What’s Happening and Why It Matters
Have you heard about the federal government’s latest announcement? Starting December 14th and running until February 15th, Canadians won’t need to pay GST on select retail items. This includes essentials like children’s clothing, footwear, diapers, newspapers, books, and a variety of beverages and foods. On top of that, there’s a $250 “working Canadians rebate” coming in spring 2025.
The government is calling this a tax holiday to ease financial pressure, but critics are branding it a political move to win support. So, what does it really mean for you? More importantly, how can you turn this brief tax relief into an opportunity to improve your financial future? Let’s dive into practical ways to make the most of this unique situation.
Is It a Trick, a Holiday, or a Real Opportunity?
Here’s the thing: any tax break is welcome, but it doesn’t come free. The money saved from this GST relief and the $250 rebate ultimately comes from somewhere—our taxes. So, while this initiative might ease the financial burden for now, it’s wise to think long-term. Instead of seeing it as “extra cash,” treat it as a stepping stone to achieve your financial goals.
How to Use This GST Relief Wisely
1. Boost Your RRSP Contributions
The GST relief period overlaps with RRSP season, which ends on February 28th. This is a golden opportunity to grow your retirement savings while benefiting from a bigger tax refund in 2024. Here’s how:
- Calculate the GST savings from your holiday shopping and set that amount aside.
- Contribute those savings to your RRSP before the February deadline.
- When you file your taxes, use your refund to make an additional RRSP contribution for next year.
Steps to Take:
Even small contributions can make a big difference over time. If you’re new to RRSPs, consider opening an account with your bank or through an online investment platform. Many offer tools to calculate your contribution room and potential tax savings.
2. Pay Down High-Interest Debt
Do you have credit card debt or other high-interest loans? Use the GST savings and your $250 rebate to tackle these balances. Credit card interest can eat up your budget fast, so paying it down is one of the smartest financial moves you can make.
Are you drowning in debt and eager to break free? You’re not alone. Countless individuals have successfully reached financial freedom by adopting practical strategies. Check out the following actionable steps that can help you pay off debt efficiently and make your life debt free. Strategies for Paying Off Debt Efficiently
- Track your GST savings and the $250 rebate.
- Apply these funds to your highest-interest debt first (typically credit cards).
- Set up a plan to avoid racking up new debt—consider a budgeting app offered by your bank to help track spending.
Steps to Take:
3. Build an Emergency Fund
If your debt is under control, consider using this financial relief to start or grow your emergency fund. Life is unpredictable, and having three to six months’ worth of expenses saved can be a lifesaver.
- Open a Tax-Free Savings Account (TFSA) if you don’t already have one.
- Deposit your GST savings and rebate into this account.
- Automate future contributions to make saving a habit.
Steps to Take:
Many Canadian banks offer free budgeting tools that can help you identify areas to save, making it easier to build your emergency fund.
4. Invest in Your Family or Skills
GST-free children’s items and books present an opportunity to invest in your family’s needs or your personal development. For example:
- Stock up on kids’ clothing or school supplies during the holiday season.
- Buy books to enhance your knowledge or learn a new skill.
- Take advantage of any deals on tools or materials that support a side hustle or hobby.

Practical Ideas:
“Remember, investing in yourself or your family often pays dividends in the long run.
I look at education like food, water, air, exercise. You need a constant supply.
You also don’t breathe once a year, right? So why do you only read one book a year? It doesn’t make sense. Education is critical to your survival.
The reason is not only personal growth, as Benjamin Franklin said:
“If a man empties his purse into his head no one can take it away from him. An investment in knowledge always pays the best interest.”
Education is an investment in yourself. One that can pay you more dividends than anything you will ever invest in.” Darius Foroux.
What Not to Do
It’s tempting to treat the GST relief and rebate as a windfall and splurge on things you don’t need. Avoid falling into this trap. Every dollar saved or wisely spent during this period can have a positive ripple effect on your future.
Conclusion: Turn This Holiday into a Financial Springboard
Whether you view the GST relief as a tax trick or a holiday, it’s ultimately up to you to make the most of it. By saving on GST and receiving the $250 rebate, you have a chance to take meaningful steps toward your financial goals.
Here’s a recap of what you can do:
- Contribute to your RRSP for immediate and future tax benefits.
- Pay down high-interest debt to free up your budget.
- Start or grow an emergency fund with your TFSA.
- Invest in essential items or your personal growth.
Key Takeaways:
Small, smart moves today can lead to big rewards tomorrow. So, embrace this opportunity, take control of your finances, and give your future self something to celebrate!
In my E-books (“Water Barrel” and “The Balance”) I discuss simple methods to live sensibly for today, take charge of your financial affairs, and invest safely for the long term. For more information please visit David Penna Amazon.
Disclaimer for ManageYourMoney.ca
The information provided on ManageYourMoney.ca is intended for educational and informational purposes only. It should not be taken as financial advice. The opinions shared are those of the authors and are meant to encourage sensible financial habits and decision-making. We recommend that you do your own research or consult a certified financial advisor before making any financial or investment decisions. All investments come with risks, and there is no guarantee of success. Past performance is not a reliable indicator of future results. Always consider your personal financial situation and risk tolerance before pursuing any investment opportunities.
As always, we are not a qualified financial advisors. We just relate financial management to our own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of ours came from expensive experiences. Neither Jim nor David provide advice on any specific investments.
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