Starting next month, Canadians could get a temporary “tax holiday” on dozens of items as a Liberal bill inches closer to becoming law.
Bill C-78, titled the “Tax Break for All Canadians Act,” passed in the House of Commons Thursday night, with the help of support from the New Democratic Party.
It will now be considered by the Senate and if passed there, will go on to receive royal assent.
A two-month break on the goods and services tax or harmonized sales tax will apply on certain groceries, alcoholic beverages and children’s clothing, among other items.
This change would take effect on Dec. 14 and end on Feb. 15, 2025.
The federal government says the measure is meant to provide relief to Canadians as the cost of living remains high and save taxpayers an estimated $1.6 billion over two months.
A family spending $2,000 on qualifying goods would realize GST savings of $100 over that period, according to the Department of Finance.
Here’s a list of all the items that the tax break will and will not cover.
Under Canadian tax law, items classified as basic groceries are already not subject to the GST/HST.
According to the federal legislation, that includes “fresh, frozen, canned and vacuum sealed fruits and vegetables, breakfast cereals, most milk products, fresh meat, poultry and fish, eggs and coffee beans.”
The following food and beverage items are included in the “GST holiday.”
- Restaurant meals, whether dine-in, takeout, or delivery (including meals at cafés, pubs, food trucks, and other food and beverage establishments)
- Prepared foods including sandwiches, salads, vegetable or cheese platters, and pre-made meals
- Snacks including chips, candy, baked goods, fruit-based snacks, and granola bars
- Non-alcoholic drinks, such as coffee, tea, carbonated drinks, juices, and smoothies
- Beer and malt beverages
- Wine, cider and sake (including fortified) that are 22.9 per cent alcohol by volume (ABV) or less
- Spirit coolers and premixed alcoholic beverages that are seven per cent ABV or less
- Catered meals, including the catering fee for providing, preparing, or serving qualified food and beverages
However, these items will not get a tax break:
- Food or beverages sold from a vending machine
- Alcoholic beverages (other than beer, malt beverages, wine, cider, and sake) with more than seven per cent ABV
- Dietary supplements
- Other items that do not qualify as food or beverages for human consumption (for example, pet food)
Parents could see some tax relief with the following kid’s items covered by the “GST holiday:”
- Baby clothes, including bibs, bunting blankets, and receiving blankets
- Children’s clothes up to girls’ size 16 and boys’ size 20 (or in sizes XS, S, M, or L if there is no Canada Standard Size listed)
- Babies’ and children’s socks, hats, ties, scarves, belts, suspenders, gloves, and mittens
- Babies’ footwear
- Children’s footwear with an insole length of 24.25 cm or less
- Sports clothing and dancewear such as jerseys, ski jackets, leotards, unitards, bodysuits, and dual-purpose swimwear that can reasonably be worn outside of sports or dance activities
However, these items are not covered:
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- Specialized clothing and footwear designed exclusively for sports or recreational activities (for example: wetsuits, soccer cleats, bowling shoes, skates, ski boots, tap shoes, pointe shoes)
- Adult clothing and footwear, even if it’s purchased for a child
- Costumes and make-up
- Jewellery
The two-month tax break will apply to diapers for children and babies, including:
- Cloth or disposable diapers
- Diaper inserts or liners
- Training pants
- Rubber pants designed for use with any of the above items
Children’s diapers that are provided as part of a diaper service and adult diapers are excluded.
Kid’s car seats, including restraint systems or booster cushions that conform to the Canada Motor Vehicle Safety Standards qualify for the tax break.
However, travel systems, which are a combination of stroller, carrier and car seat sold as a single package, don’t qualify.
The following toys for children under the age of 14 years are eligible for a tax break:
- Games, including:
- Board games with physical components and rules, including replacement parts and add-on components such as dice
- Card games, including playing cards and Pokémon cards
- Toys, toy sets and toy systems that either:
- Imitate another item, whether real or imaginary
- Involve building, creating or assembling structures, objects or models by using pieces, parts, materials or modelling compound
- Involve sorting, stacking or organizing pieces, parts or materials
- Dolls, plush toys and soft toys and their accessories
- Jigsaw puzzles for all ages
These items are not eligible:
- 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)
The following are included:
- 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 are not included:
- Downloadable or online-only games
- Other gaming accessories, such as chairs and headsets
These books are included:
- 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 five per cent 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 per cent 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
The following are not included:
- E-books
- Downloadable audio books and e-audio books
- Magazines and periodicals that are not purchased by subscription or that have more than five per cent 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
Printed newspapers are eligible for the tax break, including those:
- Containing news, editorials, feature stories, or other information of interest to the general public
- Published at regular intervals (usually daily, weekly or monthly)
These items are not eligible:
- Electronic and digital publications
- Flyers
- Inserts
- Magazines
- Periodicals
- Shoppers
Christmas trees and similar decorative trees – both natural and artificial – are covered by the “tax holiday.”
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