IMPORTANT UPDATES ON THE GST/HST HOLIDAY TAX RELIEF MEASURE (for Retailers)

• Bill 78, the tax relief measure brought forward by the Federal government that temporarily eliminates the GST/HST on a wide range of products for consumers, was passed by the House of Commons and the Senate.  CFIG was informed last night that the legislation has received Royal Assent.   The law goes into effect on December 14^th and ends on February 15^th.
• An additional question was posed by a member on Wednesday with respect to pet food and whether those products would be exempt from GST.   As members know, we have previously provided to you the guidance from the government in our Q&A updates which states that:

“All food that is suitable for human consumption, other than foods sold through a vending machine or food that includes cannabis—is included in the GST/HST relief exemption.”

However, we still posed the question on pet food to the government on behalf of our member and the following reply was received: “We can confirm that the GST holiday does not apply to pet food.”

• CFIG became aware from some of our members, that both Coca-Cola and Pepsico, yesterday communicated their intention to continue charging the GST/HST to retailers. (See PepsiCo Letter | See Coca-Cola Letter)  While the retailer can still claim that charged tax as a credit, this was certainly not the intent of the legislation as it was communicated to industry.  CFIG has raised this issue with both of the companies and the Government—expressing our concern with selective compliance of a tax measure being available to some, but not all, in the supply chain.   CFIG is also conveying our concern that if other suppliers start to replicate this approach, it could put many independents in a difficult position with respect to cash flow and compounds the administrative difficulties already being presented by the tax relief legislation.

Whatever response we receive from the government on this issue, we will share with members when it becomes available.