Some Calgary small businesses are criticizing Ottawa’s proposed GST holiday, saying it could not only add additional burdens on their staff, but could also have little impact in helping Canadians deal with the rising cost of living.
The federal government introduced the bill in the House of Commons on Wednesday afternoon, and it is expected to be debated and passed late Thursday.
The two-month tax break covers dozens of items commonly purchased over the holidays, including children’s clothes and toys, video games and consoles, Christmas trees, restaurant and catered meals, wine, beer, candy and snacks.
In southeast Calgary, Christmas music plays at European Market Deli and Produce ahead of the holidays, but one holiday the grocer isn’t looking forward to is the one on GST.
“Some small businesses have 20,000 SKUs, not all those are GST applicable, but a vast majority are,” says owner Darren Hollman. “For a lot of businesses to do that manually, it’s going to take up a lot of time.”
“It’s man power and they are not going to get reimbursed for the amount of hours taking out of their time or paying an employee to do that.”
Hollman isn’t the only one with concerns, the Canadian Federation of Independent Business (CFIB) says a majority of small businesses are opposed to it, with only 4 per cent surveyed expecting stronger sales because of the measure.
Plantation Garden Centre in northwest Calgary is not expecting a significant bump in sales because of the move.
“Traditionally most people buy their Christmas trees this coming weekend, the weekend after and some the weekend after that,” says owner Colin Atter. “By then it’ll be too late.”
“I don’t think many people want to risk not getting a tree to save between $5 and $10.”
Atter says the holiday would also add additional administrative burden for his business since they would have to change their point-of-sale system to reflect the holiday.
It’s why the CFIB is asking the federal government to provide at least a $1,000 credit to affected small businesses’ GST/HST accounts to cover those administrative costs. They would also like to see the Canada Revenue Agency (CRA) to forgive any mistakes made as a result of this change.
“If you are going to have a knee jerk reaction and send something up that, in my opinion is a political charade, then I feel like the small businesses should be compensated,” says Hollman.
Conservative Leader Pierre Poilievre says his party will vote against the legislation to remove GST off a slew of items, calling the tax break inflationary and claiming it would raise the cost of living.
The NDP only agreed to support the bill after the Liberals separated the GST break from a promise to also send $250 to most working Canadians in the spring.
The tax holiday will come into effect on Dec. 14 and would end on Feb. 15 of next year.
With files from The Canadian Press