Temporary GST/HST Holiday: What Was Exempt and What Wasn't

Key takeaways

• A temporary GST/HST exemption applied to many consumer goods from December 14, 2024 to February 15, 2025
• The federal GST portion was reduced to 0% on qualifying items; participating HST provinces also reduced their provincial component
• Groceries, restaurant meals, children's clothing, toys, books, and Christmas trees were included
• The holiday ended February 15, 2025; standard GST/HST rates resumed immediately
• Businesses that collected GST/HST during the holiday must remit correctly based on the date of supply

The federal government introduced a temporary GST/HST holiday on certain consumer goods, effective December 14, 2024 through February 15, 2025. The measure was designed to provide cost relief on everyday purchases during the holiday season. For businesses, compliance required updating point-of-sale systems on both the start and end dates.

Which goods qualified

Qualifying supplies included: food and beverages (most restaurant meals, takeout, delivery), children's clothing, footwear and diapers, toys, video games and consoles, books, newspapers, Christmas trees, and certain other items. The existing zero-rating for basic groceries was unchanged.

Specifically excluded: alcohol, cannabis, tobacco, and vaping products, which remained fully taxable throughout.

HST provinces

Ontario, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador are HST provinces, where provincial and federal sales tax are combined. For qualifying supplies, the full HST rate dropped to 0% in these provinces during the holiday period — not just the 5% federal portion.

Business compliance issues

The short notice period created compliance challenges for many businesses. Retailers who overcharged GST/HST during the holiday must refund the tax to customers and adjust their remittances. Input tax credits claimed on purchases during the holiday may need to be adjusted if the purchases were made zero-rated. Businesses with questions about their specific situation should review CRA's published guidance or consult a tax advisor.