GST holiday gets tepid reception

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This article was published 16/12/2024 (328 days ago), so information in it may no longer be current.

The federal government’s two-month GST/HST holiday, implemented on Saturday, aimed to provide Canadians with temporary financial relief amidst rising costs.

However, reactions from shoppers and Brandon-based business owners reveal a mixed response, with both appreciation and frustration surfacing.

Local shopper Ayobami Adeniji described the initiative as positive but noted its limited impact.

“It’s appreciated, but most major holiday purchases are made between October and November,” she told the Sun on Saturday. “By the time the announcement was made, much of the significant spending — on presents for kids, cooking, and general living expenses — has already been undertaken. We are grateful for the opportunity, but the major spending has been done before we enjoy the holiday.”

Reflecting on a previous holiday season, Adeniji recalled delaying her shopping only to find that many items were sold out, leaving her scrambling to secure decent gifts.

“If I want the same gifts for my kids, I have to start Christmas shopping as early as possible,” she explained, emphasizing the importance of early preparation to ensure a satisfying holiday experience.

The passage of Bill C-78 or the Tax Break for All Canadians Act allows the Government of Canada to declare an array of goods tax-free during a two-month period, which started on Saturday.

The GST holiday covers many food items, such as groceries, prepared meals, snacks, and non-alcoholic drinks like coffee and juice, as well as certain alcoholic beverages under specific alcohol volume limits. Children’s clothing, accessories, some footwear, and diapers qualify, while specialized sports gear does not.

Eligible toys include board games, dolls, and video games for consoles, excluding online-only games. Printed books, scriptures, magazines with limited ads and newspapers are also included.

Tosin Afolabi, another shopper, described the GST holiday as a “welcoming idea” but noted that its impact felt limited given the high cost of goods.

“The struggle is, it didn’t change much,” she told the Sun on Saturday. “Despite the tax break, I still ended up spending over $200 on Saturday, saving only five per cent. It’s good, and some dollars are off, but the truth is, things are more expensive. We didn’t feel the effect like we were supposed to.”

For local businesses, the GST holiday brought logistical hurdles.

Brandon Toy Store owner Amber Hagans told the Sun the GST holiday created a significant challenge for her business, calling it a “logistical nightmare” that has imposed additional costs and operational difficulties.

“I was here with another staff member Friday night until about four o’clock on Saturday morning,” Hagans said on Saturday. “I worked a total of 19 hours on Friday to update the store’s systems.”

Despite the effort, she estimated the updates were about 90 per cent complete.

Hagans explained that the government announced late on Friday evening that participation in the holiday was not mandatory, but after weeks of customers anticipating the tax break, her store felt compelled to proceed.

She pointed out the frustration this created for businesses.

“Customers have the option to submit receipts to the CRA themselves if we don’t follow the holiday, but we felt we had to do it anyway,” she said.

The holiday’s implementation has also affected her sales, particularly with “LEGO sets,” which are only GST-exempt for ages 14 and under.

Regarding the benefits of the holiday to her business, she was unequivocal.

“We had a lineup for hours on Saturday, but it hasn’t brought in sales and It’s a nightmare,” she said. “It’s costing businesses money — people are returning products to get refunds, and we’re losing out on processing fees. I had to pay staff overtime and am down a staff member on the floor to continue updating our systems.”

Hagans added most customers seemed sympathetic, “Ninety-five percent of them think it’s ridiculous and feel sorry for us.”

The entrepreneur emphasized the need for public understanding of the effort businesses are putting into implementing the tax holiday.

Green Spot Home & Garden owner Bernie Whetter expressed a more neutral view.

“I don’t think it’s going to make a big difference,” he said in an interview on Saturday. “At just five per cent, the discount does not seem substantial enough to significantly impact sales.”

However, Whetter acknowledged that “every little bit helps” given the current economic pressures, as customers are looking for ways to stretch their cash further.

Green Spot Home and Garden began applying the discount on Dec. 1, absorbing the cost themselves before switching to the government-led initiative on the official start date, he said.

The transition was seamless for the business, “Our IT fellow just tweaked our system, and it’s been no problem for us to adjust.”

Despite the effort, Whetter noted no noticeable impact on sales or feedback from customers, aside from a few Facebook comments thanking the store for the discount.

Trinity Meat and Food Place co-owner Toye Olaosebikan told the Sun the GST holiday could slightly enhance customers’ purchasing power.

“About 85 to 90 per cent of what we sell doesn’t carry GST because they are foodstuffs,” he explained. Products like tea, snacks, and powdered milk, which are subject to GST, represent only a small fraction of his inventory.

As a result, the GST holiday has not significantly affected Trinity Meat and Food Place’s sales. “We’ve not felt it either positively or negatively,” Olaosebikan said, noting that the impact might become clearer in the coming weeks.

» aodutola@brandonsun.com

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