Politics
Trudeau GST Tax Holiday to Cost Taxpayers $6.3 Billion
Prime Minister Justin Trudeau announced a two-month GST break on some purchases and a one-time $250 rebate for all Canadians earning less than $150,000. The proposed GST break would last from December 14 to February 15.
The Liberals said it would cover various things, including children’s clothing and shoes, toys, diapers, restaurant meals, and beer and wine. It also refers to real and artificial Christmas trees, snack foods and beverages, and video game systems.
The move will cost taxpayers almost $4.7 billion, and the GST exemption will cost an additional $1.6 billion, totaling $6.3 Billion.
The federal government is now running a significant deficit. This raises the question of who will have to foot the $6.3 billion bill for today’s one-time payments. The government will have to borrow the money, and future taxpayers must either repay it or service the additional debt perpetually.
Critics argue that the GST credit is a collection of terrible ideas that will do little to lift Canada out of the long-term economic rut in which our economy is stuck.
Conservative Party Leader Pierre Poilievre responded Thursday to Prime Minister Justin Trudeau’s pledge of a “GST Holiday” for Canadians, calling it a “tax trick.”
Poilievre stated that the temporary exemption from the Goods and Services Tax on various ordinary commodities “would not make up for the permanent quadrupling carbon tax on heat, housing, food, and fuel.”
Bloc Québécois leader Yves-François Blanchet stated he is “against any idea of a prime minister who says, ‘I will give you money in order for you to consider voting for me.'”
According to the Canadian Federation of Independent Business, temporary sales tax holidays will only increase confusion and administrative burden for small business owners.
A temporary sales tax decrease would help boost demand in some industries, including restaurants, Canadians, and companies, which require sustainable tax relief during the slow post-holiday season.
The changes amid an inflation-driven affordability crisis have left many dissatisfied with the Trudeau government. A federal election is scheduled for before next October, although it might happen sooner if the minority government falls before then.
For months, the Conservatives have held a double-digit lead over the Liberals in public opinion polls, with Leader Pierre Poilievre promising to cut taxes and government spending to restore affordability.
High inflation has also pressured the Liberals to avoid proposing policies that would boost spending and raise fuel prices.
According to the Fraser Institute, The Trudeau government got one thing fundamentally right: Lowering the tax burden on Canadians has benefits. Unfortunately, the policy package it has proposed to deliver tax relief is completely wrong.
It lowers the incorrect taxes, moves taxes temporarily rather than lowering them, does little to improve economic incentives, and punishes future taxpayers. With the holiday season approaching, this attempt at a gift for Canadian taxpayers is the economic equivalent of a lump of coal in the stocking.
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