WINNIPEG –
A tax break for the holiday season will start this weekend, giving some Canadians relief on year-end shopping.
The federal government is waiving its five per cent GST for certain products starting Dec. 14 lasting until Feb. 15. The two-month tax holiday was proposed to make life more affordable for Canadians struggling with the high cost of living, according to the Liberals.
But for small businesses, confusion around what applies for GST relief has emerged.
“Something that just came up last minute like this and thrown at us is completely a curveball in our eyes,” said Ryan Gobeil, a sales and service manager at Eliminator RC in Winnipeg.
Gobeil says he has to sift through tens of thousands of products to identify which ones fall under the exemption, which is adding unneeded stress during an already busy time of year.
“No matter how you look at it, there is no easy way of doing it,” he said. “We are going to have to do this manually and bill it all out.”
Lauren Wittman, the co-owner of a collective shop in Winnipeg called Riley Grae, says the experience has been frustrating overall.
“We don’t have time to spare at this time of the year,” she told CTV News Thursday. “It’s mid-December. I have so many other things to do. I didn’t expect to have to dedicate several hours of the day over the last few days to figure this out.”
Under the exemption, many foods in Canada will be GST free. The break also applies to children’s clothing and footwear, children’s toys, books, print newspapers and Christmas trees, but what else falls under that umbrella is vague.
Kari England owns Toad Hall Toys, a toy store in Winnipeg’s Exchange District. She says the GST break, which is supposed to help small businesses, is no simple matter.
“It’s an understatement,” she told CTV News on Monday. “For me, it means my Friday night will be changing 400 tax codes, and I hope I do it right because I don’t have much time to correct anything.”
A recent online survey of small businesses by the Canadian Federation of Independent Business (CFIB) found that only four per cent of respondents expect stronger sales because of the tax break. Dan Kelly, the president and CEO of CFIB, says some business owners he has spoken to are even fearful of what will happen as a result.
“The (Canada Revenue Agency) is not known for being particularly lenient if you make mistakes. Ottawa has found the most confusing possible way to launch this two-month holiday,” he said.
“I’ve had small business owners call me in tears trying to sort this out because they know if they make a mistake, they are going to get an audit by the CRA in March or April with a big bill for taxes they should’ve charged and didn’t, or taxes that they did charge when they weren’t supposed to.”