Some small businesses in Calgary say the nationwide GST break has had little impact on sales during the holiday season.
Prime Minister Justin Trudeau announced the proposed affordability measures in November, saying a GST break that would apply to various items would begin in mid-December and last for about two months.
The GST break, which began on Dec. 14 and will end on Feb. 15, applies to several items, including beer, wine, cider, and pre-mixed alcoholic drinks below 7 per cent ABV.
But a Calgary liquor store is saying the tax break is not having a big impact on sales during the busiest time of the year
Andrew Ferguson, owner of Kensington Wine Market in Calgary says the five percent tax break wasn’t enough to sway consumers to purchase more.
“In the end, it was kind of a non-event… it was a relatively normal Christmas…I don’t know if there was any bump we could attribute to the GST holiday,” Ferguson said.
“The surprising thing to me was how few people were motivated by that to purchase more”
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He says the five per cent discount isn’t making a huge difference in the differently priced liquors.
“I think the reality is, especially for nice bottles of wine in the high teens or twenties, if you can afford to buy those, five per cent isn’t going to change that, and if you can’t afford to buy that kind of product, I’m not sure it is enough of a tax break to make that purchase,” Ferguson said.
Beverly Guthrie, owner of Botterl General Store, a convenience store that also sells liquor, says the GST break made minimal difference but doubled her workload.
“My store easily has over 2,000 items, so I individually have to go in there to change it,” she said. “It’s a waste of my time for a two-month period.”
“People across Canada are hurting. The items they are purchasing are purchasing regardless so it makes no difference whatever.”
The Canadian Federation of Independent Business (CFIB) has said a majority of small businesses are opposed to the tax holiday, with only 4 per cent surveyed expecting stronger sales because of the measure.
Federal government estimates suggest that someone spending $2,000 during the tax-free period could save between $100 and $300. The holiday tax break will cost the government an estimated $6.3 billion.