On Thursday, PM Trudeau unveiled a comprehensive package of measures aimed at easing the financial burdens that many Canadians have been facing in the aftermath of the COVID-19 pandemic

Among these initiatives is a two-month GST holiday, set to take effect from December 14, 2024, to February 15, 2025, allowing Canadians to purchase a variety of goods and services without the Goods and Services Tax. Eligible items include prepared foods, restaurant meals, snacks, children's clothing, toys, books, and even Christmas trees. Trudeau emphasized that this tax break will provide significant relief, estimating that a family spending $2,000 on these items could save around $100. Additionally, the government plans to distribute $250 cheques to approximately 18.7 million Canadians who earned $150,000 or less in 2023, with these payments expected to arrive in early spring 2025. The total cost of these measures is projected to be substantial, with the GST holiday alone costing the federal treasury an estimated $1.6 billion and the rebate costing about $4.68 billion.

These affordability measures come at a time when the Liberal government is facing challenges in public support and recent electoral setbacks. The focus on cost of living is intended to alleviate the pressures felt by many Canadians due to rising prices. However, there are concerns that these stimulus efforts could inadvertently contribute to inflation, which has only recently stabilized.

Both Trudeau and Finance Minister Chrystia Freeland have sought to reassure the public that the measures will not exacerbate inflation, citing the government's strong financial position. In response to these proposals, Conservative Leader Pierre Poilievre criticized the measures as temporary relief, arguing that they do not address the larger issues of rising housing costs and food bank usage. He suggested that the government’s fiscal policies are contributing to ongoing economic challenges. On the other hand, NDP Leader Jagmeet Singh expressed support for the affordability measures, emphasizing the need for immediate assistance for middle-class families while also advocating for more permanent solutions, such as eliminating the GST on essential items. Overall, these announcements reflect the government’s attempt to respond to growing economic concerns among Canadians while navigating a complex political landscape.

Source: CBC