Connor McDowell
Local Journalism Initiative Reporter
Brandon Sun
The federal government’s proposed two-month GST holiday is already giving some small business owners sleepless nights.
Brandon toy store owner Amber Hagans is one of them. She told the Sun she will have stay back after closing the store next Friday and spend the night revising GST status for her entire inventory if the proposal wins the Senate vote next week.
Hagans will also have to ensure her computers are set to collect GST only on select items, starting Dec. 14, when the federal government’s tax holiday is expected to begin.
The passage of Bill C-78 or the Tax Break for All Canadians Act will allow the Government of Canada to declare an array of goods tax-free during a two-month period beginning on Dec. 14.
Speedy compliance with the change in GST protocols for a limited time only, and during what is typically the busiest time of year for businesses, is a tough ask, Hagans noted.
“Basically I don’t think I’ll be sleeping on Dec. 13,” Hagans told the Sun at her store on Friday, as dozens of customers filed in and out. “I have to go through (an inventory of) 10,000 toys.”
Hagans, who owns Toymasters on 18th Street, said the tax holiday proposed by the prime minister last month has been confusing. She has had to go through all items in her store and evaluate if they comply with the three-week-old guidelines about whether to charge customers GST or not.
“I’ve already spoken to a few toy store owners across the country,” she said. “Because we just don’t know where to start.”
A major worry is that she could be held accountable for accidentally charging GST for the wrong products. Hagans explained it’s been confusing to navigate the fine print in the product list published by the Government of Canada, which directs scrapping GST from toy sets that “involve building, creating or assembling structures,” but keep them in for adult Lego sets.
The business owner said she finds the directive especially stressful as it tasks her with ensuring she makes the right judgement calls about which of her products qualify for the GST rebate. And that too in less than three weeks before the toy store’s busiest season — Christmas.
Canadian Federation of Independent Business (CFIB) provincial affairs director Brianna Solberg told the Sun during a phone interview on Friday that the tax holiday has caused chaos. The federation has received feedback from “the majority” of the roughly 97,000 businesses they represent across Canada.
“We’ve basically just trying to do our best to field questions as they come,” said Solberg. “Recognizing that this is extremely confusing and stressful.”
“They have to go through their inventory and try to discern if that product will be exempt. For businesses that have thousands and thousands of products in their inventory, that’s a nightmare. Especially at this time of the year.”
“Business owners are not to be treated as tax experts in this situation.”
She also terms the timeline of Nov. 21 to Dec. 14 as too short for businesses to get up to speed with the new regulation. Solberg added CFIB is urging the federal government to forgive any “good faith errors made by small firms rushing to implement this change.”
The federation has also found that only four per cent of small firms surveyed (among a sample of 3,500 firms) believed the GST holiday would help boost sales.
Announced on Nov. 21, the tax holiday has been introduced to help Canadians cope with financial stress, the prime minister’s office said in a news release issued at the time.
“The past few years have been challenging. It feels like the price of everything has gone up. And while inflation is cooling and interest rates are dropping, we know that Canadians aren’t feeling that in their household budgets yet.”
Prime Minister Justin Trudeau was also quoted in the release. “Our government can’t set prices, but we can give Canadians, and especially working Canadians, more money back in their pocket. With a tax break for all Canadians and the Working Canadians Rebate, we’re making sure you can buy the things you need and save for the things you want.”
While the GST holiday may result in savings for Canadians, the toy store owner said it might not be worth it.
Hagans further stated that her customer service staff are expecting confusion and upset shoppers. Her staff will also have to be instructed on how to explain to customers what items may qualify for a rebate.
“They are going to encounter people who are upset because they don’t understand why they are GST exempt on this Lego set, but not on another one,” she said. “I mean, its Dec. 14. That’s our busiest time of the year.”
Ashlyn Sydor, a full-time cashier at Toymasters, told the Sun it’s a little scary coming up on this Christmas season.
“(We) get a lot of customers,” she said. “Sometimes it can already be overwhelming.”
