Cost Estimate of the Removal of GST from Residential Energy Use (Revised)

Get the report
Cost Estimate of the Removal of GST from Residential Energy Use.pdf

Summary
This report is a response to a motion adopted by the House of Commons Standing Committee on Finance to estimate the financial cost of private Members’ bills and motions on the Order of Precedence in the House of Commons. Motion M-230 was placed on the Order of Precedence on 11 April 2019 and states that the government should remove the Goods and Services Tax (GST) from home energy bills.

The PBO estimates that the removal of GST from residential energy use will cost the federal government $1.52 billion in the 2019-20 fiscal year, rising to $1.63 billion annually in 2024-25.

Cost of GST Rebate on residential energy use
$ billions
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Total cost 1.52 1.55 1.57 1.59 1.62 1.63
Source : Parliamentary Budget Officer, Canada Revenue Agency GST/HST Calculator, National Energy Use Database, National Energy Board’s Supply and Demand Projections.

The removal of GST from residential energy use will result in savings for households. The PBO estimates that removing the GST from residential energy use would help households save an average of $121 annually beginning in the 2019 calendar year. However, those savings will largely depend on the residential energy mix.