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Canadians have mixed feelings to federal government鈥檚 2-month GST holiday

鈥淚t鈥檚 only for two months and it鈥檚 going to come back鈥
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Shoppers take advantage of Black Friday deals in Montreal on Friday, Nov. 29, 2024. THE CANADIAN PRESS/Christinne Muschi

Shoppers and businesses across Canada are expressing mixed feeling and showing little enthusiasm as a two-month break from the federal GST took effect Saturday.

Lori Parker, the owner of an independent toy store in Toronto, said the sales tax holiday could be good for business because it makes shopping cheaper for customers, but the measure meant more work for her staff over the holiday season.

鈥淚t does give them a break on costs,鈥 she said. 鈥淏ut we knew from the get-go that it would be a lot of work.鈥

The owner of Treasure Island Toys Ltd. said her shop sells thousands of items and it was not easy to figure out what鈥檚 covered with the GST break

鈥淚t was very laborious. We spent a lot of time reading and re-reading what was included in the tax break and what was not included,鈥 she said.

鈥淭he rules seem, were quite ambiguous, so they were subject to interpretation. We spent a lot of time talking to other retailers and suppliers about how they were interpreting the rules.鈥

The federal government announced the plan to temporarily waive the five per cent goods and services tax in a bid to help ease affordability concerns during the holiday season.

Provinces with a harmonized provincial and federal sales tax will see the full HST waived.

At Eaton Centre in downtown Toronto, Kishore Basu said he was shopping Christmas gift for his family members and he is not going to change his shopping list due to the GST holiday.

鈥淭he GST doesn鈥檛 add that much in the end to most of those goods,鈥 he said. 鈥淚 don鈥檛 think it鈥檚 significant enough to change spending patterns.鈥

Basu said he doesn鈥檛 this the GST break will be helpful for most people.

鈥淚鈥檓 sure it will help some Canadians, but I think the marginal benefit versus what鈥檚 added to the deficit isn鈥檛 worth it,鈥 he said.

鈥淚t鈥檚 only for two months and it鈥檚 going to come back. It seems to me more like an election ploy than anything else. I think most people see that.鈥

In Montreal, Patrick Neault, general manager of Raffin Bookstore, said the chain had to shift some staff during the holiday season to make sure the store was compliant.

鈥淲e worked kind of hard the last three weeks so that it goes fluidly today and it鈥檚 working fine so far,鈥 he said, adding Ottawa鈥檚 announcement wasn鈥檛 welcoming news when first announced.

But Nault isn鈥檛 certain that the benefits for retailers and shoppers will ultimately outweigh the extra work staff had to put in.

鈥淚t鈥檚 not that much of a deal. It鈥檚 like a few per cent (discount) on a transaction. I鈥檓 not sure that鈥檚 a very strong incentive,鈥 he said.

At a bustling mall in Halifax, Katrina Rose set out early in the day to buy her young daughter鈥檚 holiday outfit. She said she waited until the tax break took effect to make some holiday purchases to take advantage of savings.

鈥淢y daughter is a huge book lover, so things like books and board games and those regular toys we鈥檇 like to get for the holidays I saved until now,鈥 she said in an interview Saturday.

Meanwhile, Jennifer Matthew said she forgot the tax break was starting on Saturday and didn鈥檛 factor that into her holiday shopping. She says the tax break on food, alcohol and clothing will help with some savings for her and her two daughters, but won鈥檛 bring about a significant amount of savings in the grand scheme of things.

鈥淚 don鈥檛 think it鈥檚 going to put a big dent in my wallet by any means. I don鈥檛 think we鈥檒l be able to book that holiday, but like anything every penny helps,鈥 she said.

Her 10-year-old daughter Ruby said she鈥檚 excited about the potential savings the break will bring for some hoodies she鈥檚 had her eye on.

The tax break is set to run until Feb. 15, 2025, and it applies to dozens of items including restaurant meals, children鈥檚 clothing, wine and beer, children鈥檚 toys and Christmas trees.

However, product categories eligible for GST relief have plenty of exemptions, with items like food and drinks from vending machines, magazines, clothing for sports activities, and some collectibles and toys not making the cut.

In a press release Saturday, Innovation, Science and Economic Development Canada said Ottawa is doing what it can to help Canadians struggling with their budgets.

Kamal Khera, Minister of Diversity, Inclusion and Persons with Disabilities said in the release that the cuts should help with the added expenses the holiday season often brings.

鈥淲ith new tax cuts on essentials and holiday expenses, we are helping to reduce costs for families when they need relief the most,鈥 she said in a statement.

Kelly Higginson, CEO of Restaurants Canada, said in the release that she was pleased with the decision to temporarily waive the tax, which should give a boost to sales in the restaurant industry.





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