29th November 2024: The House of Commons has approved a two-month suspension of the federal sales tax on various goods, following a late-night vote on Bill C-78, the Tax Break for All Canadians Act. Supported by the Liberals and the NDP, the legislation aims to ease financial pressure on Canadians during the holiday season.
Set to take effect from December 14 to February 15, the measure will exempt items such as Christmas trees, diapers, clothing, toys, junk food, beer, wine, and restaurant meals from federal sales tax. In provinces with harmonized sales taxes, the entire tax will be waived, while in others, only the federal portion will be removed. The temporary tax relief is expected to cost $1.6 billion.
The Conservatives and Bloc Québécois voted against the bill, criticizing it as an ineffective and politically motivated move. Conservative Leader Pierre Poilievre dismissed the initiative as an “inflationary, two-month tax trick,” arguing it would do little to address the rising cost of living. He reiterated his party’s preference for permanent tax cuts, including the removal of the consumer carbon price and federal sales tax on new homes.
The Liberals defended the measure, calling it a practical solution to help Canadians with immediate financial challenges. Finance Minister Chrystia Freeland’s office accused the Conservatives of hypocrisy, stating, “They claim to support Canadians but vote down real relief when it’s offered.”
Green Party Leader Elizabeth May acknowledged the financial struggles many Canadians face but criticized the bill as “vote-buying” during the debate. Ultimately, she voted in favor, despite labeling it poor policy.
The Bloc Québécois, while supportive of permanent tax exemptions for essentials like children’s diapers, expressed concerns about the temporary removal of taxes on luxury items such as champagne and high-end dining.
The bill’s passage was expedited with procedural adjustments, bypassing the usual committee reviews. Government House Leader Karina Gould worked with the NDP to fast-track the legislation amid an ongoing Conservative filibuster over unrelated government spending debates.
The debate surrounding Bill C-78 underscores the political divisions on how best to address Canada’s affordability crisis, with both supporters and critics questioning the long-term impact of the measure.
