By MorinvilleNews.com Staff
The Canadian Federation of Independent Business (CFIB) is calling on customers to show patience with small businesses struggling to navigate the administrative challenges of the upcoming GST/HST holiday. The temporary tax break takes effect this Saturday, leaving businesses with just two weeks to prepare during their busiest season.
CFIB has issued free printable counter signage for businesses to help explain the situation to consumers at the point of sale. “Business owners were given just two weeks to prepare, right in the middle of their busiest season,” said CFIB President Dan Kelly. “For some small retailers, this has required making judgement calls on thousands of items based on limited guidance from the Canada Revenue Agency (CRA). It is going to be a hot mess.”
The temporary tax changes introduce new and complex tax categories, including differing rates for toys marketed to children versus adults, alcohol content-based rules for drinks, and classifications for collectible dolls versus those for play. According to Kelly, consumers are likely to bring their own interpretations, often expecting clerks and store owners to be tax experts on rules that remain unclear even to the CRA. Kelly also highlighted the confusion caused by the CRA’s delay in clarifying specific tax scenarios, such as the treatment of model airplane supplies. He said that despite the CRA’s efforts, business owners will be left to make educated guesses on thousands of items.
CFIB is urging consumers to exercise understanding during this transition period. The organization advises against asking businesses for price adjustments or returning and repurchasing items to avoid the tax, as these actions could result in additional payment processing fees for small businesses. CFIB also emphasized the need for customers to avoid debating with clerks over whether an item is taxable, especially in cases where an item’s classification is ambiguous. Clerks should not be expected to override point-of-sale systems or involve management in resolving tax disputes. Instead, CFIB recommends that customers direct their complaints or questions about the tax holiday to their Members of Parliament rather than taking them up with small business owners.
A recent CFIB survey revealed that only 4% of small businesses anticipate stronger sales from the tax holiday. In contrast, three-quarters of respondents reported that the changes would be costly and complicated to implement, with 65% citing insufficient time to prepare. In response, CFIB has called on the federal government to provide affected businesses with a $1,000 credit in their GST/HST accounts to offset administrative costs. The organization is also advocating for the Canada Revenue Agency to forgive penalties, taxes owed, and interest for errors made in good faith.
As the federal government continues to provide only basic guidance on the tax holiday, CFIB has created a special website offering a detailed Q&A to assist businesses in navigating the complex new rules. These measures aim to alleviate some of the confusion and stress small businesses are experiencing during this challenging implementation period.
