There are mixed reactions among some small business owners and customers in Ottawa as to how much, or whether, they will benefit from the next two months of federal sales tax cuts on certain products. You can
On Thursday, Prime Minister Justin Trudeau announced a number of affordable measures, including suspending these taxes on processed foods, restaurant meals, certain alcoholic beverages, books, and children’s toys and clothing from Dec. 14 to Feb. 15. announced a series of measures to ease price pressures.
Not everyone is convinced it will make much of a difference, given the stresses of the past few years, including COVID-19 and associated inflation.
“This is not very retailer-friendly,” said Micah Weaver, owner of Singing Pebble Books on Main Street.
One-third of the annual business occurs in November and December, she said. While she’s grateful for the savings her customers will save, she wonders why they have to wait more than three weeks.
“This is the busiest time of the year, so if we had an announcement to wait until then. [Dec. 14] I’m going shopping, what should I do until then? How do I pay my staff? How do I manage inventory levels?” she said.
She decided to start offering discounts to customers this week to encourage them to continue shopping before the tax cut.
This definitely helps take some pressure off on price.– Henry Assad, Owner, Happy Goat Coffee Company
Weaver is not alone in questioning the timing.
“Being a student, trying to pay for everything like rent and utilities on your own is a little tough, especially with student loans. I’m not going to lie,” said Alana Routh, a student at American University . Ottawa.
“But I feel like…the period could be extended.”
Changes will cost the government billions of dollars
The government says that if an Ontario family spends $2,000 on eligible items over a two-month period, they will save an estimated $260 over two months.
In Quebec, where GST is not harmonized with provincial sales tax, the same $2,000 worth of eligible items purchased in a basket would result in an estimated savings of approximately $100.
This tax break will cost the federal Treasury an estimated $1.6 billion in lost revenue.
Treasury officials told CBC News it would cost about $4.68 billion to send $250 checks to about 18.7 million working people earning less than $150,000 in 2023.
Martin Contal, who CBC spoke to while sitting in an Elgin Street coffee shop, doesn’t think the tax cut will change how often he eats out.
“I think there’s going to be a sense that maybe things are going to be a little bit cheaper,” he said.
Henry Assad, owner of Happy Goat Coffee Company, feels the move will benefit his business and customers.
“The coffee industry is going through turbulent times and, as you know, coffee prices are going up. This will definitely help alleviate some of the pressure on prices,” he said. .
“I just hope they extend it.”
