Ontario says Ottawa’s tax holiday will cost the province $1 billion, but it will support the GST break for consumers.
Last week, the federal Liberal government announced plans to pause the GST for two months on prepared food, toys, some types of alcohol and other holiday season staples.
In provinces like Ontario, where the provincial and federal sales taxes are blended together into a harmonized sales tax, the entire HST would be removed from such items.
Premier Doug Ford has said he was supportive of the move.
Now, the office of Finance Minister Peter Bethlenfalvy confirms it will remove the provincial sales tax on items not already covered under provincial rebate.
Ontario has long removed the provincial portion of the harmonized sales tax from similar items listed in Ottawa’s GST break plan, such as children’s clothes and some food.
The premiers of New Brunswick and Prince Edward Island have said they want to be compensated by Ottawa for the provincial revenue lost during the tax holiday.