Canada’s tax break will end this month, and while some items may have been noticeably cheaper, whether it made a meaningful difference is up for discussion.
The temporary tax cut which came into effect on Dec. 14, applies to certain foods, and clothing items, among other goods until Feb. 15.
But, according to data from Canadian financial company Moneris, it has not created any dramatic upshifts in spending habits.
In fact, its comparison of data from Dec. 14, 2023 to Jan. 15, 2024, with the same period in 2024-2025 indicates a decline in overall transactions and spends.
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In Ontario, the total spend was down eight per cent year-over-year.
The trend is reflected Canada-wide too. Across the country, overall spending was down four per cent, transaction count was down one per cent and transaction size was down three per cent during this time period.
In addition, Moneris says though the tax break didn’t drive significant demand, some areas did see growth.
Children’s and infant apparel stores saw transaction counts rise eight per cent, while transaction size remained unchanged.
“Similarly, family clothing stores experienced a modest two per cent growth in transaction size while transaction count was down four per cent,” the study says.
On Sunday, the Liberal Party sent out a reminder on X, encouraging people to make the most of the break before it concludes.
“Heads up, Canada: there’s just under 1 week left to get a tax break on the GST/HST!
“Until February 15, you can continue to save on everyday goods like groceries, take-out meals, kids clothing, and more,” the post says.
Heads up, Canada: there’s just under 1 week left to get a tax break on the GST/HST!
— Liberal Party (@liberal_party) February 9, 2025
Until February 15, you can continue to save on everyday goods like groceries, take-out meals, kids clothing, and more!
Meanwhile, Canadians have been weighing in online about the impact of the tax break.
“I’ve saved close to $5 since December on my groceries,” one X user wrote.
“Would be nice if it was forever,” another person wrote.
Others took the opportunity to criticize the government for its impending Carbox Tax hike.
“And then a carbon tax increase on April 1…Imagine posting this as if you’re doing something good for Canadians,” an X user commented.
While some residents say the effects of the break were minimal, Moneris says it will have a more comprehensive understanding of its consequences after it ends, nonetheless its preliminary data indicates some unexpected outcomes.
“While the tax break aimed to spur spending, Moneris’ data shows it may have unintentionally slowed it down…the data suggests that the break may not have had its anticipated effect,” Sean McCormick, director of business development at Moneris, said in a statement.
“The drop in transaction volume and count indicates that the tax break’s modest savings didn’t seem to appeal to consumers. Its short two-month window likely further curbed the opportunity for consumers to plan and make meaningful purchases, ” he continued.
“There’s more to uncover about what drives spending at the provincial level,” McCormick concluded.
