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Commonwealth_ The Liberal government’s two-month GST reduction and $250 payment plan for working Canadians have drawn significant public criticism, according to a Nanos Research survey. Deputy Prime Minister and Finance Minister Chrystia Freeland announced the release of the government’s fall economic update on December 16, a day before the House of Commons recesses.
The GST cut, starting Saturday, will cost $1.6 billion, while the $250 payments in April will cost $4.68 billion, totalling $6.28 billion. Public sentiment toward these measures is largely negative. The survey found that 43% of Canadians view the $250 payments as a “very poor idea,” with only 6% rating them “very good.” Similarly, 32% consider the GST reduction a “very poor idea,” while only 12% believe it is “very good.” Most respondents expressed a preference for reallocating the funds to other priorities (40%) or reducing the deficit (43%), leaving only 12% supporting the current plan.
Freeland has declined to confirm whether the government remains on track to meet its fiscal targets, which include keeping the 2023-24 deficit at or below $40.1 billion, reducing the debt-to-GDP ratio by 2024-25, and maintaining deficits below 1% of GDP by 2026-27. Parliamentary Budget Officer Yves Giroux has raised concerns about the government’s ability to adhere to these anchors.
Political complications are also delaying the policies’ implementation. The House of Commons has approved the GST reduction, but the NDP, advocating for broader eligibility criteria, has withheld support for the $250 payments. This opposition leaves the cheques unapproved, adding to Freeland’s challenges ahead of her economic update. Procedural disputes in the House of Commons have further complicated the timing of the update. Freeland’s statement emphasized her commitment to outlining an economic plan focused on improving middle-class prosperity. However, Nik Nanos, the founder of Nanos Research, described the policies as “political duds,” implying that they represent a government that appears to be nearing the end of its term.
The negative reception of these measures highlights broader public dissatisfaction with the government’s economic direction. Canadians are skeptical about its fiscal discipline and question the effectiveness of targeted relief measures amid inflation and economic uncertainty. Freeland’s upcoming update will need to address these criticisms and present a compelling vision for long-term economic stability.
Parliamentary Budget Officer Yves Giroux warned in October that the government is likely to miss its deficit target for the 2023–24 fiscal year, projecting a deficit of $46.8 billion, significantly higher than the $40 billion target the government set. One contributing factor is the cost of the GST reduction, which is expected to reduce federal revenue by $1.46 billion. However, this cost could increase to $2.72 billion if provinces with harmonized sales taxes (HST), such as Ontario, Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick, need to be compensated for the lost revenue. Finance Minister Chrystia Freeland has not yet confirmed whether the HST agreements will trigger automatic compensation if any GST changes reduce provincial sales tax revenue by more than 1 percent.
The House of Commons has approved the GST policy, despite its potential to worsen the deficit. However, the proposed $250 cheques to most working Canadians in April have faced resistance from the NDP, who have demanded that more people qualify for the payments. The government’s economic policies are coming under increasing scrutiny, with critics arguing that the government’s financial management is straining Canada’s economy during a period of inflation and uncertainty. Freeland will need to address these concerns in her upcoming economic update on December 16.
