The federal government's two-month break on the GST ends Saturday, and while a small percentage of restaurants and other businesses saw sales increase, most saw no overall change. There were also complaints about the work needed to implement the change. Image via CBC News


February 15, 2025 Tags:

Ottawa’s temporary GST and HST holiday aimed to boost consumer spending by offering a tax break. While some shoppers benefited, many small businesses found the initiative more of a hassle than a help.

Confusion Over Tax Exemptions

The two-month tax break, running from December 14 to February 15, was introduced during the busiest shopping season. However, it led to confusion among customers and additional stress for business owners.

“It just caused more misunderstandings,” said Cole Thorpe, owner of Prairie Proud in Saskatoon. “People assumed it applied to everything.”

Limited Impact on Sales

Despite the government’s intentions, the policy didn’t significantly boost small business sales. According to the Canadian Federation of Independent Business (CFIB), only 5% of small businesses reported an increase in sales. Meanwhile, 70% saw no real change.

Ryan Mallough, CFIB’s vice president of legislative affairs, noted that the tax break looked promising on paper but didn’t work well in practice. “For many, it was just an extra burden during an already hectic season,” he said.

Challenges for Retailers

The biggest challenge was implementation. Many businesses had to manually review their inventories to determine which products qualified. Some spent hundreds of hours checking each item, while others paid IT professionals over $1,000 to update point-of-sale systems.

Despite the challenges, a few retailers did see some benefit. Quentin Nordick, owner of Quentin’s Comics and Toys in Saskatoon, noticed a slight uptick in sales.

“Customers were really responsive,” he said. “A few even mentioned that the tax break was the reason they made a purchase.”

Mixed Results for the Hospitality Sector

The hospitality industry saw the most gains, with 15% of businesses reporting increased sales. However, not all were impressed.

At High Key Brewing in Saskatoon, taproom manager Joel Kennedy hoped the tax break would encourage more spending. Unfortunately, the results were disappointing.

“We expected more people to come out and spend, but it didn’t make a huge difference,” he said.

Concerns Over Reversing the Tax Break

Now that the GST holiday is ending, businesses must adjust their systems once again. Many worry that customers may perceive the return of sales tax as a price increase, potentially affecting future spending.

While the initiative had some success, small business owners hope that future tax policies will be simpler to implement and more beneficial to their bottom line.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

You may also like

Markets Brace for Turbulence and Recession Fears as Liberation Day Approaches

Investors are on edge as Liberation Day, set for April 2, nears. As the year's first quarter ends on a....

Tencent Invests €1.2B in Ubisoft Spin-Off to Expand Gaming Empire

Chinese tech giant Tencent has made a €1.2 billion ($1.25 billion) investment in a newly formed Ubisoft subsidiary, securing a....

Trump’s Auto Tariffs Hit Canada Hard: A Trade War Unfolds

The U.S. has imposed a 25% tariff on finished vehicles imported into the country, marking one of the most severe....

Quebec Budget 2025 -2026 Fights Trump Tariffs But Sinks Deeper Into Debt

Quebec's finance minister, Eric Girard, has unveiled a historic $165.8-billion budget, aiming to strengthen the province’s economy in response to....

Samsung TV Pioneer Han Jong-Hee Passed Away at 63

Samsung Electronics has lost one of its key leaders. Han Jong-Hee, the co-CEO who played a major role in shaping....

Trump Plans New Tariffs for Vehicles & Pharmaceuticals, Near Future

U.S. President Donald Trump has announced plans to impose tariffs on vehicles and pharmaceuticals, further expanding his aggressive trade policies.....

Key Business Events to Watch in Canada This Week

This week brings several major developments in the Canadian business world. From political campaigns to economic reports, here are the....

Hudson’s Bay Begins Liquidation, But Six Stores Are Spared

Hudson’s Bay, Canada’s oldest company, has received court approval to start liquidating most of its stores. The Ontario Superior Court....

U.S. Tariffs Could be an Uphill Battle for Canada’s Greenhouse Industry

A fresh wave of U.S. tariffs on Canadian imports has sent shockwaves through Canada’s greenhouse sector, which heavily depends on....

Google’s $32B Wiz Deal: A Game-Changer for Cloud Security

Google has announced its biggest-ever acquisition, agreeing to buy cybersecurity firm Wiz for $32 billion in cash. This massive deal....

PepsiCo To Acquire Poppi to Expand in Healthy Soda Market

PepsiCo announced on Monday that it will acquire the prebiotic soda brand Poppi for $1.95 billion. The move comes as....

Hudson’s Bay May Start Its Stores Liquidation As Early As Tuesday

Toronto – Hudson’s Bay, the retail giant, is battling for survival as it seeks court approval to begin liquidating its....