Government

Trudeau’s Christmas Gift: The Benefits of Procrastinating Your Holiday Shopping

Published December 11, 2024

As the holiday season approaches, a pressing question arises: Have you completed your Christmas shopping? If you have, congratulations! You can enjoy a stress-free shopping experience without the last-minute chaos.

However, for those who have delayed their shopping, there’s potential good news this year. Those who wait might find themselves at an advantage, depending on their specific gift lists.

Notably, December 14 marks the introduction of a significant federal tax break, impacting many consumers' wallets. This is part of a broader relief effort by the government, funded by taxpayers.

While Ontario Premier Doug Ford has recently announced a $200 “taxpayer rebate” for residents, Prime Minister Justin Trudeau's relief package is far more substantial. If it goes ahead as planned, 18.7 million Canadians could receive a $250 Working Canadians Rebate in early spring 2025. However, this particular rebate is currently on hold due to public protests about its limited impact.

In the meantime, the government will eliminate the HST/GST on various items from December 14 to February 15. This includes snacks, groceries, meals at restaurants, children’s clothing, toys, books, winter decorations, and more.

The Prime Minister recently addressed the situation, stating, "The past few years have been tough. Everything seems more expensive. While we see inflation easing and interest rates falling, many Canadians are still feeling the pinch in their budgets. We can’t control prices at checkout, but we can provide financial relief to help people afford their necessities and save for what they desire."

The estimated tax relief from removing the GST for two months is around $1.6 billion. This means a family spending $2,000 on qualifying goods—such as children's clothing, toys, and meals—could save approximately $100 during this period.

In provinces like Ontario, where the HST will also be lifted, the same family could see total savings of around $360, enhancing the financial benefit.

Isn't it great to have a little extra money just when winter begins to settle in?

This tax relief comes at a sizable cost, however. Economists estimate the full relief package will amount to about $6 billion. The expectation is that increased consumer spending will, in turn, provide a boost to the gross domestic product growth in early 2025.

Not everyone is pleased with the proposed measures. While the planned $250 payment has faced backlash for not including all Canadians, certain political parties, such as the federal New Democrats and Bloc Québécois, argue that the package should benefit a broader population.

Furthermore, some businesses and provincial leaders have voiced their concerns about the two-month tax exemptions. Retailers must alter their systems to manage taxable versus non-taxable items, which complicates their operations. This tax removal applies to a wide range of products, including prepared foods, snacks, children's toys, restaurant meals, and even holiday decorations like Christmas trees.

Despite Doug Ford's acknowledgment of the benefits to taxpayers, provincial governments stand to lose out on revenue due to these tax exemptions.

The federal Conservatives have criticized these measures, arguing that they are detrimental to the economy and merely an act of political maneuvering.

Cynics worry that these initiatives contribute to increased government debt, a strategy seen as an attempt to calm public dissatisfaction amid decreasing approval ratings for Trudeau.

The question remains, though: during the holiday season, how many people truly lose sleep over the government's fiscal policies? Most individuals are simply eager to take advantage of any financial relief offered. After all, whether we owe money now or later, receiving an unexpected bonus is welcome.

For those who disapprove of this federal initiative, an option exists to return or donate the funds to a charitable cause.

This brings us to another seasonal question: how do you plan to use your unexpected Christmas bonus? Share your thoughts!

Christmas, Shopping, Trudeau