Image Credit: Kent Simmonds / CFJC Today

By Dylana Kneeshaw

FEDERAL TAX BREAK

Kamloops retailers brace for GST exemption headaches

Dec 13, 2024 | 4:29 PM

KAMLOOPS — The federal government’s holiday GST and HST exemption kicks in Saturday (Dec. 14) for a two-month period. Certain items will qualify, including prepared food and snacks, restaurant meals, beer and wine, children’s toys, clothing and footwear, and Christmas trees.

For some small business owners, it means a massive overhaul of their pricing systems and there is concern around the way the policy is worded with what items will be considered ‘tax free.’

Staff at Tumbleweed Toys in Kamloops have been going through their 26,000-item inventory to determine what qualifies and doesn’t qualify for a GST exemption.

“When we’re at the till ringing through a sale, we’re just going to go through line by line and make sure that the tax is changed appropriately,” explains owner Vanessa Gammel.

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It’s the busiest time of the year for a toy store and the shop isn’t thrilled with what it feels are vague rules around which items will be tax free and the tight timeline to adjust their pricing system.

“It’s just me going to the tech support at the point-of-sale program at a call centre somewhere who knows where, to ask, ‘How does this work?'”

Other retailers, like Art Knapp Garden Centre and Florist, have fewer items that qualify, but they’re still going to spend Friday night changing prices over in time for Saturday.

“With Christmas trees, it’s pretty straightforward,” says owner Maury Hik. “But yeah, for some of those companies that have lots and lots of different items that could go either way, it would be a nightmare. Because it’s a nightmare for us and we only have a few.”

The garden centre felt most people wouldn’t wait until December 14 to pick up their trees, so the store opted to give a 5 per cent discount on the Christmas trees ahead of the GST exemption kicking in.

“As an individual, I’m thinking, ‘Okay, great. Things will be less, hopefully,” says Hik. “But as a company, I think we’re going to end up paying more in the long run in the sense of IT stuff, management time and all of that to make sure we’re following the rules properly.”

For Hik and Gammel, the big concern is potential penalties from the CRA if independent businesses like theirs make an error when determining if an item qualifies for the tax break.

“Well, we’ve been told by the Canadian Federation of Independent Business to… ‘Do your best with what you’ve been given,'” says Gammel. “Hopefully the CRA has some room for error because they at this point can’t even give us the answers, so how are we supposed to do it perfectly?”

It’s a massive administrative task for local businesses and they’re hoping customers will have patience at the tills while they calculate the cost-savings.