Leong: How do you mess up a tax cut? Liberals do with GST holiday

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There’s nothing quite like watching a government trying to bribe us with our own money.

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The federal Liberals have provided us with the latest, most blatant example of this.

In something of a surprise move, a number of goods and services have been excluded from the GST since Dec. 14, 2024, and it will continue to be this way until Feb. 15, 2025.

The feds sold it as a meaningful gesture to help Canadians with day-to-day cost pressures, while most everyone else saw it as a cynical attempt to prop up a moribund government — and a bad attempt at that.

If Prime Minister Justin Trudeau had believed the GST holiday would help lift his flagging fortunes, he was quite mistaken: Trudeau announced Monday he was stepping down as leader of the Liberal party and putting Parliament on pause until March.

Even former finance minister Chrystia Freeland criticized Trudeau over the rollout of this and other fiscal measures while taking her parting shots last month, describing the temporary tax cut as a gimmick rather than sound policy.

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The GST is never applied to such essential items as fresh produce and meat, or medications. If most of your income is spent on just the basic, your tax savings will be minimal during this period of federal largesse, which is expected to cost the treasury $1.6 billion.

Once you leave that caveat behind, some of the exemptions are quite puzzling.

The GST is temporarily suspended for some alcoholic beverages, for example, which is something that seems tough to justify from a policy standpoint.

Alcohol isn’t exactly a health product — in fact, as much as I enjoy indulging from time to time, I acknowledge how easily alcohol can be abused and can cause literal harm, whether we’re talking about physical ailments or societal problems linked to drinking.

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Such products frankly should always be taxed.

Then there’s the Kafkaesque maze of requirements to figure out if something is or isn’t GST-exempt.

Say you’re standing in the dietary supplements aisle at a supermarket or pharmacy.

Protein-enhanced snack bars that you and Health Canada consider to be food would quality for a GST break. However, protein-enhanced snack bars that are sold as a weight-loss product don’t qualify.

If you wanted to mix your own protein-enhanced drink, the powdered ingredient is also not GST-exempt — assuming I read and understood the rules correctly.

While plain old candy can be purchased GST-free for the moment, cough lozenges oddly can’t.

If you buy a bag of chips or a chocolate bar from the store, you don’t pay GST … but if you buy the same product from a vending machine, you do.

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If you order for delivery from your favourite pizza place, the meal will be GST free. The delivery also won’t be taxed, as long as the restaurant is providing the service and charged you for it. But if your pizza is arriving via delivery app or some other separate delivery service, then taxes will apply.

The brain-twisting aspects of this tax cut can also be seen outside of food and drink.

If you’re a gamer or a bookworm and buy game software or a book as a physical item, it’s GST-free until mid-February. If you buy the same product for download in electronic form, you still have to pay GST.

And then there were the numerous tweaks taking place in realtime ahead of the tax relief coming into effect.

The list of exemptions, explanations and exclusions kept changing and growing — and this continued until three days after the GST break went into effect.

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I’m pretty sure our reporters were updating some business owners about the latest twists and turns while interviewing them for news stories on the topic.

All of this leads me to ask … why?

I pity the bureaucrats assigned with devising these rules — and I feel ever more for businesses that have to sort through this morass and make sure their cash registers are ringing up the right taxes on the right products and services for two months.

It seems unbelievable that any government could screw up a tax cut, yet the federal Liberals have managed to accomplish this incredible feat.

This entire scheme just screams amateur hour and desperation.

rleong@postmedia.com
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