Canada’s ‘tax holiday’ begins. Here’s what to expect

The 'tax holiday' announced by the federal government is now in effect until Feb. 14, 2025, with various toys, clothing and other items exempt.

Canadians heading out to do some holiday shopping this weekend will notice some of the tax on various products knocked off as the federal government’s temporary “tax holiday” goes into effect Saturday.

The two-month tax break is expected to save taxpayers an estimated $1.5 billion, and will reduce that amount from federal revenues, the parliamentary budget officer (PBO) said in a costing note published Monday.

The “tax holiday” is in effect until Feb. 14, 2025.

Basic groceries like fresh fruits and vegetables, most milk products, fresh meat, poultry and eggs already have no GST/HST, but prepared foods like sandwiches, salad and pre-made meals, as well as snacks like chips, candy and baked goods will see the GST/HST dropped.

Non-alcoholic drinks like coffee, tea, carbonated drinks and juices, as well as beer and malt beverages are eligible for the tax break, in addition to wine, cider and sake with a certain level of alcohol content.

However, food or drink sold from a vending machine, dietary supplements, or items that don’t qualify as for human consumption like pet food will not qualify.

Those looking for holiday gifts will see various kids’ items and clothing covered, including baby and children’s clothes and footwear up to certain sizes, children’s diapers and car seats.

Adult clothing, footwear and specialized clothing aren’t eligible for a break.