also GST/HST-exempt.
Delivery services billed directly by restaurants qualify for the tax relief, but third-party delivery platform fees do not.

Examples:

A burger and soda ordered from a restaurant qualify for the tax break.
Cocktails containing only eligible ingredients (e.g., beer and juice) qualify, but cocktails mixed with spirits or liqueurs do not.

Retailers

Retailers are required to update their systems to ensure GST/HST is not charged on eligible items during the specified period.
Items purchased in bulk or as part of a supply chain transaction (e.g., manufacturer to retailer) also qualify.

Consumers

Shoppers will benefit from reduced costs on essential goods.
Receipts must clearly reflect the GST/HST exemption.

The GST/HST holiday is a welcome financial relief for Canadians during the winter months, offering savings on essential goods and meals.

From children’s clothing to prepared meals and beverages, this temporary measure is expected to alleviate some of the financial pressures on households.

Make sure to plan your purchases and take advantage of this tax break while it lasts from December 14, 2024, to February 15, 2025.

1. Can I get a refund if I pay GST/HST on an eligible item during the tax holiday?

Yes, you can request a refund from the seller if GST/HST was mistakenly charged.

2. Do imported goods automatically qualify for the tax break?

Imported goods qualify if all other conditions (payment in full, delivery) are met.

3. What happens if an item is partially paid for during the tax break period?

The item qualifies only if the remaining balance is paid in full before February 15, 2025.

4. Are services included in the GST/HST holiday?

No, the tax break applies only to goods, not services like event hosting or chef fees.

5. How do I know if a mixed drink qualifies for the tax break?

Mixed drinks qualify if they include only eligible beverages (e.g., beer and juice) and exclude spirits or liqueurs.

Gagandeep Kaur Sekhon

Gagandeep Kaur Sekhon moved to Canada in 2010 on a study visa. She navigated through the ups and downs of her student life and gained her permanent residency in 2015. Today, she is a proud Canadian citizen residing in Calgary, Alberta. She is mother of 2 beautiful daughters and making her difference through writing and guidance at INC – Immigration News Canada.