At Pollock’s Hardware Co-op, Kaitlyn Peters and her staff have a new task on their long holiday to-do list: prepping for the upcoming two-month GST tax break from the federal government.
The North End small business is one of thousands of stores across Canada that is set to remove the five per cent GST from holiday essentials, groceries, print newspapers, children’s items and other goods beginning Dec. 14 and ending Feb. 15.
Peters said staff haven’t started making the change in their point-of-sale system yet, but have begun compiling a list of where pricing will have to be changed in the store, which sells Christmas trees and many other goods covered by the break.
“Yeah, it adds a bit of a workload in terms of making sure that’s all adjusted in our system,” she said.
“I do think it’s great for the consumer, but it is a little bit tough around the holiday season for us.”
Prime Minister Justin Trudeau announced the proposal last week as part of a multi-billion-dollar affordability package to help combat the cost of living. The legislation has yet to pass in the House of Commons.
December is a “frenzy” at Pollock’s, but Peters isn’t sure the two-month break will result in more sales. She notes that by the time it begins, many of her customers have completed much of their holiday shopping — most of their trees are sold shortly after their annual launch on Nov. 30 — and they’re less likely to sell many of the items included in the list in January and February, when shopping slows down.
“I don’t anticipate seeing much of a change with this GST tax break,” she said.
Anything that adds an administrative burden to a business comes with a cost, and those implications may not have been considered by the federal government before pushing through the change, said Winnipeg Chamber of Commerce president Loren Remillard.
“There is a compliance cost. (Business owners) will do it because it means it provides a benefit to to the consumer, but it’s not as simple as flicking a switch and everything reverts,” he said.
“And often, government does make these types of policy decisions without proper consultation to the business community and without a fulsome understanding of the implications beyond just the superficial.”
He described the two-month shift as “pre-election policy that speaks more to the election than it does the economy.”
“Our preference is always to have sound tax policy to support growth overall rather than ad hoc one-off tax measures. Ultimately, pre-election policy rarely is good post-election policy,” he said.
In the restaurant sector, the GST holiday might not get more diners in seats, but it may help those already in an eatery spend more on the experience, something that has been declining since the pandemic, said Shaun Jeffrey with the Manitoba Restaurant and Foodservices Association.
“Customers are just not buying that dessert, they’re not buying that appetizer, they’re not having a second drink, because their recreational dollar just is not there,” he said.
“We’re hoping that (the GST break) will create an influx in an increase in guest spending, because if they’re saving five per cent, maybe (they’ll) buy a dessert.”
Liberal MP Terry Duguid said feedback from businesses on the break has been positive.
“Businesses are very encouraged. This is going to get people shopping, get them in our stores, going to make cost pressures on families just that little bit less,” the Winnipeg South MP said. “So it should encourage the local economy, particularly during the holiday season, when folks are buying gifts, they’re buying turkeys, they’re supporting their families.”
— with files from Nicole Buffie
malak.abas@freepress.mb.ca
Malak Abas
Reporter
Malak Abas is a city reporter at the Free Press. Born and raised in Winnipeg’s North End, she led the campus paper at the University of Manitoba before joining the Free Press in 2020. Read more about Malak.
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