Finance announced today a proposed two-month GST/HST relief on a limited list of specified supplies starting December 14, 2024. As noted in the Backgrounder, the proposed relief would apply from December 14, 2024 to February 15, 2025. Finance notes that the temporarily relief would also apply on qualifying goods imported during this same period. The list of qualifying goods is very detailed. Suppliers will have to carefully determine if their supplies qualify for the proposed temporary relief before adjusting their systems.

Suppliers affected by the proposed GST/HST relief include retailers, grocers, restaurants, Christmas tree growers, as well as importers of such qualifying goods.

The Backgrounder notes the temporary relief applies to both GST and HST. I assume the provinces of Ontario, New Brunswick, Nova Scotia and Newfoundland and Labrador will likely also release notes or comments about this temporary HST relief.

Suppliers -- Returned goods? ITC claims?

Based on the Backgrounder, this measure appears to simply be a GST/HST relief. At first glance, the temporary relief does not appear to amend the tax status of the qualifying goods, and as such, should not affect Suppliers’ ITC claims. There is no comment in the Backgrounder on measures related to qualifying goods recently purchased that may be returned and repurchased after December 13, 2024 in order to benefit from the temporary relief (e.g., kids toys already purchased for the holidays).

Suppliers should carefully determine if their goods are proposed qualifying goods before adjusting their systems as the qualifying goods are mostly consumer goods and trying to recapture from their customers any tax owed due to programming errors will likely not be possible.

Finance released a Backgrounder related to the proposed GST/HST relief. There is currently no related legislative proposal.

Qualifying goods

In the Backgrounder, Finance lists the following qualifying goods subject to the proposed tax relief:

Qualifying Goods

The following are descriptions of goods that would qualify for the proposed tax relief.

1. Children’s clothing: meaning garments (other than garments of a class that are used exclusively in sports or recreational activities, costumes, children’s diapers, or children’s footwear) that are:

1. Designed for babies, including baby bibs, bunting blankets and receiving blankets;
2. Children’s garments up to girls size 16 or boys size 20, according to the national standard applicable to the garments, and if no national standard applies to the children’s garments, girls or boys sizes extra small, small, medium, or large; or,
3. Hosiery or stretchy socks, hats, ties, scarves, belts, suspenders, or mittens and gloves in sizes and styles designed for children or babies.

2. Children’s footwear: meaning footwear (other than stockings, socks or similar footwear or footwear of a class that is used exclusively in sports or recreational activities) that is designed for babies or children and has an insole length of 24.25 centimetres or less.

3. Children’s diapers: meaning a product designed for babies or children and that is a diaper, a diaper insert or liner, a training pant, or a rubber pant designed for use in conjunction with any of those items.

4. Children’s car seats: meaning a restraint system or booster seat that conforms to the Canada Motor Vehicle Safety Standard 213, 213.1, 213.2 or 213.5 under the Motor Vehicle Restraint Systems and Booster Seats Safety Regulations.

5. Print newspapers: meaning print newspapers containing news, editorials, feature stories, or other information of interest to the general public that are published at regular intervals. They would not include electronic or digital publications. They would also exclude most fliers, inserts, magazines, periodicals, or shoppers.

6. Printed books: including a printed book or an update of such a book, an audio recording where 90 per cent or more of it is a spoken reading of a printed book, or a bound or unbound printed version of scripture of any religion. However, they would not include:

1. a magazine or periodical purchased individually, not through a subscription;
2. a magazine or periodical in which the printed space devoted to advertising is more than 5 per cent of the total printed space;
3. a brochure or pamphlet;
4. a sales catalogue, a price list or advertising material;
5. a warranty booklet or an owner’s manual;
6. a book designed primarily for writing on;
7. a colouring book or a book designed primarily for drawing on or for affixing or inserting items such as clippings, pictures, coins, stamps, or stickers;
8. a cut-out book or a press-out book;
9. a program relating to an event or performance;
10. an agenda, calendar, syllabus or timetable;
11. a directory, an assemblage of charts or an assemblage of street or road maps (other than a guidebook or an atlas that consists in whole or in part of maps other than street or road maps);
12. a rate book; or,
13. an assemblage of blueprints, patterns, or stencils.

7. Christmas trees or similar decorative trees: whether natural or artificial.

8. Food or beverages: items for human consumption that are:

1. Alcoholic beverages (excluding spirits but including wine, beer, ciders, and spirit coolers up to 7 per cent ABV);
2. Carbonated beverages, non-carbonated fruit juice or fruit flavoured beverages or products that, when added to water, produce one of these beverages;
3. Candies; confectionery classed as candy or goods sold as candies (e.g., candy floss, chewing gum, and chocolate); fruits, seeds, nuts or popcorn coated or treated with candy, chocolate, honey, molasses, sugar, syrup, or artificial sweeteners;
4. Chips, crisps, puffs, curls, or sticks (e.g., potato chips, corn chips, cheese puffs, potato sticks, bacon crisps, and cheese curls), popcorn, brittle pretzels, and salted nuts or seeds;
5. Granola products and snack mixtures that contain cereals, nuts, seeds, dried fruit, or other edible products;
6. Ice lollies, juice bars, ice waters, ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, including non-dairy substitutes;
7. Fruit bars, rolls or drops or similar fruit-based snack foods;
8. Cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating (note that many bread products, such as bagels, English muffins, croissants, and bread rolls, are already zero-rated);
9. Pudding, including flavoured gelatine, mousse, flavoured whipped dessert product, or any other products similar to pudding;
10. Prepared salads, sandwiches, platters of cheese, cold cuts, fruit or vegetables, and other arrangements of prepared food;
11. Food or beverages heated for consumption;
12. Beverages dispensed at the place where they are sold;
13. Food or beverages sold in conjunction with catering services;
14. Food or beverages sold at an establishment where all or substantially all of the food or beverages sold are currently excluded from zero-rating (e.g., a restaurant, coffee shop, take-out outlet, pub, mobile canteen, lunch counter, or concession stand); and
15. Bottled water or unbottled water that is dispensed at a permanent establishment of the supplier.

9. Select children’s toys: a product that is designed for use by children under 14 years of age in learning or play and that is:

1. a board game or card game (e.g., a strategy board game, playing cards, or a matching/memory card game);
2. a toy that imitates another item (e.g., a doll house, a toy car or truck, a toy farm set, or an action figure);
3. a doll, plush toy or soft toy (e.g., a teddy bear); or,
4. a construction toy (e.g., building blocks, such as Lego, STEM assembly kits, or plasticine).

10. Jigsaw puzzles, for all ages.

11. Video-game consoles, controllers or physical game media (e.g., a video-game cartridge or disc).