By Lee Griffi, Local Journalism Initiative Reporter
The federal government’s proposal to implement a tax holiday for Canadians hasn’t been approved yet, but for two local businesses, it has resulted in some head-scratching.
Under the proposed changes announced last week, the GST and HST would be fully removed from some goods for two months starting on Dec. 14. It includes items such as children’s clothing, snacks, restaurant meals, wine, beer and various groceries seeing the tax removed.
One area business owner was more than happy to talk to the Gazette but at the same time was worried about outwardly criticizing the federal government. They feel the amount of work for a small business owner to implement the plan on such short notice will create an immense administrative burden.
“The affected items will need to be identified, and each one will need to be programmed with the tax exemption status. Our system is not designed to handle this, so we will have to stay up late after the business closes the night before the implementation and complete the changes. We will then have to repeat the same thing two months later. Will the government compensate small businesses for the overtime needed?”
The feds did not reach out to small business associations like the Canadian Federation of Independent Business (CFIB), something this owner said would have been beneficial.
“Consultation would have allowed all parties to provide input, thus balancing the effectiveness of the program and the effort needed from all parties. It would have allowed for the implementation of a program that truly helps the people who need it.”
CFIB president Dan Kelly called the tax holiday “a mess” in a post on the organization’s website.
“Many retailers right now are in their absolute busiest season and they may have to reprogram their point-of-sale machines not once but twice to remove the tax from some items and then to add the tax back.”
Kelly added some business owners he’s spoken to have to pay $500 each time a point-of-sale device needs to be reprogrammed.
The local retailer added while sales may increase and people will save a bit of money due to the tax vacation, the drawbacks outweigh the benefits.
“General business logic would suggest that it should help business revenue, but we need to weigh it against the resources needed, future impact to our country's debt burden and the real value toward the people the program is targeting.”
The Liberal government will be borrowing roughly $6 million to provide millions of Canadians with a $250 cheque in April, should the measure pass. The business owner added the pandemic’s safety measures made sense and they were happy to oblige, but this time around, it doesn’t make sense.
“As any small business owner operating through COVID, we were willing to handle the extra burden for activities that truly benefited our community. This program that runs for a short time will compete with our limited resources without truly benefitting the targeted group,” the local business owner said.
They added a government that is willing to take action to help people is always a good idea, but consideration must always be given to the idea's effectiveness, efficiency and value in tapping the means of small operators.
“Personally, I am indifferent to the idea, but aware that it will create extra non-value-added work for small businesses.”
Angie Scheid is the owner of Cloverleaf Farms Food Outlet in New Hamburg and said there are many unknowns.
“When I read the news the other day, I said what does it mean for me? I guess what we need to do is get into our register system and get a list from the government of what exactly is exempt because it’s very confusing.”
She added some of the items on the list are already tax-exempt, adding to the uncertainty.
“It’s a bit scary because I want to make sure we are exempting the proper things. We need to figure out what those things are and get them taken out. We’re lucky we have barcodes on our taxable items, so I don’t have to worry about relying on staff to try and remember what has tax and what doesn’t.”
Scheid is hopeful the plan will help the store’s sales but added a two-month exemption may not make much of a difference. She said it could help consumers struggling with the cost of food.
“I don’t know, to be honest, it’s so short-lived. People with young families will be able to stock up on things they need but I don’t think it will make them buy more items like candy for example. I don’t think it will have much of an impact on increasing our sales.”
She believed the products affected at her store would be sandwiches and salads, drinks, and snacks like candy and chocolate.
According to a Canadian Press story released Tuesday, NDP Leader Jagmeet Singh said while he supports the Liberal plan to give Canadians a tax break during the holidays, he won’t back the $250 rebate proposal unless the government expands eligibility to the most vulnerable including seniors who aren’t working.
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