Canada is planning a one-time grocery benefit but these tax-free items always save you money

The federal government is planning a one-time grocery benefit and a GST/HST credit increase.

But you can save money at grocery stores in Canada now because some groceries are always tax-free!

It was recently announced that Canadians could get a new grocery benefit and a GST/HST credit increase this year.

With the Canada Groceries and Essentials Benefit, a one-time payment to tackle food inflation would be given to more than 12 million Canadians.

It would be worth 50% of the current annual GST/HST credit, which works out to between $200 and $700.

With the increase to the GST/HST credit, payments would be 25% higher for the next five years. That works out to between $600 and $1,800 per year.

You pay GST or HST on a lot of products purchased at grocery stores in Canada.

But the federal government considers "basic groceries" to be zero-rated, which means there is no GST or HST on those items.

You might not know that some groceries are tax-free in Canada, or you might not realize just how many products are included in the "basic groceries" category.

If you shop strategically, these zero-rated items could help you save on your grocery bill.

So, here are the tax-free groceries in Canada.

Bread

Bread products like bagels, English muffins, croissants, scones, tea biscuits, bread rolls, tortillas, taco shells, and soft pretzels that don't have sweetened fillings or coatings are tax-free in Canada.

Milk

You don't pay GST or HST on most milk products. That includes unflavoured whole, skimmed, or partly skimmed white milk in all serving sizes and packages.

Flavoured milk, like drinkable yogurt, is only tax-free when sold in pre-packaged multiples of single servings or in containers that are bigger than a single serving.

A beverage that's less than 600 millilitres is a single serving, according to the federal government.

Eggs

There is no tax on eggs in Canada.

Fruits and vegetables

Fresh, frozen, canned and vacuum-sealed fruits and vegetables are tax-free.

Mixed, cut vegetables that are packaged and promoted as a "stir-fry" or "chop suey mix" and mixed vegetable sprouts are also zero-rated basic groceries.

Salads

While prepared salads are taxable, a package that contains the ingredients for a salad — like lettuce, croutons and dressing in separate containers — but isn't pre-mixed is tax-free.

Meat

Fresh meat, poultry and fish are tax-free in Canada.

Frozen pizza

Frozen pizza is tax-free because even though it's a pre-packaged food you're not making yourself, it requires enough additional preparation before it can be eaten.

Frozen sandwiches

Since frozen sandwiches aren't ready-to-eat items and you have to do additional preparation, they're considered basic groceries and are tax-free.

Savoury pies

Savoury pies and meat pies are tax-free.

Dough

Doughs are tax-free, including pie shells, vol-au-vent, phyllo, puff pastry, pizza dough, cookie dough, and more products.

Crackers

Most crackers and related products are tax-free, except for graham crackers.

These are the zero-rated cracker items:

• soda crackers
• salted crackers
• table water crackers
• cream crackers
• rice crackers
• crispbread
• snacking crackers (including vegetable, bacon or cheese flavoured)
• wheat thins
• toasts
• breadsticks
• rusks
• unsweetened rice cakes

Cereal

Breakfast cereals are tax-free in Canada. That includes granola products sold as breakfast cereals.

Also, products sold as breakfast cereals are zero-rated basic groceries, even if they're similar to taxable snacks.

Baking items

You can get baking ingredients with no added tax, including:

• bulk industrial chocolate
• chocolate chips
• baker's chocolate
• liquid chocolate icing
• edible cake decorations packaged and sold as cake decorations
• fondue chocolate
• chocolate spread
• Angelica and cocktail cherries

Condiments

Condiments like ketchup, mustard and relish are tax-free at grocery stores in Canada.

Popcorn

Unpopped popcorn kernels, including microwave popcorn kernels, are tax-free. The popcorn kernels can be salted or otherwise.

Cereal bars

Cereal bars and muffin bars that are sold in boxes containing six or more bars are tax-free.

That includes bars made from commercial cereals you'd find in the cereal aisle and other ingredients like fruit.

Cereal bars and muffin bars usually have ingredients similar to granola bars (like a mixture of cereals and honey or syrup). These bars may have a muffin-like texture or a fruit filling in a baked crust.

Nuts and seeds

Unsalted nuts or unsalted seeds are zero-rated.

Also, mixtures of nuts in their natural state (not seasoned, roasted or shelled) are tax-free. That doesn't include snack mixtures like trail mix.

Meal replacement and nutritional supplement bars

Bars that qualify as meal replacements or nutritional supplements are considered to be zero-rated basic groceries except when sold from a vending machine.

That also includes energy and protein bars that are sold as meal replacements or nutritional supplements.

Coffee

Whole coffee beans are tax-free, but ground coffee isn't.

Water

Plain bottled water sold in packs of two or more single-serving bottles or in a bottle that exceeds a single-serving is tax-free.

Also, syrups, crystals, powders and flavourings for making beverages are tax-free, except when fruit-flavoured.

Juice

Non-carbonated fruit juice and fruit-flavoured beverages with 25% or more natural fruit juice are tax-free.

But the product must be 600 millilitres or more, or packaged in multiples that are each less than 600 millilitres.

This article's cover image was used for illustrative purposes only.