Are you ready to save some money?
The federal government's GST tax holiday will kick in Dec. 14, just in time for last-minute Christmas shoppers. And not only will a variety of items perfect for gifts be exempt from the GST, but you won't have to worry about the tax for groceries, restaurant meals, children's clothes, toys and diapers, as well as beer and wine, among other things.
It's only going to last a couple of months. Then on Feb. 15 (right after Valentine's Day), Canadians are going to be back to the same challenges associated with the cost of living. And it's not a total GST holiday; there are still lots of expenses in which the feds will still get you.
The GST break will make life more difficult for retailers over the next couple of months. It's another example of a lack of consultation by the federal Liberals before making a decision. Rather than sitting down with business leaders and industry groups months in advance to try to come up with a plan to execute this tax holiday, they come out and announce this pre-Christmas vote grab and leave the business owners holding the bag. It's not like there's a dearth of business people in the Liberals' hierarchy; the Grits have always had a bevy of big business leaders within their ranks. Someone should have pulled the prime minister aside and explained why this might seem like a good idea on the surface, but it's lacking when it comes to pragmatic reality.
Business owners were given about a month to get ready for these changes. Seems like a lot of time. But for retailers who are entering their busiest and most lucrative time of the year, it's challenging. On top of everything they have to worry about in November and December, they have to contend with the Liberals' plan.
Entrepreneurs have to figure out which items are now exempt from the GST and which ones still have the tax. They have to bring their employees up to speed. They have to adjust their prices. It's a mess.
It's going to be inconsistent as well. One store will be applying the GST to an item while another store will not. And we know what's going to happen: someone who doesn't understand the process and the frustration caused by the feds is going to complain that the GST is in place. People will whine to a 16-year-old at their first job about something that the teen has no control over.
(Please, think classy when you're out shopping. Not just when it comes to GST breaks, but in general).
Yes, there will be some items in which it will be easy to know whether to apply the tax. But others will be far more difficult.
Don't get us wrong, we all look forward to saving a little money here and there during the next two months, but the federal government could have done a better job with this one.
The loss of the GST for two months will also have negative consequences on the federal budget, adding to the deficit that the feds have shown little interest in curtailing since they were elected in 2015. But what else would you expect from the government that gave us such great wisdom as "the budget will balance itself"?
Perhaps the feds are hoping that the GST holiday will result in Canadians spending more because they're saving a little bit of money. Some might purchase that extra item or two, or they might purchase something more extravagant rather than a no-name product.
But it's more likely we're going to take the money we save and stash it away so that we're in a slightly better financial position than we are now. After all, the GST holiday ends in a couple of months, and then it's going to be back to the burden of the higher cost of living.
So, while the federal government's move seems like a good idea to some, and it will no doubt help some people over the next couple of months, it's going to make life more difficult for others.
Vote grabs are a part of politics. But it would be nice if they spent a little more time thinking it through and consulting with those who will actually be involved in the execution of the scheme.
