GST Relief in Canada: What You Need to Know About the Federal Tax Break Starting December 14, 2024

Temporary GST/HST relief is on the verge, the government of Canada is providing a timely relief measure to help ease the financial strain put on by the increasing cost of living. The federal government will waive the Goods and Services Tax (GST), as well as the Harmonized Sales Tax (HST) in some provinces, on several items starting December 14, 2024, until February 15, 2025. This temporary break will give Canadians some much-needed relief as they prepare for the holiday season and beyond.

Source: The Canadian Press and Canada Revenue Agency (CRA)

What is the GST/HST Relief?

To help Canadians who are facing high household expenses, the federal government will, on a temporary basis, waive the 5% GST on certain goods and services. For provinces with HST—which is a combination of federal and provincial sales tax—the full HST will be waived. This measure is aimed at easing the burden on families and individuals, especially on items that are purchased quite often during the holiday season.

Eligible Products: What You Will Save On

GST/HST relief applies to a wide variety of products, from food items to children’s toys. The following is a list of items that will be eligible for the tax break:

Prepared Foods: Vegetable trays, pre-made meals, sandwiches, and salads.
Restaurant Meals: Dine-in, takeout, or delivery meals from restaurants.
Snacks: Chips, candy, granola bars, and other similar snacks.
Alcohol: Beer, wine, cider, and pre-mixed alcoholic beverages under 7% alcohol by volume (ABV).
Children’s Clothing and Footwear: Clothing, footwear, car seats, and diapers for children.
Children’s Toys: Board games, dolls, puzzles, and video game consoles.
Books and Newspapers: Certain books and newspapers.
Christmas Trees: Both natural and artificial Christmas trees.

Items That Will Not Qualify For the GST Relief in the Temporary Tax Break in Canada

While most essentials are included in the list of relief items, several items are excluded. These include:

Vending Machine Food: Items purchased from vending machines.
Edible Cannabis Products: Cannabis edibles or drinks.
Dietary Supplements: Products like vitamins and minerals.
Clothing for Specific Activities: Wetsuits, soccer cleats, skates, tap shoes, etc.
Jewelry: Jewelry, including children’s jewelry.
Adult Clothing for Children: Any adult-sized clothing purchased for children.
Collectibles and Adult Toys: Items like collectible dolls, hockey cards, and adult-oriented toys.
Diapers from Diaper Services: Diapers bought from a diaper service or for adult use.

Effects on the Provinces Using HST

In provinces that use the Harmonized Sales Tax (HST) such as Ontario, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, and New Brunswick, the entire HST will be waived, not just the federal portion. This means consumers in these provinces will see a more significant reduction in the cost of qualifying goods because they won’t pay either the federal GST or the provincial sales tax component of the HST.

How Will the Relief Be Applied?

The GST/HST relief will be automatically applied at checkout for all eligible goods. This applies to both in-store and online purchases. Consumers will not be required to do anything to claim this relief, as retailers will ensure the tax break is applied when they check out.

If you purchase an eligible item online, as long as the item is paid for in full between December 14, 2024, and February 15, 2025, and it is delivered or made available during this period, it will also be eligible for the tax break. The Canada Revenue Agency (CRA) considers an item “delivered” once it is handed over to a shipping, courier, or postal service.

What About Imported Goods?

This relief will also be extended to imported goods that qualify as eligible products. As long as the good falls within one of the approved categories (e.g., food, children’s clothing, or books) and the good is purchased during the relevant period, no GST/HST will be payable on imported goods.

Food Delivery and Takeout

If you order a prepared meal from a restaurant via a delivery service, the meal itself will qualify for the GST/HST relief. However, the delivery fee charged by the platform or courier service will not be eligible for the relief.

If a restaurant charges a customer directly to deliver a meal, the entire transaction—including any delivery charge—will qualify for the relief, provided it otherwise meets the criteria.

What About Tips and Gratuities?

A mandatory tip or gratuity added to a restaurant bill will qualify for the GST/HST relief. However, voluntary tips (given freely by a customer to a server) are not subject to GST/HST and therefore are not eligible for the relief.

What if I Buy a Qualifying Item Before the Relief Period?

Some retailers, such as Toys “R” Us Canada, will refund the GST/HST that was paid on items bought before the relief period began. However, retailers are not obligated to offer refunds, and doing so is at their discretion.

Summary

GST/HST relief will be available for specified products purchased between December 14, 2024, and February 15, 2025.
The relief includes prepared meals, restaurant meals, children’s clothing and toys, books, alcoholic beverages under 7% ABV, and Christmas trees.
For HST-paying provinces, the full HST will be waived on eligible items.
Restaurant food deliveries are allowed, but the delivery charge is not relieved.
The relief is automated at checkout, and no action from the consumer is required.
Imported goods are also included if they meet the criteria.
Retailers may reimburse all or part of the GST/HST paid before the effective date of the relief, but this is not mandatory.

This GST/HST tax relief has been implemented to ease the financial burden on Canadians during an expensive time of year. It’s important to stay informed about which products qualify and make sure to take advantage of this relief during the eligible period.