Canadian businesses are raising concern that while the proposed “tax holiday” will help consumers at checkout, the work to be done in stores to implement the change in under three weeks is challenging.
“This is a mess,” said Dan Kelly, president of the Canadian Federation of Independent Business.
“Many retailers right now are in their absolute busiest season and they now 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.”
As an example, he said that a hobby shop owner may have to adjust the tax for a model airplane, but there may be questions around whether the glue or paint used for the model is taxable or not.
He added some business owners he’s spoken to have to pay $500 each time for their point of sale device to be reprogrammed before and after the “holiday.”
Under the proposed changes announced last week, the GST and HST would be fully removed from qualifying goods for two months starting on Dec. 14, with items like children’s clothing, snacks, restaurant meals and various groceries seeing the tax taken off.
But the expansive list means added difficulties in determining what is and isn’t exempt, said Anne Kothawala, president and CEO of the Convenience Industry Council of Canada.
“We sell thousands of products, and I think in principle, the government is essentially saying all products that are food and beverage that are sort of for human consumption are included,” she said.
“If there is not clarity on that, and then after the fact they put one product in that wasn’t supposed to be in, now they’re the ones (the businesses) that have to deal with the hassle of that. And now all of a sudden, Revenue Canada is saying, you made a mistake.”
Katherine Cuplinskas, deputy director of communications for Finance Minister Chrystia Freeland, told Global News the department had issued a “detailed list” of what would be exempt from the GST “to ensure businesses can remove the GST from the items on time.”
She added that it was normal for the Canada Revenue Agency to issue additional guidance for businesses and Canadians closer to the implementation of tax policy changes.
Who will not qualify for rebate?
At the same time, some Canadians say one of the recent announcements still won’t help them.
The “Working Canadians Rebate” cheque of $250 will be given out in spring 2025 to more than 18 million who worked in 2023.
Rudy Buttignol, president of the Canadian Association of Retired Persons (CARP), told Global News in an interview that the feeling from seniors and retirees went from shock to “growing anger” following the announcement.
He said many retirees live on a fixed income, relying on payments like old age security (OAS) and the Canadian Pension Plan and the $250 could be added assistance.
“What we’re hearing from our members is a resentment that they’re being left out,” Buttignol said. “The $250 is going to people making $150,000, so this does not sound like sound public policy, and our members across the country are reacting to that.”
Asked last week why retirees or some persons with disabilities who cannot work were not getting the cheques, Prime Minister Justin Trudeau said Ottawa has been taking action to help the “most vulnerable Canadians,” citing the recent 10 per cent OAS increase.
Buttignol noted that didn’t apply to those 65 to 74, which is why CARP has lobbied to have OAS increased for this age group, a move that the Bloc Québécois has also pushed for in Parliament.
Cuplinskas told Global News it “would be categorically false to say seniors, Canadians with disabilities and Canadians on parental leave are excluded.”
She said Canadians have to have made less than $150,000 in net income in 2023, and either have received employment insurance (EI) benefits, paid EI premiums or made CPP contributions to qualify.
“Many, many seniors and Canadians with disabilities work,” she wrote.