What Is the GST Break in Canada? A Guide to the 2024 Holiday Tax Relief

The Government of Canada has announced a temporary Goods and Services Tax / Harmonized Sales Tax (GST/HST) relief on nearly all food, beverages, and holiday essentials. The GST break will be in effect from December 14, 2024, to February 15, 2025, and will automatically apply to qualifying items at checkout, helping Canadians enjoy instant savings during the holiday season.

In provinces using the Harmonized Sales Tax (HST), the full HST amount will be waived on eligible items. In provinces like British Columbia, Alberta, Saskatchewan, Manitoba, and Quebec, which use the federal Goods and Services Tax (GST) alongside Provincial Sales Tax (PST), only the 5% GST portion will be exempt.

Cross & Company’s tax experts are here to guide individuals and businesses through these changes. Read on to explore the GST break list, qualifying conditions, and steps businesses need to take.

What Is Included in the GST Tax Break?

• Prepared foods including sandwiches, salads, vegetable or cheese platters, and pre-made meals;
• Restaurant meals, whether dine-in, takeout, or delivery;
• Snacks including chips, candy, baked goods, fruit-based snacks, and granola bars;
• Beer, wine, and cider;
• Pre-mixed alcoholic beverages of not more than 7 per cent ABV;
• Children’s clothing and footwear, car seats, and diapers;
• Children’s toys, such as board games, dolls, and video game consoles;
• Books, print newspapers, and puzzles for all ages; and,
• Christmas trees and similar decorative trees.

Consult the Government of Canada’s GST/HST break page for more details, examples, and exclusions.

Qualifying Conditions for the GST/HST Relief

No GST/HST will be charged on qualifying items if both of these conditions are met:

• Payment is made in full: The item must be paid for between December 14, 2024, and February 15, 2025.
• Delivery or availability: The item must be delivered or made available to the buyer between December 14, 2024, and February 15, 2025.

The items that qualify for GST/HST relief during this period qualify throughout the supply chain, whether they are being supplied from a manufacturer, wholesaler, or retailer. Imported goods also qualify for the temporary GST/HST relief, provided they meet the other qualifying conditions.

What to Do as a Business in British Columbia

If you’re a business in British Columbia, here’s how to prepare:

• Update your point-of-sale systems to ensure your system is programmed to exclude GST on qualifying items automatically.
• Educate your staff on the updated tax rules and how to handle customer inquiries.
• Communicate with suppliers to confirm that invoices and price tags reflect the tax adjustments.
• Keep clear records and remit and report your regular GST and PST as usual.

Businesses using combined GST/PST rates should confirm how the GST portion of qualifying items will be automatically deducted at checkout.

Have Questions? Our Accounting Firm Has Answers

If you have questions about these tax updates, their impact on your business, or how to take advantage of these initiatives, the accountants at Cross & Company are here to help. As a local accounting firm in Nanaimo, B.C., we proudly serve Ladysmith, Parksville, Qualicum, Port Alberni, Duncan, and Lake Cowichan.