Canada’s GST holiday creates challenges for small businesses

The GST break was no holiday for many Canadians, particularly small business owners and employees. The exemption which only applies to certain items created hassle and confusion for underprepared stores and customers. Second hand stores and pawn shops had a particularly complicated feat to accomplish.

Some restaurants hoped the GST break would increase foot traffic and sales. So they were disappointed when that didn’t happen. Adding more insult to injury, the lower dining bills brought in lower gratuities.

There was also confusion over what items were tax exempt.

And there’s mixed feelings regarding the political motivation behind this initiative.

But it wasn’t all gloom-and-doom for the hospitality industry, they were still busy over the holidays, and the benefits of the tax holiday could soon be realized.  In an email to Bridge City News, the Executive Director of the Alberta Hospitality Association wrote, “The test will be to see if there is a change in consumer spending in January and February, which are typically much slower times.”

The GST holiday began on December 14, 2024 and runs until February 15, 2025.