Legislation to create a two-month-long GST holiday is expected to pass on Thursday.
The bill was introduced on behalf of Finance Minister Chrystia Freeland in the House of Commons on Wednesday afternoon, with the help of the NDP to at least temporarily stop debate on a Conservative filibuster.
The NDP only agreed to support the bill after Freeland separated the GST break from a promise to also send $250 to most working Canadians in the spring.
The NDP wants that benefit expanded to also go to non-working seniors and people with disabilities who don’t have a working income.
Liberal Ryan Turnbull, who is Freeland’s parliamentary secretary, said during the debate on the legislation Wednesday evening that the goal is to help Canadians after multiple budget shocks from high inflation after COVID-19 and climate disaster-related supply chain disruptions.
The tax holiday affects dozens of items commonly purchased at Christmas time including children’s clothes and toys, video games and consoles, Christmas trees, restaurant and catered meals, wine, beer, candy and snacks.
The government says someone spending $2,000 on such items over the two-month period will save between $100 and $260 depending on the province.
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The difference is because the four Atlantic provinces and Ontario have a harmonized sales tax with Ottawa, which means the entirety of that – 15 per cent in the Atlantic and 13 per cent in Ontario – will be lifted.
Other provinces will only save the five per cent GST unless those governments choose to lift their provincial sales taxes as well.
Canada has not moved to offer compensation to offset provincial revenue losses to match the federal move on the GST.
Federally the move is expected to cost about $1.6 billion. Ontario said Wednesday it will cost its treasury about $1 billion to remove the provincial portion of the harmonized sales tax off the items, though several things covered by the federal GST holiday are already permanently exempted from the provincial portion.
Alberta, which has no provincial sales tax, will see a five per cent savings.
Conservative finance critic Jasraj Singh Hallan said during the debate Wednesday night that the GST break is “nothing but a cheap gimmick and something just to buy votes from Canadians.”
NDP Leader Jagmeet Singh said the bill should pass tonight, even though Conservative Leader Pierre Poilievre “hates it.”
“New Democrats won’t let him win the fight,” Singh said.
But he said the NDP wants the GST permanently off daily essentials and monthly internet, phone and home heating bills.
The Liberals needed the NDP’s help to suspend debate on a Conservative motion that has tied up the House of Commons for nearly two months. The Conservatives refused to end that debate until the Liberals coughed up unredacted documents on allegations about misspending at a now-defunct federal green technology fund.
This bill is the first new legislation to be debated in the House since the end of September.
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