Have you noticed your shopping bill was a bit lighter lately?
The federal government recently rolled out a temporary GST/HST tax break on a wide range of products and necessities. The break extends from Dec. 14 through Feb. 15, 2025, with goods from the following categories tax exempt through that period:
- Children’s clothing and footwear
- Children’s diapers
- Children’s car seats
- Certain children’s toys
- Jigsaw puzzles
- Video game consoles, controllers, and physical video games
- Physical books
- Printed newspapers
- Christmas and similar decorative trees
- Most food and beverages and related services
For businesses, the tax break has resulted in a quick pivot for how qualifying products are sold, though two local shops say the transition has been fairly straightforward.
“Easy transition for us, mostly because basically every item in the shop is tax exempt for this time period,” said Megan Murray, owner of Jack and Maddy — A Kids Store in downtown Orillia. “We were able to use our point of sale software to create a pricing rule.”
At Mariposa Market, the tax break has made selling some items easier than it was before.
“At one point, one donut had only the five per cent federal GST, and then if they bought six donuts, there was no tax. But if they did a donut and a coffee, and it totaled up to more than $4 they were paying the 13 per cent tax,” said owner Bob Willsey.
“So now, it's kind of nice and simple to be able to sort of say, basically, if you could eat it and drink it, it's tax free.”
Though it’s been an easy transition at Jack and Maddy's and Mariposa Market, Murray noted businesses offering a wider range of products, or using a different point of sale system, may face difficulties at the cash register.
“I feel for folks that have a much more diverse products line, so I think of other local shops that don't have the same kind of point of sale system, where things are a lot more manual,” she said. “We've been pretty lucky in that way.”
Since the tax break began, both business owners said they’ve seen a lot of foot traffic — but they weren’t sure whether that was due to the break, the holiday season, or easing wintry conditions last weekend.
“We saw a big, big jump on Saturday,” said Willsey. “I'm not too sure if I could attribute that to the tax or attribute it to the fact that it was a nice, pleasant day in cottage country with nice, clear roads and not a big snowfall.”
“It'll be interesting to see coming into February, when it starts to tail off. Is it bringing folks in (through) January and February?” said Murray. “That’s a much slower time for us, so it'll be really interesting to see if it still is a draw at that point.”
In any case, both business owners said they’ve experienced no negatives with the break to date, but Murray said some feel it’s a “bit of a gimmick.”
“You take it because you're not going to voluntarily pay the tax on it, but at the same time, we're all aware … it's a fairly obvious political ploy,” she said.
When former Finance Minister Chrystia Freeland resigned from her post earlier this week, she called for the government to eschew “costly political gimmicks” as the country faces the threat of steep tariffs from the incoming Trump administration.
When asked about the tax break, and proposed $250 GST cheques in 2025, Simcoe North MP Adam Chambers highlighted the current government’s deficit.
“We have a finite amount of resources, and the government just missed its deficit target last year by 50 per cent and this current year by over 20 per cent,” he said.
“In Ms. Freeland's resignation letter she referred to the recent GST cut and proposed $250 cheques as gimmicks,” Chambers said. “I have heard from residents who were surprised to learn that not all goods would be exempt from GST — for example, Christmas trees qualify, but not decorations or wreaths. Model airplanes suitable for kids under 14 qualify, but those for over 14 don't.
"It creates a lot of headaches for customers and retailers," said Chambers.
