Carleton students have mixed reactions as to how the Canadian government’s two-month GST and HST tax holiday will impact their spending.
Starting Dec. 14 and lasting until Feb. 15, items including prepared foods (vegetable trays, salads and pre-made meals), restaurant meals, alcohol (beer, wine, cider and coolers), snacks, books, Christmas trees and children’s products will be tax-free for Canadians.
The tax break aims to help Canadians “afford the things they need and save for the things they want,” according to a Nov. 21 announcement from Prime Minister Justin Trudeau.
The tax break will have a greater impact on students compared to the average Canadian, said Carleton finance professor Michael McIntyre.
“If you are a student and at the end of each month you’re down to your last dollar, it’s significantly more helpful,” McIntyre said.
“It’s so expensive these days,” he added, referencing increasing prices for students in Ottawa, including rent, books, transportation and groceries.
McIntyre pointed out that the tax break may not make an impactful difference. “But really, it’s a drop in the ocean. There are so many other expenses that students face … [the tax break] is not going to solve them,” he said.
Spending $2000 on qualifying goods would result in savings of $100 over the two month period, according to the Canadian Department of Finance. A student may save even less if they spend less.
McIntyre said relieving financial challenges of students and low-income groups are not the only reasons he believes the tax break was announced. With an upcoming election, he said it was “implemented with acquiring favour with voters in mind.”
“The government is under considerable political pressure,” he said. “It’s not because they have surplus money … it looks like an effort just to create favour with voters to me.”
Still, McIntyre said, “if I were a student, I’d be happy.”
Jiire Fowler, a second-year student in law and legal studies at Carleton, said the tax break is a “relief.”
“It’s good to see the government and lawmakers paying attention to the needs of students,” she said.
“When it comes to spending as a student, every little bit contributes to making things affordable … especially as a student living on their own.”
Fowler said she considers herself a strict budgeter, adding she would “notice a difference” after the tax break is implemented.
“Even if it’s a small step towards making aspects of life more affordable, it’s a good sign and it’s a start towards a commitment of making life more affordable for students and low-income people.”
Alexia De Tina, a second-year architecture student at Carleton, said while the initiative will benefit struggling students and families, she’s not sure of the long-term benefits.
“Short term, this tax break over the holiday season will provide a little bit of relief,” she said. “Long term, I don’t know what it’s going to do.”
She added concerns about a federal carbon tax increase planned for April 2025. According to Canada’s 2023 Food Price Report by Dalhousie University, “the added cost of a carbon tax will increase production and transportation costs associated with food and may be passed onto consumers.”
Individuals do have the chance to benefit from the carbon tax. According to Environment and Climate Change Canada, carbon rebate cheques will be sent to qualifying individuals, including students.
De Tina said she doesn’t think the break will have a great impact on her spending.
“It’s more so just going to give me a little bit of grace when I have to spend on [essential items],” she said.
“I’m hoping it will make a little bit of a difference,” she added. “It’d be really nice.”
Featured image by Claire Collee.
