The GST/HST holiday begins Saturday

This Saturday marks the beginning of the Liberal government's two-month GST/HST holiday that it says will give Canadians a break on the cost of some essential goods.

Bill C-78, the legislation implementing the tax break, passed its third and final vote in the Senate and received royal assent on Thursday.

In order for an item to be sold tax-free between December 14, 2024 and February 15, 2025, it must be paid for in full and delivered by the end of the tax break period.

The federal government says that items will be considered delivered once they are transferred from a supplier to a shipping service, or when they are put in the mail, rather than when they arrive at their destination.

Shoppers do not need to do anything to get the tax break; there is no claims process. The GST or HST will be simply not be charged at the time of purchase.

The tax holiday is taking place throughout the supply chain, so goods supplied to a wholesaler by a manufacturer, wholesaler or retailer will also not be taxed.

In provinces that have merged their provincial sales tax with the GST to create an harmonized sales tax (HST), the entire harmonized tax will be removed at the time of purchase.

Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island have harmonized sales taxes. 

The parliamentary budget officer says the tax break will cost the federal government $1.46 billion, and will cost the provinces with HST $1.26 billion — but all of that could end up on the federal government's books if the provinces decide not to waive compensation for the federal government's measure.

The list of items exempt from the tax break is long. Christmas trees qualify but Christmas decorations do not. Imported goods are also exempt from the GST/HST providing they're on the list of items that qualify for the tax holiday

Here's a list of items getting a tax break:

Specialized items of clothing — including wetsuits, soccer cleats, bowling shoes, skates, ski boots and tap shoes — do not qualify.

Collectibles — including hockey cards, dolls or other toys marketed to adults — do not qualify.

E-books and downloadable audio books do not qualify. Neither do books to write in, such as diaries, notebooks and agendas, and electronic and digital publications.