The federal government's GST/HST holiday began Saturday, and while some in the food industry hope it will boost sales, shoppers are unsure whether it will encourage them to spend more.
The tax breaks eliminate GST on prepared foods, toys, certain types of alcohol and other staples of the holiday season.
In provinces such as Ontario, where provincial and federal sales taxes are combined into a consolidated sales tax, the entire HST will be removed from such items.
Some shoppers in Mississauga on Saturday said they welcomed the savings but didn't think the tax break would make a significant difference to their wallets.
Anna Fonseca said she thinks the affordability problems people are facing need more long-term solutions.
“It doesn't solve the problem, especially when people are going through so much hardship right now. It's basically a quick fix for Christmas,” she said.
She said she's already on a tight budget so the tax break won't encourage her to eat out or shop more.
“I mean, it's only good for two months and then, who knows what's going to happen? Then prices might go up.”
Roman Wojnarski said he wasn't sure if the tax break would lead to more shopping or dining, but supported the initiative.
“I think the economy right now is such that it will give a lot of people some relief.”
See | How the GST/HST holiday works:
This Saturday marks the start of the Liberal government's two-month GST/HST holiday that it says will give Canadians a break on the cost of some essential goods. Still, some say the list of tax-free items is confusing for businesses and consumers.
Businesses must 'do their best' to comply: Minister
Industry group Restaurant Canada estimates the tax break could lead to an additional $1.5 billion in sales for restaurants across the country.
It's a much-needed win for restaurants that typically see a drop in revenue after the holiday season and often operate on low profit margins, said Kelly Higginson, president and CEO of Restaurant Canada.
“It really helps them have that stability and predictability over a two-month period.”
However, some small businesses say the GST break has created more headaches than it's worth during their busiest time of the year, with extra work hours editing barcodes and reprogramming sales systems, as well as creating confusion about which products qualify.
See | Small business owners express frustration over GST/HST break:
There may be some relief for shoppers in the check-out line if the proposed GST tax exemption comes soon. But as CBC's Tyreke Reid tells us, some small business owners say they're trying to make the necessary changes.
Canada's Small Business Minister Richie Valdez said she believes the GST break has created challenges for some businesses, which is why the Canada Revenue Agency has created an online tool and hotline to help.
Valdez said the CRA will take a “pragmatic approach” to enforcement and will not go after businesses that make reasonable efforts to comply with the law.
“As long as small businesses do their best to comply with the law and demonstrate the ability to do so, then the Canada Revenue Agency will not pay attention to them in terms of compliance,” he said at a news conference in Mississauga on Saturday. About the commencement of GST holiday.
“We just expect small businesses to do their best because it doesn't benefit their business.”
But other business owners said preparing for the break was straightforward.
Paul Tavora, owner of Tavora Foods, who organized Saturday's news conference, said he was concerned at first but got a software programmer to help him make some changes to his store's sales system to comply.
“It's just a matter of going to our sub-categories that have tax-bearing items and click some buttons to get tax,” he said.
Tavora said he is hopeful the initiative will lead to more sales and help his customers as well.
“We're very excited about this plan to help protect families and make their money go a little further. I think it's going to help on all fronts.”
The tax break period lasts until February 15, 2025.
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