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TORONTO — Shoppers and businesses across Canada are expressing mixed feeling and showing little enthusiasm as a two-month break from the federal GST took effect Saturday.
Lori Parker, the owner of an independent toy store in Toronto, said the sales tax holiday could be good for business because it makes shopping cheaper for customers, but the measure meant more work for her staff over the holiday season.
“It does give them a break on costs,” she said. “But we knew from the get-go that it would be a lot of work.”
The owner of Treasure Island Toys Ltd. said her shop sells thousands of items and it was not easy to figure out what’s covered with the GST break
“It was very laborious. We spent a lot of time reading and re-reading what was included in the tax break and what was not included,” she said.
“The rules seem, were quite ambiguous, so they were subject to interpretation. We spent a lot of time talking to other retailers and suppliers about how they were interpreting the rules.”
The federal government announced the plan to temporarily waive the five per cent goods and services tax in a bid to help ease affordability concerns during the holiday season.
Provinces with a harmonized provincial and federal sales tax will see the full HST waived.
At Eaton Centre in downtown Toronto, Kishore Basu said he was shopping Christmas gift for his family members and he is not going to change his shopping list due to the GST holiday.
“The GST doesn’t add that much in the end to most of those goods,” he said. “I don’t think it’s significant enough to change spending patterns.”
Basu said he doesn’t this the GST break will be helpful for most people.
“I’m sure it will help some Canadians, but I think the marginal benefit versus what’s added to the deficit isn’t worth it,” he said.
“It’s only for two months and it’s going to come back. It seems to me more like an election ploy than anything else. I think most people see that.”
In Montreal, Patrick Neault, general manager of Raffin Bookstore, said the chain had to shift some staff during the holiday season to make sure the store was compliant.
“We worked kind of hard the last three weeks so that it goes fluidly today and it’s working fine so far,” he said, adding Ottawa’s announcement wasn’t welcoming news when first announced.
But Nault isn’t certain that the benefits for retailers and shoppers will ultimately outweigh the extra work staff had to put in.
“It’s not that much of a deal. It’s like a few per cent (discount) on a transaction. I’m not sure that’s a very strong incentive,” he said.
At a bustling mall in Halifax, Katrina Rose set out early in the day to buy her young daughter’s holiday outfit. She said she waited until the tax break took effect to make some holiday purchases to take advantage of savings.
“My daughter is a huge book lover, so things like books and board games and those regular toys we’d like to get for the holidays I saved until now,” she said in an interview Saturday.
Meanwhile, Jennifer Matthew said she forgot the tax break was starting on Saturday and didn’t factor that into her holiday shopping. She says the tax break on food, alcohol and clothing will help with some savings for her and her two daughters, but won’t bring about a significant amount of savings in the grand scheme of things.
“I don’t think it’s going to put a big dent in my wallet by any means. I don’t think we’ll be able to book that holiday, but like anything every penny helps,” she said.
Her 10-year-old daughter Ruby said she’s excited about the potential savings the break will bring for some hoodies she’s had her eye on.
The tax break is set to run until Feb. 15, 2025, and it applies to dozens of items including restaurant meals, children’s clothing, wine and beer, children’s toys and Christmas trees.
However, product categories eligible for GST relief have plenty of exemptions, with items like food and drinks from vending machines, magazines, clothing for sports activities, and some collectibles and toys not making the cut.
In a press release Saturday, Innovation, Science and Economic Development Canada said Ottawa is doing what it can to help Canadians struggling with their budgets.
Kamal Khera, Minister of Diversity, Inclusion and Persons with Disabilities said in the release that the cuts should help with the added expenses the holiday season often brings.
“With new tax cuts on essentials and holiday expenses, we are helping to reduce costs for families when they need relief the most,” she said in a statement.
Kelly Higginson, CEO of Restaurants Canada, said in the release that she was pleased with the decision to temporarily waive the tax, which should give a boost to sales in the restaurant industry.
This report by The Canadian Press was first published Dec. 14, 2024.
-With files from Joe Bongiorno in Montreal and Cassidy McMackon in Halifax.
Maan Alhmidi, The Canadian Press
