In response to a Liberal-NDP plan to give Canadians a two-month Goods and Services Tax and Harmonized Sales Tax break on select items, Ontario is set to give residents a tax break of their own.
According to a statement by Ontario Finance Minister Peter Bethlenfalvy, Ontario will announce a Provincial Sales Tax holiday during the same two-month period from Dec. 13, 2024, to Feb. 15, 2025.
Since 2010 Ontario’s HST rate has been 13% with the PST accounting for 8% of that and the GST accounting for 5%.
“Following extensive discussions with the federal government about how we can continue to work together to advance Ontario’s priorities, the provincial government will match the federal government’s two-month GST holiday by removing PST from items not currently covered by existing provincial rebates,” the statement said.
Bethlenfalvy claimed that the move would save Ontario taxpayers nearly $1 billion.
Last week, Prime Minister Justin Trudeau announced the GST / HST would provide $1.6 in tax relief. The plan would exempt items such as groceries, alcohol, children’s essentials such as car seats, clothing, toys, board games and more for two months.
The PST is an 8% provincial sales tax on items and services acquired in Ontario. The Canadian Revenue Agency already exempts some items and services from this tax. The announcement indicates that the tax will also be paused for the remaining items and services.
According to the CRA website, some items and services eligible for point-of-sale HST rebates include legal aid and educational services, music lessons, domestic ferry rides, and medical and dental services. Home insurance, for example, is specifically exempt from the 8% PST.
The Canadian Taxpayers Federation applauds the Ford government for deciding to give taxpayers in Ontario a holiday break.
“Any decision to save taxpayers money is a good decision. All governments should be taking less money from people,” Franco Terrazzano, the CTF’s federal director told True North in an email.
He said Ford also deserves credit for “making life more affordable” with his tax cuts on fuel.
“Trudeau, on the other hand, has been making life more expensive for years with his carbon tax hikes, payroll tax hikes and alcohol tax hikes, among others. If Trudeau was serious about making life more affordable, he would scrap his carbon tax and stop hiking other taxes,” Terrazzano said.
“After raising taxes on everything all the time, Trudeau’s temporary GST cut doesn’t go nearly far enough.”
The Ontario Ministry of Finance did not respond to True North’s requests to comment.
Trudeau’s Liberals also announced an estimated 18.7 million Canadians who earn less than $150,000 in net income would be eligible for $250 “Working Canadians Rebate” cheques in the spring. If the government estimate is accurate, the rebate will add $4.675 billion to the national debt, which the CTF estimates is over $1.24 trillion.
Along with Trudeau’s rebate, Ontarians can expect a separate $200 cheque from Doug Ford’s government. The province was projected to run a $647 million deficit in the fiscal year of 2023/ 2024. Ontario’s net debt from the $200 handouts will add to the over $408 billion deficit.