Canada Announces Temporary GST Cut, Provinces Seek Compensation for Revenue Loss

The federal government introduces a two-month GST exemption on essentials and $250 rebates for workers, while provinces raise concerns over financial impacts.

Prime Minister Justin Trudeau announced a two-month GST exemption starting December 14, 2024, covering items like groceries, children's clothing, and restaurant meals.
The federal government will also distribute $250 rebates to about 18.7 million working Canadians earning under $150,000, beginning in early spring 2025.
Provinces including New Brunswick, Prince Edward Island, and Quebec are concerned about revenue losses from the tax cut and are requesting federal compensation.
Finance Minister Chrystia Freeland has not confirmed whether provinces will be compensated, though HST agreements may require it if revenue losses exceed a set threshold.
Retailers face logistical challenges in implementing the tax holiday, while some premiers, such as Ontario's Doug Ford, have welcomed the initiative as a relief measure for residents.