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The Ontario government has announced it will match the federal government’s two-month GST holiday by temporarily removing the provincial sales tax (PST) from a range of items not currently covered by provincial rebates. Ontario Finance Minister Peter Bethlenfalvy’s office stated that the move will provide “nearly $1 billion in additional relief for Ontario families” and comes after “extensive discussions” with the federal government.

How the PST and GST Holidays Work

Starting December 14, the federal government will eliminate GST on items like restaurant meals, diapers, toys, snacks, video games, and even Valentine’s Day gifts, with the tax holiday set to run until February 15. Ontario’s PST relief will apply to similar items, making purchases during the holiday shopping season and beyond more affordable.

The tax holidays are part of a broader affordability effort aimed at addressing the rising cost of living. In addition to tax breaks, Ontario will send $200 cheques to taxpayers in the new year. Similarly, the federal government plans to send $250 cheques to Canadians who earned less than $150,000 in 2023.

Addressing the Cost of Living Crisis

Premier Doug Ford, who announced Ontario’s cheques last month, emphasized that these measures are necessary to help residents cope with soaring costs. “Life has become too costly,” Ford said. Federal Finance Minister Chrystia Freeland has echoed this sentiment, stating that the two-month GST holiday is intended to tackle what she referred to as a “vibecession”—the disconnect between improving economic indicators and Canadians’ financial struggles.

Criticism of the Measures

While these temporary tax breaks and payments aim to provide relief, critics argue that they are short-term fixes ahead of upcoming provincial and federal elections. They suggest that the funds could be better allocated to social programs or permanent affordability solutions.

Despite the criticism, both Ford and Prime Minister Justin Trudeau maintain that these measures are designed to address the immediate financial pressures faced by Canadians.

What It Means for Ontarians

For Ontario families, these combined tax holidays and direct payments offer some financial breathing room during the holiday season. With an estimated $1 billion in savings from the PST relief alone, the measures aim to help residents manage costs during a challenging economic period.

What’s Next?

The tax holidays and cheques are set to roll out in the coming months, providing both immediate savings and short-term financial relief. Whether these efforts will lead to more permanent affordability solutions remains to be seen.

References:

Ontario to match GST holiday by removing provincial sales tax on some items

Ontario to match GST holiday on some items | CTV News

Ontario to match GST holiday by removing provincial sales tax on some items – CP24