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Poilievre won鈥檛 support Trudeau鈥檚 tax holiday, calls it inflationary

2-month measure applies to dozens of items commonly purchased over the holidays
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Conservative Leader Pierre Poilievre says his party will vote against Liberal legislation to remove GST off a slew of items over the holidays. Poilievre questions the government during question period, Wednesday, Nov. 27, 2024 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

The Liberals鈥 GST holiday legislation is expected to pass in the House of Commons on Thursday night, even as Conservative Leader Pierre Poilievre said his party will vote against the tax break.

The two-month measure applies to dozens of items commonly purchased over the holidays, including children鈥檚 clothes and toys, video games and consoles, Christmas trees, restaurant and catered meals, wine, beer, candy and snacks.

Poilievre, a vocal advocate for cutting taxes, said the GST break 鈥渋sn鈥檛 a tax cut.鈥

鈥淭his is an inflationary, two-month temporary tax trick that will drive up the cost of living,鈥 Poilievre said on Thursday.

鈥淢y tax cuts are not just about lowering costs, they鈥檙e about sparking more production. By axing the carbon tax, our businesses can hire more workers and produce more goods. By axing the sales tax, we鈥檙e going to get 30,000 extra homes per year,鈥 Poilievre said, referencing his proposals to scrap the federal fuel charge and the GST charged on new home builds under $1 million.

Liberal House leader Karina Gould shot back that Poilievre 鈥渨ould rather play politics than support Canadians鈥 and argued the tax measure would boost consumer confidence at a time when Canadians are worried about the cost of goods.

In a statement sent out shortly after the Conservative leader鈥檚 news conference, NDP Leader Jagmeet Singh said Poilievre is 鈥渂ootlicking for billionaires.鈥

鈥淲hen Poilievre was in cabinet, the Conservatives slashed corporate tax for multi-billion-dollar corporations to 15 per cent from 22 per cent,鈥 Singh said. 鈥淣ow he鈥檚 whining about middle-class families saving a little money over the holidays.鈥

The NDP only agreed to support the bill after the Liberals separated the GST break from a promise to also send $250 to some 18.7 million working Canadians in the spring.

The NDP wants that benefit expanded to non-working seniors and people with disabilities who don鈥檛 have employment income.

University of Calgary economics professor Trevor Tombe said any change on fiscal policy that increases demand, whether it鈥檚 on the revenue or spending side, can affect prices.

鈥淚f you provide tax reductions, that increases people鈥檚 disposable income, so families and individuals, they just have more money at the end of the day to purchase things,鈥 Tombe said.

鈥淏ut 鈥 and there鈥檚 a big 鈥榖ut鈥 here 鈥 these are not very big changes in either taxes or people鈥檚 disposable income, in the form of the $250 cheque. And so it鈥檚 unlikely to have a measurable effect on inflation or on prices.鈥

Tombe said his main critique of the measures is that they are costly and the money would be better spent on policies that would address Canada鈥檚 long-term economic performance.

Liberal MP Ryan Turnbull, who is Finance Minister Chrystia Freeland鈥檚 parliamentary secretary, said during the debate on the legislation on Wednesday evening that the goal is to help Canadians after multiple budget shocks from high inflation due to the COVID-19 pandemic and climate disaster-related supply chain disruptions.

The government said someone spending $2,000 on eligible items over the two-month period will save between $100 and $260, depending on the province.

The difference is because the four Atlantic provinces and Ontario have a harmonized sales tax with Ottawa, which means the entirety of that 鈥 15 per cent in the Atlantic and 13 per cent in Ontario 鈥 will be lifted.

Other provinces will only save the five per cent GST unless those governments choose to lift their provincial sales taxes as well.

Ottawa has not offered compensation to offset provincial revenue losses for governments that choose to match the tax cut.

The temporary tax cut is expected to cost the federal government about $1.6 billion. Ontario said Wednesday it will cost its treasury about $1 billion to remove the provincial portion of the harmonized sales tax off the items, though several things covered by the federal GST holiday are already permanently exempted from the provincial portion.

People in Alberta, which has no provincial sales tax, will see a five per cent savings.

The Liberals needed the NDP鈥檚 help to suspend debate on a Conservative motion that has tied up the House of Commons for nearly two months.

The Conservatives refused to end that debate until the Liberals handed over unredacted documents related to alleged misspending at a now-defunct federal green technology fund.

This bill is the first new legislation to be debated in the House since the end of September, and Gould said the measure needs to pass through the House now so that it can be put in place by Dec. 14 and make a difference during the holiday sales season.





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