A David vs. Goliath showdown is playing out in Calgary between a small costume business and the federal government.
Ryan Schoel, owner of The Costume Shoppe, told Global News he’s being wrongfully charged import duty fees that could cost him upwards of $100,000 in back taxes and possibly even his business.
“I don’t know what the numbers are but it’s tens of thousands plus the fees,” he said. “I’m drowning.
“Worst case scenario is I just can’t pay the bill and I got to close up.”
Schoel’s plight follows a recent tariff decision made by the Canadian Border Services Agency (CBSA).
Late last year, it told him his imported costumes, which have always been classified as “festive wear,” are now classified as “fancy dress” goods. The distinction he has to pay in an 18 per cent tariff plus taxes.
To make matters worse, he said he will have to pay taxes retroactively.
“I have been importing my costumes for many years under the current code, which is ‘festive wear’ Halloween costumes. Everyone from (major retailers) to simple independents right across the country have been doing so. I have now been singled out.”
Schoel has more than 2,500 costumes in stock at his store, including accessories that now have to be reclassified as well, a process that will take time and more money.
“Frankly, this is a really silly, silly thing to be fighting about whether or not Ghost Face is a costume. We all know it’s a costume,” he said.
“The government has much bigger issues to deal with than trying to mess around with this. It seems like a colossal waste of money for the government and for us.”
The Canadian Federation of Independent Business (CFIB) agreed. It sent the CBSA a letter stating its concerns with the new classification as well as the impact on businesses.
“Small businesses are going through a very difficult time and right now what they need is cost relief,” Andrew Sennyah, a CFIB senior policy analyst, told Global News. “This is just piling cost upon cost upon businesses.”
“A costume is a costume. If I wore a Ghost Face mask and the full costume into a bank today, I think I will have some problems.”
The CFIB represents about 97,000 members across Canada and 10,000 in Alberta.
The Costume Shoppe is a member, and Sennyah said what is happening is wrong, especially since some other big box retailers have been able to get exemptions.
“The crux of the matter is this could shut Ryan down,” he said. “And that’s not fair to him. That’s not fair to consumers who go to his store. It’s just all around not fair.”
Global News reached out to the CBSA with Schoel’s case and received a statement.
“The Canadian Customs Tariff shows the preferential tariffs for products coming from countries with which Canada has a free trade agreement. It is based on the World Customs Organization’s Harmonized Commodity Description and Coding System,” CBSA said.
“The Oxford dictionary definition of fancy dress is: ‘an unusual or amusing costume worn to make someone look like a famous person, fictional character, or an animal, especially as part of a theme at a party.'”
The CBSA went on say importers who disagree with any tariff classification can appeal. The Costume Shoppe is doing that, but worries it will be too little, too late.
“They’ve just changed the rules and I have to pay it before I can fight it,” he said. “By the time they fix the system, I might just have been caught up in it.”
Growing support for the Costume Shoppe
The Costume Shoppe, which has been a staple in Calgary for more than two decades, has a lot of support in its battle.
Conservative MP for Calgary-Heritage, Shuvaloy Majumdar, has met with Schoel and posted a video on social media calling out the government for these changes and the Shoppe’s charges.
But Schoel told Global News he’s also heard from many, many others.
“I’m so touched by Calgarians, by Canadians – from coast to coast — people have reached out,” he said. “Coming in the store, putting their hand on my shoulder saying, ‘Ryan just keep up this fight. This is ridiculous.’”
Schoel said he will keep up the fight until he possibly can’t.
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