A tax break and cut cheques: Ottawa announces relief plan for cash-strapped Canadians

PM promises GST relief, cheques in tight times Prime Minister Justin Trudeau is pausing the GST and popping a cheque in the mail for millions of Canadians.

It's an announcement meant to appeal to cash-strapped Canadians—a tax break impacting everything from groceries to children's clothes to diapers—and it will last for two months.

Prime Minister Justin Trudeau is pausing the GST and popping cheques in the mail for millions of Canadians.

"Everyone had to tighten their belts a little bit. Now, we're going to be able to give a tax break for all Canadians," Trudeau said.

For two months starting mid-December, the federal government plans to remove the GST—and HST where applicable—on restaurant meals and dozens of consumer goods, including grocery store snacks, beer and wine, children's clothing, video games, puzzles, toys and Christmas trees.

"It's a small percentage. If you were making a larger purchase, it might make a difference," said Colin Norman.

"Helpful for a couple of months, as least, but long-term, I think we need GST," said Davis Dowler.

"I think it's great, but it should start Dec. 1 and not the 15th of December when most of our Christmas shopping is done," said Dina Ottoni-Battistessa.

One business says the timing is good for them since January and February tend to be slower.

"We'll gain a little bit, but two months is just a pinch in a big pot of salt," said Anna Palmer of Ollia Macarons and Tea.

But Palmer says more needs to be done.

"There's other ways we can get that cost of living down for everyone or bring the minimum wage up for people. We're one of the lowest in Canada," she said.

Others agree, root problems need to be addressed.

Vibrant Communities Calgary said, "Unless we're changing policies at that federal level to change things in a meaningful way, these won't go a long way to help next year or the years after."

Also part of the plan are $250 rebate cheques for 18.7 million Canadians who earned $150,000 or less last year.

The government says the GST holiday will cost $1.6 billion and will require legislation.

The NDP is on board, but only to get the bill through.

"We want to see this relief done as quickly as possible," said NDP Leader Jagmeet Singh.

The Conservatives aren't saying whether they'll support it.

"Today, what we have is a two-month temporary tax trick," said Tory Leader Pierre Poilievre.

Cost of living is still a top issue for voters, and pollsters say there could be some political gain here for the Liberals, but it's time-limited and there could be pressure to continue the tax break.

A federal election is set to take place in the fall, but there is talk about calling it for the spring instead.