A pair of business networks in Chatham-Kent are sounding the alarm about the potential negative impacts of the upcoming holiday tax break.
The Chatham-Kent Chamber of Commerce and the Wallaceburg and District Chamber of Commerce both issued a statement this week in response to the federal and provincial government’s plan to temporarily remove both the goods and services tax (GST) and provincial sales tax (PST) on certain items in Ontario.
The tax break will remove the federal and provincial tax from all groceries, restaurant meals, children’s clothes, toys, diapers, beer, and wine from December 14, 2024, to February 15, 2025, in an attempt to reduce the financial burden on Canadians ahead of the holidays.
However, the local chambers are urging the public to be mindful of the challenges that local businesses will face.
“This initiative, while aimed at providing financial relief to consumers, has created significant hurdles for many of our community’s small and medium-sized enterprises,” the CK Chamber said in a news release. “The rushed implementation of this tax holiday has created an administrative nightmare for small businesses.”
According to the chambers, local businesses will be expected to quickly reprogram complex point-of-sale systems and make judgment calls on thousands of items. Many retailers are also facing costs of up to $500 each time point-of-sale devices need reprogramming.
Chamber officials also said there has been a lack of clear guidance from the Canada Revenue Agency, which has left many businesses in a state of confusion.
“The creation of new tax categories, such as differential sales tax rates on toys marketed for adults versus children, or drinks based on alcohol percentage, has added another layer of complexity,” the CK Chamber said. “Many business owners are forced to make educated guesses, risking potential audits and penalties in the future.”
Training staff on new procedures associated with the tax break during the busiest time of the year may also result in longer transactions for customers, chamber officials said.
As a result, both chambers and local businesses are asking the public to be patient with staff and to be empathetic while shopping. As well, the chambers ask that any complaints or questions about the tax holiday be directed to local members of parliament, rather than small business owners or staff.
“Small businesses are the backbone of our communities,” said B.J Griffiths, chair, of the CK Chamber, in a news release. “By showing patience and understanding during this period, we can all contribute to a more positive shopping experience and support the local economy. Let’s come together as a community to ensure this holiday season is enjoyable for everyone – shoppers and business owners alike. Your kindness and support can make a significant difference during this transitional period.”