Will the Liberals’ ‘tax holiday’ pay political dividends? What it signals

Here's how the Liberal affordability measures announced Thursday could signal about the party's standing in the eyes of voters and the wider Canadian economy.

The Liberal government announced a suite of affordability measures Thursday that Ottawa says aims to put more money in Canadian bank accounts, a move experts say is likely to boost Canada’s economy and could register with voters who are still feeling the pinch of a higher cost of living.

Prime Minister Justin Trudeau was in Toronto to unveil a GST/HST “holiday” on select grocery items and other consumer goods ranging from video games to Christmas trees. He also announced the Working Canadians Rebate — a plan to send $250 cheques this spring to every individual who worked in 2023 and made up to $150,000.

“We’ve been able to get through the past couple of years. Everyone had to tighten their belts a little bit, and now we’re going to be able to give a tax break for all Canadians,” Trudeau said Thursday.

While inflation has cooled back to the Bank of Canada’s two-per cent target, the last few years of rising costs have left a mark on Canadians.

Ipsos polling conducted exclusively for Global News in late August showed that more than six in 10 respondents (63 per cent) are concerned they wouldn’t be able to absorb any unexpected costs of $1,000 or more; that figure rises to 72 per cent among parents.

Sahir Khan, executive vice-president of the Institute of Fiscal Studies and Democracy, tells Global News that recent easing inflation hasn’t necessarily made life easier as years of living with rising costs compound on Canadian families.

But the latest measures also come as the governing Liberals fall far behind the challenging Conservative Party in the polls and affordability issues continue to top the list of voter priorities.

Sending voters a cheque or showing them a tangible impact when they tap their card at the grocery store provides recognition that Canadians may associate with the Liberals, Khan says. That’s a political message that has been missing from the carbon pricing rebates, he notes.