Liberals, NDP pass bill to enact 2-month GST holiday in House of Commons
The House of Commons recently passed a significant piece of legislation that will eliminate the federal sales tax for a period of two months on a variety of items, including children’s toys, books, restaurant meals and takeout, as well as beer and wine. This move was supported by the NDP, which helped the minority Liberals in pushing the exemption through, despite opposition from the Conservatives and the Bloc Québécois.
The bill, which was fast-tracked through the usual procedural steps, will now move to the Senate for approval. Once passed, the legislation will provide a GST rebate starting on December 14th and will remain in effect until February 15, 2025.
Initially, the Liberals had proposed a tax holiday along with a plan to distribute $250 cheques to 18.7 million Canadians who worked in 2023 and earned $150,000 or less. However, concerns were raised about the exclusion of certain individuals from receiving these cheques. In response to this, the NDP demanded that the promises be split into two separate pieces of legislation. As a result, the bill passed by the House of Commons did not include the cheque measure, leaving its future uncertain.
NDP Leader Jagmeet Singh stated that his party would support the cheque measure later on if it was expanded to include more Canadians, such as seniors, people with disabilities, and injured workers. Meanwhile, Conservative Leader Pierre Poilievre criticized the tax holiday as a “temporary two-month tax trick” and proposed alternative policy suggestions, including scrapping the carbon tax and removing the GST from new homes sold for under $1 million.
Despite the opposition, Government House Leader Karina Gould defended the tax holiday, calling Poilievre’s stance “disappointing” and “disingenuous.” She emphasized that the measure would benefit all Canadians and help alleviate financial pressures.
The NDP, which recently ended its governance agreement with the Liberals, played a crucial role in pushing for the GST holiday to be included in the legislation. MP Alexandre Boulerice noted that while the two-month holiday may be short, it will still provide relief to the middle class and workers.
The federal government estimates that the tax holiday will cost approximately $1.6 billion in foregone revenue, while the $250 cheque program is projected to cost around $4.68 billion. The House of Commons has been gridlocked in recent weeks due to opposition demands for documents related to a defunct foundation, causing a halt in regular business. In order to prioritize the GST bill, the NDP and Liberals agreed to temporarily pause the privilege debate.
Overall, the passage of this legislation marks a significant step towards providing financial relief to Canadians during a challenging economic period. The impact of the tax holiday and potential distribution of $250 cheques will be closely monitored in the coming months to assess its effectiveness in addressing cost-of-living pressures.
