A person was seen walking along a street in Montreal on Saturday, carrying shopping bags. (Photo by Graham Hughes/The Canadian Press)
Shoppers and businesses across Canada are showing mixed reactions to the recent GST holiday, which started on Saturday. While some see the two-month break from the federal goods and services tax (GST) as a welcome relief, others are less impressed with the temporary measure.
Lori Parker, who owns a toy store in Toronto, recognizes the potential benefits for her customers, as the GST holiday makes items cheaper. However, she mentioned that it also means more work for her team. "It does give them a break on costs," she said but added that managing the logistics of which products are included in the tax break was challenging. "We spent a lot of time reading and re-reading what was included," Parker explained, noting that the rules were ambiguous and led to confusion among retailers.
The federal government introduced the GST holiday to ease affordability concerns, particularly during the busy holiday season. For provinces with harmonized provincial and federal sales taxes, the full HST (harmonized sales tax) is waived.
Despite the potential savings, not everyone is excited about the break. Kishore Basu, a shopper in Toronto, said that the GST on most items doesn't significantly affect the price of goods. "It doesn’t change my shopping habits," he explained. He also expressed skepticism about the holiday's impact, noting that the two-month duration and the return of the GST in February made it seem more like a temporary measure rather than a long-term solution. "It seems to me more like an election ploy," he added.
Retailers, especially those in Montreal, also have mixed opinions. Patrick Neault, general manager of Raffin Bookstore, mentioned that while they worked hard to ensure their store complied with the changes, he wasn't sure the benefits outweighed the extra effort. "It’s like a few percent of a transaction. I’m not sure that’s a strong incentive," he said.
In Halifax, some shoppers, like Katrina Rose, took advantage of the holiday to make their holiday purchases. She specifically saved up for books, board games, and toys for her daughter. However, for others like Jennifer Matthew, the tax break wasn't a significant factor in their spending plans. "Every penny helps, but I don’t think it’s going to make a big difference," she said.
The holiday applies to a variety of products, including restaurant meals, children's clothing, toys, and Christmas trees. However, certain categories are excluded, such as food from vending machines, sports clothing, and some collectibles.
The government, through Innovation, Science and Economic Development Canada, has emphasized that the GST break is part of an effort to assist Canadians with the financial pressures of the holiday season. Kamal Khera, the Minister for Diversity, Inclusion, and Persons with Disabilities, highlighted that the measure was designed to reduce costs for families when they need it most.
The tax break, running until February 15, 2025, is also expected to provide a boost to businesses, particularly in the restaurant sector. Kelly Higginson, CEO of Restaurants Canada, expressed support for the temporary relief, believing it could help increase sales in the industry.
