Small agri-businesses struggle with GST HST holiday

GST HST holiday creates ag retail challenges

Small agri-businesses in Canada are grappling with the temporary GST/HST holiday set to take effect this Saturday. The Canadian Federation of Independent Business (CFIB) has stepped in to assist with free counter signage for retailers, helping them communicate the challenges to consumers. 

“Business owners were given just two weeks to prepare, right in the middle of their busiest season,” said Dan Kelly, CFIB president. “For some small retailers, this has required going through and making judgement calls on thousands of items based on limited guidance from the Canada Revenue Agency. It is going to be a hot mess.” 

“Given the confusing set of rules and lack of time, it will be nearly impossible for most retailers to implement this right,” said Kelly. “This temporary tax change has created brand new tax categories that have never existed before, including differential sales tax rates on toys marketed at adults or children, drinks based on their percentage of alcohol or collectible dolls versus dolls for play. Consumers will bring their own interpretation, expecting part-time clerks and farm gate owners to have become sudden tax experts on rules that even CRA is struggling to sort out.” 

To address consumer frustrations, CFIB encourages shoppers to: 

• Avoid requesting price adjustments or returning items to save on tax. 
• Be patient with clerks who may not have all the answers. 
• Direct complaints to Members of Parliament, not store owners. 

A recent CFIB survey revealed that only 4% of small businesses expect higher sales due to the holiday, while 75% consider the changes costly and time-consuming. CFIB is urging the federal government to offer a $1,000 credit for administrative costs and waive penalties for genuine errors. 

To further support businesses, CFIB has created an online resource answering common questions about the tax holiday. They urge consumers to show patience and understanding as retailers navigate this challenging transition.