An Act respecting temporary cost of living relief (affordability) (), informally referred to as Bill C-78, is a bill introduced on November 27, 2024, during the first session of the 44th Canadian Parliament. It was passed in the House of Commons on November 28, 2024, passed in the Senate on December 12, 2024, and received royal assent on the same day.
Effective December 14, 2024, the bill waives the Goods and services tax and the Harmonized sales tax (for provinces that adopted HST) on certain qualifying items in the following categories until February 15, 2025:
History.
Bill C-78 was introduced to alleviate the cost of living crisis in Canada. In Q2 2022, inflation rates in Canada reached a maximum of 8.1%, the highest rate in over 30 years. The Consumer Price Index of Canada increased 4.4% from the end of 2019 to the end of 2023. Nearly half of Canadians in a Statistics Canada survey reported that their ability to cover daily expenses was greatly impaired by the rise in prices of everyday goods.
Reception.
The bill has received mixed reactions from the general public. While most shoppers welcomed the tax break, others noted that it wouldn't truly create that much of an overall impact. Some businesses reported increased logistical burdens over determining the eligibility of and adjusting the tax rate for throusands of items on short notice. As the tax holiday is implemented on a voluntary basis, consumer confusion may arise, with some retailers participating in the program and others not. The tax relief may also temporarily increase inflation, disporportionately benefit wealthier individuals with more disposable income, and ultimately increase economic inequality