Confusion and frustration surrounding federal government’s tax vacation plan

Finkle Street Bar and Grill owner Jennifer Pearce-Hall is critical of the federal government’s upcoming tax holiday, calling it a bad aid solution to a much bigger problem. (Contributed Photo)

Lee Griffi, Local Journalism Initiative Reporter

The federal government’s proposal to implement a tax holiday for Canadians has been approved and, in all likelihood, will make it through the Senate in time for mid-December.

Under the changes, the GST, or five per cent, would be fully removed from some goods for two months starting on Dec. 14. It includes items such as children’s clothing, snacks, restaurant meals, wine and beer with an alcohol content of less than seven per cent, and various groceries.

The Echo contacted the Woodstock Chamber of Commerce for comment but general manager Mike Crabbe referred us to the provincial chamber’s statement.

“The Ontario Chamber of Commerce is a strong advocate for policies that support a stronger economy – and good economic policy requires partnership and predictability. While the GST tax relief measure will stimulate demand and bring some financial relief to consumers during the holiday season, it also means added costs, confusion and stress for businesses that must now retool and adjust their systems during the busiest time of the year,” said Daniel Tisch, president and CEO.

“Good public policy usually should not come as a holiday surprise. Affordability measures will be better received – and more impactful – when there is clarity and coordination with the business community and with other orders of government. The Ontario Chamber stands ready to collaborate with all governments to ensure businesses have a predictable policy environment that will spur growth and entrepreneurship,” he added.

Jennifer Peace-Hall, owner of Woodstock’s Finkle Street Tap Grill, said she didn’t believe the news at first.

“One of my staff had mentioned it the day before and I thought to myself, that’s not something the government does, give away kindness like that. At first, I didn’t think it was true, but then I received the communication.”

Peace-Hall explained she has been given more details from the Canadian Federation of Independent Business and other groups she is a member of on exactly what is exempt and what isn’t. She added the idea seems like a good one on the surface.

“I think it’s a great sentiment for a bit of a reprieve from the struggles everyone is facing right now with inflation but I don’t think it fixes the problem. I am hopeful it will be helpful to consumers over that time and encourage them to shop local and come out to restaurants.”

If a couple enjoys a meal at a restaurant and spends $100 the tax break will mean a savings of $5. The Echo asked Peace-Hall if the move by the federal Liberals would help the spending public.

“With everything people are facing right now, I don’t think it’s going to make much of a difference for them. I think it’s a bandage on a big problem, to be honest. I think it’s beneficial for people to spend more money on Christmas but overall, it’s more of a gimmick than a solution.”

She added one of her biggest frustrations is the feeling the government is merely trying to appease the frustrations so many Canadians are feeling. She is also concerned about the aftereffects should $250 cheques go out to millions of Canadians in the spring.

“In my opinion, it’s like stealing. It’s like giving us back a bit of our own money. We saw what happened through COVID with the government printing money and what we are facing now due to that. I don’t think any of these are solutions and I don’t think they are helpful.”

Many small businesses have expressed frustration over the administrative burden the tax holiday will create both when it begins and when it ends. Pearce-Hall said another worry is if mistakes are made on a company’s tax bill.

“We are going to have to update our point-of-sale (POS) system for that short period of time and then update it again after two months so it is going to be a burden. There is also the fear is there is any (tax) reporting done incorrectly, small businesses after the fact will be audited and penalized for that.”

She said her POS program doesn’t allow for pre-programming so she’ll be up all night on Dec. 13 changing the prices of every menu item needing the tax relief. Pearce-Hall added part of the reason she thought the tax break was a joke was because there was no consultation with her sector before the announcement.

“There were no communications put through. I would say the government never corresponds with us asking for our opinion or feedback on anything. Policies are implemented and we just have to choke them down.”

Peace-Hall explained the government needs to get to work and come up with a plan that provides meaningful economic benefits to taxpayers and business owners alike.

“Things aren’t working and people aren’t happy. People deserve better and the government isn’t coming up with solutions that are impactful in making changes in people’s lives.”