Canada’s sales tax break is now law — what is it and what will it do? 

Written by Max Balzer, 12/15/2024

It’s the most wonderful time of the year and to deal with the continually high prices coming out of the pandemic, Canada has implemented exemptions on GST/HST (known as HST or Harmonized Sales Tax in Ontario) through February 15.

Bill C-78, the Tax Break for All Canadians Act received Royal Assent after passing the House of Commons and the Senate, meaning that most grocery and holiday essentials will be tax-free for the next two months.

On food, most grocery items will be tax-free for the next two months — if they’re not already exempted. Most food essentials are already tax-free, but this break will mostly close it out. Included are any prepared foods like sandwiches, and snacks like chips, candy, and baked goods. 

Most alcoholic beverages and non-alcoholic drinks like coffee, tea and energy drinks will be exempt too. Generally any food or drinks served in restaurants will also qualify for the HST break, but if you get it delivered through a service like Uber Eats and DoorDash, they’ll still charge HST on the delivery of it. 

Aside from food and drink, children’s goods will also largely qualify for tax relief. Clothes, shoes, toys, diapers and car seats will mostly be exempt from HST until February, plus game consoles, physical books and printed newspapers. Nothing digital, though! Lastly, Christmas trees, artificial trees and Hanukkah trees and bushes will also be tax-free this holiday season.

The Canadian government hopes this HST break will provide some much-needed relief to Canadians feeling the impacts of high prices this holiday season. Deputy Prime Minister and Minister of Finance Chrystia Freeland remarked that “making essentially all food and many holiday essentials tax-free will leave Canadians with a little more money in their pockets—helping offset the cost of the things they need to celebrate the season with family and friends.” 

Canadians spent an average of $1350 per month just on food last year, and over two months, they could see several hundred dollars back in their pockets thanks to the tax relief. The Canadian government hopes “the measure will put between $100 and $300 more in workers’ pockets on a basket of $2,000 in purchases over the next two months.”

The Canadian government’s GST/HST break will give a much-needed break to Canadians feeling the brunt of post-pandemic prices this holiday season — on everything from food to toys and newspapers.