After two months, Canada’s federal tax holiday ends Saturday

After two months, Canada's federal tax holiday ends on Saturday. Industry groups, however, are divided on whether or not the move was a success.

Canada’s federal tax holiday on GST and HST comes to an end of Saturday and industry groups are divided on whether or not the policy was a success.

The federal tax holiday began on Dec. 14, aimed at giving Canadians some reprieve from the high cost of living.

While basic groceries like fresh fruits and vegetables, most milk products, fresh meat, poultry and eggs already had no GST/HST before the tax break, prepared foods like sandwiches, salad and pre-made meals, as well as snacks like chips, candy and baked goods saw the GST/HST dropped during this period.

In addition to food, a whole range of items from clothing, footwear and children’s toys to books and drinks were included.

The Royal Bank of Canada’s consumer spending data indicated that Canadians were reluctant to spend money in January after strong holiday spending in December.

“January marked a sluggish start to consumer spending in 2025, but it was largely expected after spending surged at end of the 2024 holiday shopping season. Retail sector sales excluding autos pulled back in January both before and after adjusting for inflation,” RBC economist Carrie Freestone said in the bank’s Consumer Spending Tracker report Friday.

Industry groups are divided on the success of the measure.

Restaurants Canada called on Ottawa to make the tax holiday permanent. The group said it expects a $1.5-billion boost in food service sales over the 60-day period than if there were no tax holiday.