What the upcoming holiday GST relief will mean for consumers

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This article was published 09/12/2024 (663 days ago), so information in it may no longer be current.

TORONTO – The federal government’s GST break will arrive this Saturday, just in time for the last stretch of holiday shopping.

Here’s a breakdown of what you’ll save on and how the relief works.

What is the tax relief?

In a bid to help Canadians deal with household costs amid the high cost of living, the federal government decided to waive the federal goods and services tax (GST), which is five per cent, on some products between Dec. 14 and Feb. 15. For provinces with harmonized provincial and federal sales tax (HST), the full HST will be waived.

What products will see the GST waived?

The tax break will apply to:

—prepared foods, including vegetable trays, pre-made meals and salads and sandwiches

—restaurant meals, whether dine-in, takeout or delivery

—some snacks, including chips, candy and granola bars

—beer, wine and cider, as well as pre-mixed alcoholic beverages below seven per cent alcohol by volume (ABV)

—children’s clothing and footwear, car seats and diapers

—some children’s toys, such as board games, dolls, puzzles and video game consoles.

—some books and newspapers

—Christmas trees

What items don’t count?

Even product categories eligible for GST relief have plenty of exemptions.

Beverages and food sold from vending machines, edible cannabis products or pot drinks and dietary supplements aren’t eligible for GST relief.

Magazines, electronic publications, clothing for sports activities like wet suits, soccer cleats, skates and tap shoes, along with costumes, jewelry and adult clothing and footwear purchased for children aren’t eligible.

Diapers purchased from a diaper service or for adults, collectibles that are not intended for play or learning, such as hockey cards or collectible dolls, and toys and model sets that are marketed for adults like some adult Lego or train sets also don’t make the cut.

What if my province charges HST?

Ontario and the Atlantic provinces have united the provincial and federal sales taxes together into a harmonized sales tax. In these provinces, the entire HST would be removed from qualifying items.

How do I get the tax break on qualifying items?

The tax break is designed to be automatically applied to totals at checkout by retailers when customers make qualifying purchases.

What if I buy one of these items but it has to be delivered?

The federal government says no GST/HST will be charged on a qualifying item, as long as it is paid for in full between Dec. 14 and Feb. 15 and delivered or made available to the buyer during the same period.

The Retail Council of Canada says the Canada Revenue Agency will consider items “delivered” once they are handed over to a shipping, courier or postal service.

What if the item is imported?

GST/HST won’t be charged on imported goods as long as they meet the product categories and criteria that qualify for relief.

What about food deliveries?

When a prepared meal is ordered through a delivery platform, the food provided to the customer qualifies for GST/HST relief during the eligible period.

However, the delivery service fee charged by the platform to the customer does not qualify for GST/HST relief.

When a restaurant bills a customer directly for delivery of a prepared meal, the courier service qualifies for GST relief.

Will I pay GST/HST on cocktails and mixed beverages?

Mixed drinks that include only eligible ingredients such as beer, malt liquor, or wine qualify for GST/HST relief. For example, the government says a mimosa made of sparkling wine and orange juice, or a michelada made of beer and non-alcoholic ingredients would qualify.

However, mixed drinks that include an alcoholic beverage like a spirit or liqueur which did not make the GST/HST relief list would not have the tax waived. This means a sangria that includes both wine and rum, or a mixed drink such as a vodka and soda, would not qualify.

Do I save the GST/HST on tips when I dine out?

A mandatory tip or gratuity included as part of the bill qualifies for GST/HST relief. The exemption does not apply to a tip or gratuity that is given freely by a customer to an employee of an eating establishment, as such tips are normally not subject to GST or HST charges.

What if I bought one of these items before the tax relief kicked in?

Some retailers, like Toys “R” Us Canada, are advertising that they will return the tax paid to customers who bought items before the GST/HST relief period began.

But retailers aren’t obliged to offer this gesture of goodwill.

“A business can choose not to refund or credit the customer the GST/HST that was previously paid,” Canada Revenue Agency spokesperson Benoit Sabourin said in an email to The Canadian Press.

This report by The Canadian Press was first published Dec. 9, 2024.

Note to readers: This story has been clarified. A previous version may have left the impression that tips given freely are generally subject to GST/HST.