On November 21 2024, the Canadian government announced two significant financial relief measures aimed at easing the financial burden on Canadians: the Working Canadians Rebate for individuals and a temporary GST/HST exemption on essential goods.
Working Canadians Rebate
The proposed Working Canadians Rebate is a tax-free payment of $250 targeted at individuals who worked in 2023 and earned up to $150,000 in net income. This is an individual rebate based on personal net income. To qualify, individuals must:
- File their 2023 tax return by December 31, 2024, and either:
- Claim the tax credit for Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions on employment or self-employment earnings;
- Claim the tax credit for Employment Insurance (EI) or Quebec Parental Insurance Plan (QPIP) premiums on employment or self-employment earnings; or
- Report income from EI or QPIP benefits.
- Be a resident of Canada on March 31, 2025.
- Not be incarcerated for at least 90 days immediately prior to April 1, 2025.
- Be alive on April 1, 2025.
The Canada Revenue Agency (CRA) plans to automatically distribute this rebate via direct deposit or cheque in early spring 2025 to approximately 18.7 million eligible Canadians.
Temporary GST/HST Exemption
To provide immediate financial relief, the government proposes a temporary exemption from the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) on essential goods from December 14, 2024, to February 15, 2025. This exemption covers items such as:
- Groceries, including prepared foods, pre-made meals, and snacks, including chips, candy etc.
- Restaurant meals, whether dine in, take out or delivery.
- Beer, wine, and cider with an alcohol content below 7%.
- Children’s clothing, footwear, car seats, and diapers.
- Children’s toys, such as board games, dolls and video game consoles.
- Books, print newspapers and puzzles for all ages.
- Christmas trees.
This measure is expected to provide approximately $1.6 billion in federal tax relief, offering Canadians tangible savings during the holiday season.
Starting December 14, 2024, businesses are required to remove GST/HST on qualifying goods at the point of sale. This temporary tax relief applies to eligible goods that are purchased and delivered during the designated relief period. Additionally, the GST/HST exemption extends to imports of the same qualifying goods, provided they are brought into Canada between December 14, 2024, and February 15, 2025.
Implications for Tax Planning
These initiatives underscore the importance of timely tax filing and accurate reporting of income and deductions. Eligible individuals should ensure their 2023 tax returns are filed by the December 31, 2024, deadline to benefit from the Working Canadians Rebate. Additionally, consumers can plan their purchases of essential goods during the specified period to maximize savings from the temporary GST/HST exemption. Business owners should prepare to have GST/HST removed from qualifying goods at checkout as of December 14, 2024.
For personalized advice on how these measures may affect your financial situation, please consult with your accountant or Virtus advisor.
Further Reading
For complete details regarding this announcement, refer to the resources below from the Government of Canada:
