Winnipeg small business owners say they’re scrambling, stressed ahead of GST holiday

Posted on December 13, 2024 by Peggy

With the federal government’s temporary GST break set to start this weekend, some Winnipeg businesses are hoping to see more customers — but others say they’re stressed and scrambling to get ready.

“This would be a big deal to implement, even with months of notice, and it’s just not realistic,” said David Newsom, co-owner of Hildegard’s Bakery in Winnipeg. “We don’t have time for any of this.”

The federal government announced in November that the goods and services tax will be cut from specific items like prepared food, beverages and children’s toys, from Dec. 14 to Feb. 15.

Newsom said earlier this week the tax break comes during the bakery’s busiest season, and now he’s forced to make changes his point-of-sale software isn’t designed to handle. It will affect over 100 baked treats, he said.

A man reaches into a bread oven with a large spatula. — Newsom says he’ll have to work overtime to remove the GST from more than 100 of his products. (Prabhjot Singh Lotey/CBC)

Since the bakery includes taxes in its pricing, Newsom said he will have to work overtime to change signage, make stickers and print off new menus to update prices.

He sees no benefit to the tax holiday, because his bakery has already reached capacity and the holiday season is bringing plenty of customers in.

“[The cost] will come out of small business owners’ sleep,” Newsom said.

The tax break has been a logistical nightmare for Winnipeg board game shop GameKnight Games and Cool Stuff, said general manager Ben Shantz.

He has to sift through half a million individual items in his shop to determine which are covered by the GST break. It would take almost two weeks of full-time work to sort through the inventory, he said.

A smiling man stands behind a counter with shelves full of games behind him. — GameKnight Games general manager Ben Shantz says the federal government’s GST break has been a logistical headache for his business. (Prabhjot Singh Lotey/CBC)

With the tax change approaching, Shantz said earlier this week he still didn’t know how to make it work with his point-of-sale system, mainly because of the federal government’s vague item descriptions for products included.

The children’s toys category includes board games, but doesn’t mention anything about the accessories the game shop sells or what qualifies as a children’s board game compared to an adult one.

“The categories they list are so broad that literally the entire store could fall under one or more of the exempted products,” Shantz said. “But you also could argue that they are not, which causes a big dilemma.”

WATCH | GST holiday: How much are you actually saving?

GST holiday: How much are you actually saving? | About That

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The federal government will implement a two-month GST break on a list of goods, from restaurant meals to diapers. Andrew Chang explains how much you’re likely to save, depending on where you live, and why there could be some unintended consequences.

One of his few options is not charging GST for any products in the store, but he’s worried that might cause issues in the event of a Canada Revenue Agency audit.

Since much of the store’s stock is bought through wholesalers, Shantz said he’s already paid the GST. He’s worried the tax break will prevent the shop from recouping the money spent restocking shelves.

“[They] didn’t think things through,” he said.

Brewer hoping for more foot traffic

Colin Koop’s first thought when hearing about the GST pause was hoping beer would be on the list.

Beverages, including beer, are included — good news for Koop, the co-owner of Winnipeg’s Devil May Care Brewing.

“People will be needing to stock up their liquor cabinets over the holidays and entertaining, and I think any savings there will be good,” he said.

The brewery’s sale system allows Koop to adjust the taxes quickly in time for Saturday’s rollout.

He hopes the GST holiday will bring more customers through his doors, because foot traffic has fallen and sales have slumped in the winter months.

Loren Remillard, president and CEO of the Winnipeg Chamber of Commerce, said while businesses are always in favour of anything that helps the consumer, the tax break wasn’t something they were pushing for.

A photo of a man. — Winnipeg Chamber of Commerce CEO Loren Remillard says for many businesses, preparing for the change isn’t as simple as ‘pushing a button.’ (CBC)

For many businesses, preparing for the change isn’t as simple as “pushing a button,” he said. They’ll face expenses like staffing costs to adjust point-of-sale systems, and overtime for going through inventory, said Remillard.

“The shorter time frame means crunch time for businesses,” he said Tuesday.

Many businesses aren’t expecting any increased consumer spending as a result of the change, said Remillard.

He said he’d rather see thoughtful, long-term tax policy for businesses, like business tax reform, instead of short-term tax breaks that play into politics.