Federal government plans to give $250 to millions, cut GST

Prime Minister Justin Trudeau says his government plans to temporarily lift the federal sales tax off a slew of items just in time for Christmas and send cheques to millions of Canadians this spring.

Trudeau announced the proposed affordability measures in Toronto alongside Finance Minister Chrystia Freeland this morning, ahead of the government’s fall economic statement.

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In order to get the measures passed through Parliament, the Liberals will need the support of an opposition party — and the NDP appears poised to do just that, taking credit for forcing the government to adopt its idea.

The GST break, which would begin Dec. 14 and end Feb. 15, applies to a number of items including toys, diapers, restaurant meals and beer and wine.

Canadians who worked in 2023 and earned up to $150,000 would also receive a $250 cheque in the spring.

About 18.7 million people will receive the cheques, costing the government about $4.7 billion, while the GST break is expected to cost another $1.6 billion.

The measures come as an inflation-driven affordability crunch has left voters unhappy with the Liberal government.

Last week, the NDP promised it would issue a permanent GST break for essential items if it wins the next election, and on Wednesday Jagmeet Singh said in a statement that his party won a “tax holiday” for Canadians

“The Prime Minister’s Office just informed us that he’s caving to our Tax-Free-Essentials campaign — partly,” Singh said in the statement.

Singh’s proposal would permanently remove the GST from essentials including diapers, prepared meals, cellphone and internet bills. That was expected to cost $5 billion, but he was also urging provincial governments to match the plan with cuts to provincial sales taxes.

The changes proposed by the Liberals will be part of the annual fall economic statement, which will need to pass through Parliament in order to take effect.

The House of Commons has been embroiled in a stalemate for nearly two months as the Conservatives filibuster a motion demanding the government release unredacted documents related to misspending at a green tech fund.

That means no legislation has been debated or voted on for more than eight weeks, because matters of privilege take precedence over all other House business.

The NDP says it will not end the privilege debate. Instead, a spokesperson for the party says it will use a procedural measure to adjourn that debate for one day at a time to allow the tax measures to pass.

From Saskatchewan

Though the measures are coming from a government that it has butted heads with before, the Government of Saskatchewan welcomed the federal affordability measures announced Thursday.

Tim McLeod, the new Government House Leader, said affordability measures are a good thing, regardless of which government is introducing them. He also took the opportunity to talk about the measures his government plans to introduce.

“We have very clearly set out what affordability measures our government is going to pursue, we’ve received a mandate from the people of Saskatchewan to do that and we’re going to do exactly what we said we were,” said McLeod.

He also took a small jab at the federal government, saying he’s happy the new federal measures will be applied equally, making reference to the carve-outs to the carbon tax last year which were only applied to those who used home heating oil.

Sask NDP Leader Carla Beck also talked about the federal measures as a good thing, particularly as she said people in Saskatchewan are struggling heading into the holidays.

“We support measures that are going to cut costs for Saskatchewan people. There are levers that are available at the federal level, but there are levers that are available here to the provincial government,” said Beck.

She said the provincial government could give a rebate on gas tax or take the PST off of groceries and kids’ clothing to give people relief right away – two measures her party campaigned on in the provincial election.

“We will continue to push on all measures that are going to deliver that relief for Saskatchewan people,” said Beck.

This report by The Canadian Press was first published Nov. 21, 2024.

The Canadian Press