Ontario will align with the federal government’s new affordability measures by removing its provincial sales tax on a range of goods during the upcoming two-month “GST holiday.” The move is set to offer significant financial relief to Ontario families.
Last week, the federal government, under Prime Minister Justin Trudeau, unveiled a series of initiatives designed to ease financial pressures over the holiday season. Among them is a temporary two-month “GST holiday” that will apply to select items, starting on December 14. In response, Ontario’s Finance Minister Peter Bethlenfalvy confirmed the province’s commitment to match the federal initiative by suspending the provincial portion of the harmonized sales tax (HST) on items not already exempt.
The provincial government’s decision follows discussions with Ottawa and aims to provide an additional $1 billion in relief to residents. Ontario has long exempted items like children’s clothing and certain food products from its provincial sales tax, mirroring the federal GST holiday’s scope.
Bethlenfalvy emphasized that the tax relief would apply to a broad range of goods not already covered by provincial rebates, benefiting Ontario families across the province. “The provincial government will match the federal government’s two-month GST holiday, providing nearly $1 billion in additional relief for Ontario families,” he stated.
The decision also aligns Ontario with the federal plan to alleviate costs for consumers and small businesses struggling amid high inflation. Some items, such as groceries, already enjoy tax exemptions, while others, including restaurant bills and certain beverages, will see their costs reduced for the duration of the tax holiday.
While Ontario moves forward with its tax break, other provinces have expressed concerns. New Brunswick and Prince Edward Island have indicated they may seek compensation from Ottawa to cover the lost revenue from their own provincial tax holidays.
Deputy Prime Minister Chrystia Freeland has urged provinces to follow Ontario’s example, but has not confirmed whether the federal government will offer financial compensation to the provinces. She highlighted the holiday’s potential benefits, focusing on the positive impact it could have on families facing rising living costs.
Additionally, Ottawa’s affordability package includes a one-time $250 payment for individuals earning up to $150,000 annually, and Ontario has pledged to distribute $200 cheques to all residents, irrespective of income.
The two governments’ alignment on this tax holiday marks a collaborative effort aimed at addressing the rising cost of living, though provincial leaders are still pushing for clarity on compensation for lost revenues.
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