GST holiday draws mixed reviews From normal sales numbers to supply chain hassles, retailers uncertain tax break giving them any boost at all By: Gabrielle Piché Posted: 2:00 AM CST Tuesday, Dec. 24, 2024

Hey there, time traveller!
This article was published 24/12/2024 (571 days ago), so information in it may no longer be current.

The early hours of Dec. 14 were, for Clinton Skibitzky, a mad scramble.

He and staff raced to change their point-of-sale system, effectively removing the GST sales tax from certain items, before opening Across the Board Game Café to the public. More than a week later, he’s finding it hard to tell whether the tax break has made a difference to the Winnipeg business.

He’s not alone.

“Our sales are what they were,” said Skibitzky, Across the Board’s co-owner. “(The exemption) can’t hurt, but I don’t think there’s been a strong effect.”

The federal Liberal government declared a GST/HST “holiday” on a swath of goods from Dec. 14 to Feb. 15, 2025. Beer and wine, children’s toys and clothing, Christmas trees and video game consoles are among the items affected.

For Manitobans, a GST removal means taking off a five per cent federal tax. Ottawa deemed the move an affordability measure.

Several local retailers the Free Press spoke to Monday said they hadn’t noticed a change in sales since the tax break came into effect. Although some are seeing record sales, they can’t be sure a lack of GST is the instigator.

Kari England, owner of Toad Hall Toys, considers her numbers “pretty much even with last year.”

She had to manually adjust her store’s point-of-sale system ahead of opening Dec. 14. Her suppliers are questioning how to prepare for the new year.

“Maybe I buy in January, but I don’t pay ’til May. Well, then they have to charge me the GST,” England explained. “It’s more a headache for everybody.”

Neither the owners of Bison Books, The Forks Trading Company nor Piazza De Nardi have tracked an abnormal sales increase following the GST holiday.

The tax break has led up to Christmas, a period known for being retail’s busiest season.

West Coast Kids has clocked a “record-breaking holiday,” but it’s unclear how much the GST break has played a role, said chief executive Robyn Dashefsky-Moar.

That stance was echoed by Jessie Halliburton, co-owner of Sobr Market.

“It appears that many Manitobans held off on gift-giving purchases until the GST holiday began.”–John Graham

Dashefsky-Moar pointed to a combination of customers waiting for sales like Black Friday and the GST break to make purchases.

“Unfortunately, they thought there was huge savings (with the GST holiday) and they ended up getting small savings,” Dashefsky-Moar said.

Upon Dec. 14’s arrival, West Coast Kids patrons brought in recent receipts and asked for the GST to be refunded. This didn’t happen in Manitoba, Dashefsky-Moar noted — Ontario and Quebec stores were the main locales.

There’s been confusion, she added. Some customers believe everything in West Coast Kids falls under the GST break umbrella; according to the rules, car seats and some toys qualify.

Staff refunded the GST on eligible items last week.

“When we did it, it was like, ‘Here’s $1 back,’” Dashefsky-Moar said. “I wouldn’t say (it’s), in the end, beneficial.”

Some customers waited for the GST break before purchasing goods, she added.

Tom De Nardi, co-owner of specialty grocery store Piazza De Nardi, encouraged one client to wait until Dec. 14 to purchase roughly $5,000 of wine.

“Five per cent (off) on $5,000, that’s a little bit of cash,” he said.

Otherwise, De Nardi said he hasn’t noticed a change in sales. Rather, he’s lost money — suppliers who were supposed to pass along the GST break didn’t, De Nardi said.

“I guess they’ll be responsible for remitting back to the government,” he added. “We didn’t think that was fair ball.”

Meantime, some businesses may use the tax break as a chance to raise their prices, De Nardi warned.

Despite some local retailers’ experiences, the Retail Council of Canada is hearing of “stronger than anticipated sales” from its members. The council represents upwards of 54,000 storefronts nationally.

“It appears that many Manitobans held off on gift-giving purchases until the GST holiday began,” said John Graham, director of government relations for the Prairies.

Shoppers will seemingly wait to purchase if there are opportunities to save, Graham added, noting some must find ways to stretch their budgets amid a higher cost of living.

One customer delayed buying a book that was “on the expensive end” until the GST was removed, said Aimee Peake, owner of Bison Books.

Manitobans buying bigger ticket items like video game consoles see larger savings during the tax break. Boxing Day may be busier this year as a result of the government initiative, Graham predicted.

He doesn’t expect the GST exemption to have as strong an effect on sales in January and February, a historically cool timeframe for most retail.

gabrielle.piche@winnipegfreepress.com