There is less than a year left before the elections in Canada, and the Prime Minister, the Liberal Justin Trudeau, is sinking in the polls, 20 points behind the Conservative Party. And his response to the serious popularity crisis he faces has been to embrace fiscal populism: this Christmas, The government will abolish VAT on toys, video games, prepared meals, wine, beer, chocolates and sweetshoping Santa remembers when he goes to the polls.
The announcement comes from the New Democratic Party, the center-left party the Liberals have been forced to rely on since Trudeau lost his absolute majority in 2019. The help was part of their demands to support the latest budgets before the elections, in an attempt to “compensate” Canadian citizens for rising inflation of recent years.
More specifically, the program has two components. On the one hand, the government will remove VAT on toys, children’s clothing, video games, “Christmas” food and drink, Christmas trees, books, cakes, prepared meals and restaurants. The VAT is 13% in Ontario (where Toronto is located), 15% in the small provinces in the far east of the country and only 5% in the rest of the immense Canadian territory.
Added to this is the fact that all people who declared less than $150,000 in income in their last tax return, or around 19 million, You will receive a check for 250 Canadian dollars (171 euros) next April. In total, the government calculated a cost of 1.6 billion dollars (1,100 million euros).
Trudeau decided the expense was worth it because its deficit is relatively small according to international standards: only 1.4% of its GDP. But the country accumulates a debt of 107% of its GDPand the opposition has already decided to attack him for spending money to “bribe” citizens instead of lowering the price of housing, one of the country’s main problems. Canada is suffering from the same crises as the rest of the world: the question is whether offering cheaper wine and video games to citizens for a few months will help stop the anti-government wave that has marked every election this year.
