A local mom is frustrated and disappointed with the temporary removal of GST/HST on select items.
“If you’re not out drinking and playing games, but you are a parent, a homeowner, somebody who works full time, or a senior, this is a joke. It’s almost insulting,” Trisha Cotton said.
The federal government’s Tax Break for All Canadians Act is a two-month exemption starting Dec. 14 of HST on items such as prepared food, Christmas trees, and some alcohol, and GST on items such as children’s footwear, car seats, and clothing. In Ontario, HST is the combination of the federal five per cent goods and services tax and the eight per cent provincial sales tax.
“It’s 100 per cent a gimmick … Everybody’s had enough. Everybody’s tired of this,” Cotton said.
She said the government is more focused on promoting consumerism rather than providing real relief. While the exemption may help some people, she said it definitely won’t help her.
This tax pause is expected to result in a loss of $1.6 billion in government tax revenue.
“It’s going to be expensive,” said Ken Garth, Indirect Tax Partner with BDO in Bracebridge.
While Garth acknowledged the benefit for families and individuals, he said retailers might face challenges in rolling out the tax break.
He said local small businesses will have to go into their sales system and identify all items that will be tax-free. This could be complicated: for example, a bookstore will apply the tax break only to qualifying items, like novels, but not to colouring books. Similarly, a game shop can only apply exemptions on games made for children under 14.
“It’s going to be a lot of work, I can imagine. I think there’s going to be a lot of misunderstandings in the public about what is actually eligible and what’s not,” he said.
Garth said he encourages people to be understanding if disputes or disagreements arise at the cash register over the application of the tax and wondered if the Canadian Revenue Agency would also be forgiving.
“When the CRA comes around to audit (businesses), how forgiving are they going to be on people with those kinds of things? You know, be understanding and maybe have a bit of leniency where someone’s made an honest mistake. They haven’t had a long time to plan for this. Obviously, mistakes are going to happen,” he said.
Ryan Farnsworth, the owner of Up North Games on Main Street in Huntsville, shares this worry, said his only concern about the exemption is how it will affect small businesses when it’s tax time.
“We just hope that they’re lenient,” he said, adding it wouldn’t be in the CRA’s best interest to audit the small businesses that are just barely getting by.
Despite some concerns, Farnsworth said implementing the exemptions in his sales system should be easy and overall, hopes the tax break will bring more customers through his doors.
“I think that it should hopefully drive some sales … I’m sure it’s just to try to get a little bit of a spur to the economy, and it should work,” he said.
The majority of games in his store say “13+” on the packaging, which means they fall into the no-tax category. But there are a few adult games, for example, Cards Against Humanity and drinking games such as Do or Drink, which wouldn’t be tax free.
More information, including a full list of exempt items, is on the government’s website.
Working Canadians Rebate:
- The Working Canadians Rebate, which proposed last month to give working Canadians $250 in the new year, is estimated to cost the government $4.6 billion and remains under discussion.
- The NDP wants to expand the rebate to include retirees, while the Conservative oppose it.
- The provincial government in Ontario is planning an additional rebate of $200 in spring 2025.
