Implementing a two-month Goods and Services Tax/Harmonized Sales Tax (GST/HST) break for groceries and holiday essentials

Bill C-78 introduces amendments to the Excise Tax Act to implement a temporary GST/HST holiday between December 14, 2024, and February 15, 2025. The proposed list of exempt items includes certain groceries, restaurant meals, drinks, snacks, children’s clothing, and gifts.

PBO estimates this measure will reduce federal revenues by $1.5 billion in 2024-25.

PBO also examined the potential impact of the Bill on federal compensation to provincial governments that collect the Harmonized Sales Tax (HST) under their respective Comprehensive Integrated Tax Coordination Agreements (that is, Ontario, Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick). If these provinces do not waive the compensation required under these agreements, PBO estimates that the federal cost would be $1.3 billion greater.