The federal government’s temporary GST cut is getting mixed reviews from Saskatchewan businesses.
While local business groups agree it’s a good idea, some are wondering if the benefit will outweigh the hassle.
Prime Minister Justin Trudeau’s government plans to issue $250 cheques to Canadians with incomes below $150,000 and cut the GST between Dec. 14 and Feb. 15 on a variety of goods:
- Prepared foods, including vegetable trays, sandwiches, pre-made meals and salads.
- Restaurant meals.
- Snacks, including chips, candy and granola bars.
- Beer, wine, cider, and pre-mixed alcoholic beverages below 7 per cent alcohol by volume.
- Children’s clothing and footwear, car seats and diapers.
- Children’s toys, such as board games, dolls, and video game consoles.
- Books, print newspapers and puzzles for all ages.
- Christmas trees.
Saskatchewan Chamber of Commerce CEO Prabha Ramaswamy said while any sort of tax relief is welcome, temporary measures don’t address the root causes of the affordability crisis.
“We do know that this temporary relief and pause on GST is going to be very onerous for small businesses,” Ramaswamy said, noting that the cheques and the GST cut only deepen the government’s “considerably huge deficit.”
A better move would be to pause or eliminate the carbon tax, she said.
“Tax relief needs to be long-term to actually have an impact.”
Jason Wosminity, general manager of Saskatoon’s Las Palapas restaurant, said the GST cut will give consumers a bit of a break, but there is a downside for businesses.
“There is an incredible amount of work on our end now to change programming, to change accounting, for a very short period of time.”
He hopes it brings more people through the door, but it would have been nice to see this cut extended to make the changes worth the effort, he said.
“It’s a bit frustrating, and I don’t want to look a gift horse in the mouth and be a negative nelly.”
Wosminity said the tax change will require more accounting work, and he wonders if a five per cent cut will be enough to bring people out. The holiday season is very busy, but January is one of the slowest times for restaurants, he added.
Inflationary pressures are behind a downward drop in sales compared to previous years, he said.
Cary Bowman, “president of good times” for Lucky Bastard Distillers in Saskatoon, said it’s odd to have GST cut on things like Christmas trees but not spirits over seven per cent ABV.
“I can’t even understand how a liquor store is going to be able to change the skews, or even understand their inventory management systems … It’ll be a nightmare,” Bowman said.
“I think this government has a weird hatred for spirits in this country.”
The spirits industry keeps on getting taxed, and it has been detrimental to economic growth, he added.
“We don’t have taxation parity with our competitors, and I’m saying ‘competitors’ lightly, being wine, beer and RTDs (premixed drinks) in Canada.”
Bowman said spirits require more economic inputs like grain or fruit compared to wine or beer, so he can’t understand why businesses that employ more people being left out.
— With files from Catherine Lévesque
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