Tax-Free (GST) Spending Across Canada - See Details Inside
- Olu Olu
- Nov 21, 2024
- 2 min read
Updated: Dec 17, 2024
According to Bill C-78, the GST/HST is now in effect till February 15, 2025 and specific information can be found here.
Related Press Release:
The Goods and Services Tax/Harmonized Sales Tax (GST/HST) break will apply to essential items, children’s clothing, diapers, restaurant meals, and common holiday items from December 14 to February 15.
This measure is expected to cost $1.6 billion and save a family spending $2,000 on qualifying goods about $100.
Additionally, a new “Working Canadians Rebate” will provide a $250 payment to 18.7 million Canadians in early spring 2025.
HOW DOES THIS AFFECT YOU?
On the surface, this looks good but below are a few issues to be aware of and suggestions on how to mitigate the inherent financial risks:
1. Potential for Increased Spending
The tax relief will likey encourage increased spending during the holiday season, leading to financial strain once the relief period ends.
Recommendation: Stick to a budget and avoid impulse purchases. Focus on buying only what is necessary and within your financial means.
2. Limited Duration
The tax relief is only for two months (December 14 to February 15), which will not provide long-term financial relief.
Recommendation: Plan purchases of essential items and holiday gifts within this period to maximize savings. Additionally, create a budget to manage expenses beyond the relief period.
3. Limited Scope of Items
The tax relief applies to a specific list of items, which may not cover all essential needs for every household.
Recommendation: Focus on purchasing the items that are covered by the tax relief. For other essentials, look for sales, discounts, or consider bulk buying to save money.
4. Minimal Savings
The estimated savings of $100 for a family spending $2,000 may not significantly impact overall household budgets.
Recommendation: Combine the tax relief with other savings strategies, such as using coupons, loyalty programs, and shopping during sales to maximize overall savings.
5. Temporary Nature of the Working Canadians Rebate
The $250 rebate is a one-time payment, which may not provide sustained financial support.
Recommendation: Use the rebate wisely by applying it towards high-priority expenses or saving it for future needs. Consider investing in financial literacy resources to better manage personal finances.
CONCLUSION
As a financial advisor, my general recommendation is not to get carried away by the temporary relief since it is most likely to lead many people into additional debts.
Stay focused and always operate with a holistic budget/plan. Let's help you set up a sustainable plan that works for you today and into the future. Book a free session now!
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