A taxpayer advocacy group is urging Canadians to stock their shelves as the Liberals’ tax holiday draws to a close. Similarly, a small business advocacy group is concluding that the holiday was a failure.
The Canadian Taxpayers Federation is reminding Canadians to purchase books, beer, and baby clothes before their prices increase when the GST/HST holiday ends on Saturday.
“Even though this temporary tax holiday was a political gimmick, folks should still stock up now to save on the GST,” said the CTF’s B.C. Director, Carson Binda. “Ottawa needs to do more than temporary sales tax holidays, which means politicians must find real savings so taxes can go down permanently.”
The temporary tax holiday applied to food, alcohol, restaurant meals, children’s clothing, car seats, diapers, toys, Christmas trees, and books between Dec. 14, 2024, and Feb. 15, 2025.
However, after factoring in the administrative burden, the tax break was a net negative for many businesses.
According to the Canadian Federation of Independent Business, only five per cent of small businesses saw an increase in sales during the tax break compared to the same period last year — closely aligning with the four per cent that had expected stronger sales beforehand.
“By all accounts, the government’s GST holiday was a flop for small businesses,” said CFIB President Dan Kelly. “For many retailers, it was an administrative nightmare to get point-of-sale machines compliant just before Christmas, let alone sort out which LEGO sets the holiday applied to, or how many items in a gift basket had to be tax-free for it to qualify.”
On top of the administrative nightmare, the CFIB said that the Canada Revenue Agency and Finance Canada were providing conflicting information on whether the tax break was mandatory, leaving businesses scratching their heads on whether they needed to comply.
A previous report from the Parliamentary Budget Officer showcased that the GST holiday would cost taxpayers $2.7 billion to compensate provinces with a harmonized sales tax.
In an exclusive interview with True North, Conservative Leader Pierre Poilievre said that printing money is the sneakiest way to raise taxes without holding a vote.
“Inflation is actually just the symptom. The real disease is overspending. Governments don’t print money for fun. They print it so they can spend it. It’s the sneakiest way to raise taxes without actually holding a vote,” said Poilievre. “It’d be like raising the GST three or four points, you’d get thrown out of office for that. But if you just tell the central bank to do a bunch of backroom hocus pocus that no one can understand, call it quantitative easing, you can sneak it under the radar. And that’s what they did.”
Canada’s national debt has more than doubled during Prime Minister Justin Trudeau’s tenure. It currently sits above $1.25 trillion, compared to just $616 billion when Trudeau took office, meaning he spent more money than every other prime minister before him combined.
The CTF revealed that the GST’s return would add five per cent to the cost of restaurant meals in B.C., Alberta, Saskatchewan, Manitoba, the Territories, and Quebec. Provinces with the HST will see a further increase — costs in Ontario will rise 13 per cent, with costs in the Atlantic provinces increasing by 15 per cent.
This increase comes despite 62 per cent of restaurants operating at a loss or barely breaking even, an increase of nine per cent from July 2023.
The cost of beer will increase by $4.40 per case nationwide. Again, In provinces with HST this cost will be even more, with a case increasing by $8.04 in Nova Scotia, for example.
A previous poll revealed that Canadians viewed the tax holiday and $250 cheque as a political gambit and said it would not help them.
Only two per cent of non-Liberal voters said the tax break would make them “much more likely” to vote Liberal, while three per cent said it would make them “more likely” to support the party.
While 55 per cent said it would make no difference, eight per cent said these policies would make it “less likely” they’d vote Liberals in the future and 28 per cent said the tax holiday would make it “much less likely” for them to vote Liberal in the future.
The CTF called on the Liberals to go line-by-line through the budget and find real savings for taxpayers.
The CFIB made a different request.
“The past few months have been incredibly challenging and filled with uncertainty for many small firms. As they transition their systems back to the original amount of GST, we urge the CRA to be lenient and waive taxes owed, penalties, and interest for good faith errors made during the rushed implementation period,” said Kelly. “The government should also provide affected businesses with a $1,000 credit in their GST/HST accounts to offset programming and administrative costs they incurred back in December.”