NDP would remove GST on essential goods and services, such as heating

Photo: Sean Kilpatrick archives The Canadian Press “We want to expand [the exemptions] to recognize that Canadians are going through a difficult time and the government should not be making money off our everyday essentials,” NDP Leader Jagmeet Singh said Thursday.

David Baxter – The Canadian Press in Ottawa

Posted yesterday at 5:37 p.m.

• Canada

The New Democratic Party (NDP) would eliminate the GST on “essential” goods and services, such as heating and baby diapers, if it formed government after the next election, party leader Jagmeet Singh said Thursday.

The announcement comes as the cost of living played a central role in several provincial elections this fall and the issue appeared to be a key factor in the U.S. presidential election, which ended last week with Donald Trump winning.

The NDP says the “essential” goods and services that would be exempt from the federal tax include: home heating, meals and snacks purchased at grocery stores, internet and cellphone bills, diapers and clothing for children under 15.

According to a senior NDP official who was not authorized to speak publicly about the proposal, the party estimates the tax breaks would save the average Canadian household about $500 a year.

The policy would cost the federal government about $5 billion in lost tax revenue, according to the official. The NDP says it would recoup that revenue through a new “excess profits” tax on big business.

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The NDP had already tried to permanently eliminate the Goods and Services Tax (GST) on residential heating last November by introducing a motion in the House of Commons. The motion was defeated, with only the NDP and the Green Party voting in favour.

Some provinces already exempt products from their sales tax. In Quebec, for example, baby diapers and children's training pants are exempt from the provincial sales tax. In Ontario, the provincial tax does not apply to children's clothing and some prepared grocery products. Saskatchewan, however, added these items to its list of taxed products in 2017.

“We want to expand [the exemptions] to recognize that Canadians are going through a difficult time and that the government should not be making money off of our everyday essentials,” NDP Leader Jagmeet Singh said Thursday in a speech to the Canadian Club of Toronto.

Corporate Taxes ?

In the 2021 election, the NDP campaigned on a promise to raise the corporate tax rate to the 2010 level of 18 per cent, from the current 15 per cent. Singh wouldn’t say Thursday whether that policy remains his, but in an informal chat with a representative of the Canadian Club at the end of his speech, the NDP leader said he wanted to cut taxes for small and medium-sized businesses to help them grow.

For much of the current minority Parliament, the NDP has supported the Liberals through a “support and confidence agreement.” Under that agreement, the Liberals agreed to work on NDP priorities, such as dental care and pharmacare, in exchange for NDP support on confidence votes in the Commons to avoid bringing down the government.

Mr. Singh withdrew from that agreement in early September, and the next election call is now largely in the hands of the NDP.

The Conservatives have tried to bring down the minority government twice since that partnership collapsed, with unsuccessful non-confidence motions that both the NDP and Bloc Québécois voted against.

But the Bloc says it is now ready to bring down the government in the House since the Liberals missed Yves-François Blanchet’s deadline to pass two key measures: increasing old age security benefits for those aged 65 to 75, and protecting supply management in future trade negotiations.

It is likely that to bring down the minority Liberal government, a non-confidence motion would need to garner the support of the Conservatives, Bloc and NDP combined.

The fixed election date is set for October 20, 2025, but it could be held earlier if the Liberals lose support in the House of Commons.