‘Every little bit helps’: Shoppers embrace GST holiday

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This article was published 14/12/2024 (322 days ago), so information in it may no longer be current.

Bruce and Amber Kakewash were among the Manitobans who waited until Saturday to begin buying some Christmas gifts on their lists to take advantage of a two-month federal GST holiday.

The couple, from the Interlake community of Fisher River Cree Nation, picked up presents for their children as the tax break took effect on a range of items, including some kids’ toys, to mixed reviews.

“We only got tax-free on some items, not all items,” Bruce Kakewash said, while the couple unpacked a shopping cart outside a busy Toys “R” Us store in the Polo Park area around lunchtime Saturday.

“It helps the pocket, for sure. Every little bit helps, especially for low-income people.”

The federal government has paused the five-per-cent goods and services tax until Feb. 15 to offer a bit of financial relief to Canadians pinched by increased living costs.

The break applies to dozens of goods purchased in-store or online, including prepared foods such as vegetable trays and sandwiches, restaurant meals, snacks, coffee, tea, beer, wine, children’s clothing, diapers, car seats, video games, books, newspapers and Christmas and Hanukkah trees.

Ineligible items include children’s clothing for sports activities, pet food, food and drinks sold in vending machines, and edible cannabis products.

Winnipeg couple Adam and Kim Cudal welcomed the tax holiday, although it came too late for most of the Christmas toy purchases for their children.

“We’ve got most of it done already, so it was just a few things that we had to get (Saturday),” Adam Cudal said outside the Toys “R” Us, where the couple bought gifts for other children in their family. “It would have been nice if the (tax holiday) was sooner.”

Families appear to be the ones who will benefit the most, Kim Cudal said.

“A lot of people who don’t have kids aren’t going to see the same benefits,” she said.

Barb Heinrichs, who also welcomed the tax break, said it didn’t motivate her purchases of gifts for her grand-nieces and grand-nephews.

“For a lot of families, I’m sure it’s important. I think at this time of year it makes people feel a little bit better,” she said. “I’d be more interested in lowering the food costs. I certainly think food would be more important.”

A family who spends $2,000 on qualifying goods over the two-month period will pay $100 less GST, the federal government said.

The harmonized sales tax has been paused in five provinces that have it (Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island).

Ottawa said families will save an extra $160 in provinces where the HST has also been slashed.

GST savings should be automatic at the checkout. If people have been charged GST on a product that qualifies for the break, they should request a refund of the tax from the supplier or retailer, the federal government said.

Some small business owners told the Free Press the tax holiday is a headache amid the busiest shopping period of the year. They said they had to manually change the tax status of hundreds of items to remove the GST.

The Canadian Federation of Independent Business asked consumers to be patient with small businesses who scrambled after being given only two weeks to prepare.

“Given the confusing set of rules and lack of time, it will be nearly impossible for most retailers to implement this right,” CFIB president Dan Kelly said in a news release.

“This temporary tax change has created brand new tax categories that have never existed before, including differential sales tax rates on toys marketed at adults or children, drinks based on their percentage of alcohol or collectible dolls versus dolls for play.

“Consumers will bring their own interpretation, expecting part-time clerks and store owners to have become sudden tax experts on rules that even (the) CRA is struggling to sort out.”

Rechie Valdez, the federal minister of small business, acknowledged the concerns Sunday, but noted there are guides available to business owners online and a hotline businesses with questions and concerns can call.

“We provided small businesses approximately three weeks to implement these changes, and it’s been mixed,” she told the Free Press in an interview.

The Canada Revenue Agency will take a “practical approach” to looking at future audits of small businesses who might have made mistakes in their rush to change price tags.

“If you’ve done everything that you can possibly do to comply with the legislation, they won’t be the focus of any compliance actions in future,” Valdez said.

The situation comes amid a Canada Post strike that has forced some small businesses to temporarily halt deliveries.

“The holiday season often brings significant expenses for many Canadians. With new tax cuts on essentials and holiday expenses, we are helping to reduce costs for families when they need relief the most,” federal Diversity, Inclusion and Persons with Disabilities Minister Kamal Khera said in a news release, while promoting the GST holiday in Mississauga, Ont., on Saturday.

The minority Liberal government’s tax holiday passed with the backing of the NDP. Conservative Leader Pierre Poilievre, whose party voted against the bill, has said the measure is a “temporary two-month tax trick,” not a tax cut.

The Bloc Québécois, which also opposed the bill, accused the Liberals of trying to buy votes ahead of the next general election, which must be held on or before Oct. 20.

Valdez wouldn’t say if the holiday could possibly be extended or reintroduced at a later date.

“I think it’s important. We’ve given (Canadians) two months between now and Feb. 15, which is at least going to tide them over right through to Valentine’s Day, and I think we’re going to continue to listen and be there for small businesses and Canadians,” she said.

The federal government’s fall 2024 economic statement is set to be released Monday.

— With files from Malak Abas

chris.kitching@freepress.mb.ca