For most low- and middle-income families, “getting a discount of any amount is always a benefit,” said Jessica Morgan, founder of economic literacy website Canadian Budget.
But to benefit from the tax break, “it really depends on what the purchase is made for and when,” she said.
The tax break can lead to short-term savings, however the equation can change as you think about whether you may fit these purchases into your budget. Taking them out on credit can rack up rates of interest and increase your debt.
“It’s a decision that people have to make depending on when they need to make those purchases, when they need to give those gifts, whether they need to host a dinner or whether they need to do their normal shopping,” Morgan said.
Which items are included within the GST holiday?
Federal government’s GST holiday offers a 5% discount quite a few articles including kid’s clothing, books, toys, food and a few alcohol from December 14th to mid-February. The Liberals also promised to send $250 profit checks to Canadians who earned income of as much as $150,000 last 12 months.
Following this announcement, the Government of Ontario announced the same tax break for its residents on certain items.
If the provincial tax break is implemented, people living in Ontario could receive a complete tax break of as much as 15% on purchases.
Morgan said families with young children would profit most from the tax break they usually should consider stocking up on essentials like diapers.
