For most low- and middle-income families, “getting any amount of discount is always a benefit,” said Jessica Morgan, founder of financial literacy site Canadian Budget.
But to take advantage of the tax break, “it really depends on what the purchase is for and when,” she said.
The tax break can mean savings in the short term, but the equation may change when you consider whether you can fit these purchases into your budget. Putting them on credit could mean racking up interest and adding to your debt.
“It’s a decision people will have to make depending on when they need to make those purchases, when they’re giving those gifts or if they’re hosting a dinner or they need to do their regular groceries,” Morgan said.
What items are included in the GST holiday?
The federal government’s GST holiday will provide a 5% discount on numerous items including children’s clothing, books, toys, food and some alcohol starting Dec. 14 until mid-February. The Liberals also pledged to send $250 benefit cheques to Canadians who earned an income of up to $150,000 last year.
On the heels of that announcement, the Ontario government announced a similar tax break for its residents on certain items.
If the provincial tax break is implemented, those living in Ontario could see a total tax break as high as 15% on purchases.
Morgan said families with young kids will benefit the most from the tax break and they should consider stocking up on essentials such as diapers.