Trudeau’s Christmas Gift: The Upsides of Procrastination

As we enter the festive season, a common question arises: Have you finished your Christmas shopping yet? If you have, congratulations! You can enjoy the calm before the holiday storm, free from the chaos of last-minute shoppers. Traditionally, many strive to complete their holiday purchases well in advance.

However, this year, waiting might actually offer some unexpected benefits, especially for those who haven’t yet completed their holiday shopping.

On December 14, Canadians will kick off a two-month period of significant tax discounts, courtesy of the federal government and funded by taxpayer dollars.

While Ontario Premier Doug Ford announced a $200 tax rebate for residents next year, Prime Minister Justin Trudeau’s planned relief package dwarfs that initiative.

If Trudeau’s proposed Working Canadians Rebate rolls out as planned, 18.7 million Canadians could see a new $250 rebate in spring 2025. However, this rebate has faced delays due to protests claiming it doesn't assist all Canadians.

Despite the pause on the rebate, the government is moving forward with removing the GST/HST on several everyday items from December 14 to February 15. This includes groceries, restaurant meals, children’s clothing, toys, books, and various holiday decorations.

Prime Minister Trudeau explained, "The past few years have been tough on Canadians. While inflation is easing and interest rates are decreasing, many are still feeling the burden on their household budgets. Our government cannot control prices at the checkout, but we can help by putting more money in the pockets of Canadians to afford essentials and save up for things they want."

The government estimates that this tax relief will save Canadians approximately $1.6 billion overall. For instance, a family that spends $2,000 on qualifying items could save around $100 in GST over the two-month window.

In provinces like Ontario, where HST will also be removed, families could save even more. That same $2,000 expenditure could lead to an additional $260 in savings for Ontario residents.

It's a festive time when many appreciate a little extra cash to spend before winter settles in. However, such a generous initiative comes at a cost, with economists predicting the relief package will amount to about $6 billion. Still, it may foster consumer spending and stimulate GDP growth in early 2025.

Not everyone is thrilled with the announcement. The $250 rebate has been put on hold to address concerns about its scope and fairness. Initially, it was set to benefit all eligible workers and those on Employment Insurance who earned under $150,000 in 2023. Critics from the federal New Democrats and the Bloc Québécois argue that the proposal should encompass more Canadians.

Retailers and provincial leaders have expressed frustration with the temporary tax exemptions. Businesses need to adjust their systems to identify the taxable and non-taxable items, especially since GST/HST will no longer apply to select foods, drinks, children’s products, books, and holiday decorations.

Even Ontario's Premier Ford has acknowledged Trudeau's efforts to return money to taxpayers. However, provincial governments are set to lose tax revenues from the exemptions.

Predictably, the federal Conservatives have condemned these relief measures as detrimental. Critics accuse the administration of engaging in fiscal irresponsibility and suggest these efforts are merely desperate attempts to gain favor with voters.

At this time of the year, few people dwell on government spending habits or their broader economic implications. Many simply want to enjoy the extra cash.

Those who oppose the government's kindness are free to return their tax relief payments or donate them to charity.

Now, here’s another seasonal question to ponder: How will you spend your unexpected Christmas bonus? We welcome your thoughts.

Christmas, Trudeau, Budget