Canada: Proposed temporary GST/HST exemption on consumer goods
No specific details yet on how proposed exemption would apply
The federal government on November 21, 2024, announced a proposed temporary goods and services tax / harmonized sales tax (GST/HST) exemption on certain consumer goods. This tax relief is scheduled to apply from December 14, 2024, to February 15, 2025, and would affect retailers, restaurants, grocers, online marketplaces, and food delivery businesses that sell qualifying goods such as specified children’s clothes and toys, alcoholic beverages, and prepared meals.
The qualifying goods include children’s clothing, footwear, diapers, car seats, print newspapers, printed books, prepared foods, restaurant meals, beer, wine, cider, certain alcoholic beverages, snacks, children’s toys, jigsaw puzzles, video game consoles, controllers, physical game media, and natural and artificial Christmas trees.
The tax exemption has not yet been legislated or enacted, and the government has not released legislative proposals detailing its administration.
KPMG observation
The government has not provided specific details on how the GST/HST exemption would apply to qualifying goods or how transactions straddling the effective date would be treated.
Read a November 2024 report prepared by the KPMG member firm in Canada