Prime Minister Justin Trudeau is expected to announce on Thursday a temporary GST break for certain essential items to help ease affordability pressures. (Photo: Canadian Press)

By Canadian Press

Federal government plans to give $250 cheques to millions of Canadians, cut GST

Nov 21, 2024 | 9:48 AM

Prime Minister Justin Trudeau says his government plans to temporarily lift the federal sales tax off a slew of items just in time for Christmas and send cheques to millions of Canadians this spring.

Trudeau announced the proposed affordability measures in Toronto alongside Finance Minister Chrystia Freeland this morning, ahead of the government’s fall economic statement.

In order to get the measures passed through Parliament, the Liberals will need the support of an opposition party — and the NDP appears poised to do just that, taking credit for forcing the government to adopt its idea.

The GST break, which would begin Dec. 14 and end Feb. 15, applies to a number of items including toys, diapers, restaurant meals and beer and wine.

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Canadians who worked in 2023 and earned up to $150,000 would also receive a $250 cheque in the spring.

About 18.7 million people will receive the cheques, costing the government about $4.7 billion, while the GST break is expected to cost another $1.6 billion.

The measures come as an inflation-driven affordability crunch has left voters unhappy with the Liberal government.

Last week, the NDP promised it would issue a permanent GST break for essential items if it wins the next election, and on Wednesday Jagmeet Singh said in a statement that his party won a “tax holiday” for Canadians.

“The Prime Minister’s Office just informed us that he’s caving to our Tax-Free-Essentials campaign — partly,” Singh said in the statement.

Singh’s proposal would permanently remove the GST from essentials including diapers, prepared meals, cellphone and internet bills. That was expected to cost $5 billion, but he was also urging provincial governments to match the plan with cuts to provincial sales taxes.

The changes proposed by the Liberals will be part of the annual fall economic statement, which will need to pass through Parliament in order to take effect.

The House of Commons has been embroiled in a stalemate for nearly two months as the Conservatives filibuster a motion demanding the government release unredacted documents related to misspending at a green tech fund.

That means no legislation has been debated or voted on for more than eight weeks, because matters of privilege take precedence over all other House business.

The NDP says it will not end the privilege debate. Instead, a spokesperson for the party says it will use a procedural measure to adjourn that debate for one day at a time to allow the tax measures to pass.

This report by The Canadian Press was first published Nov. 21, 2024.

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