The Canadian government has presented a new program to help those struggling due to the increased cost of living. With observable inflation of goods and services, especially food prices, the government has opted to allow for the temporary removal of the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) on foods and necessities.
With no delay, this initiative brings the opportunity of up to $260 in annual cost-cutting for Canadian families on basic needs.
This cut forms part of a range of measures to counter the multiple economic vices that Canadians endure amid persistently rising inflation, particularly in the cost of food, toilet, and cleaning essentials.
Retail consumers, in particular, may benefit immensely from this relief because essential consumer products would no longer exert much pressure on consumers’ budgets.
What Is New In GST On The Other Hand Or HST, And How Does The Reduction Assist?
To explain this reduction, let’s explain the operation of the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) in Canada. It should also be noted that there are two types of tax levied within Canadian territory – the Goods and Services Tax – GST for short, and the Harmonized Sales Tax – HST for short used in provinces such as Ontario and Nova Scotia.
Broadly, GST/HST is charged as a percentage of the price of goods and services prepared for supply in the Canadian market but most of the necessary products such as food and health care products are either zero-rated or qualify for a lower rate of taxation.
This recent cut should ease the burden slightly – specifically for those lower-income earners who spend the bulk of their income on necessities.
