GST/HST holiday: CFIB calls on customers for patience with small businesses struggling with an administrative nightmare before Christmas

CFIB issues new counter signage to help consumers understand 

Toronto, December 9, 2024 – With many small businesses still scrambling to comply with the temporary GST/HST holiday coming into effect this Saturday, the Canadian Federation of Independent Business (CFIB) has created free counter signage which small businesses can print and display at their point of sale to explain the challenge 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,” Kelly said. “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 store owners to have become sudden tax experts on rules that even CRA is struggling to sort out.”

“It took 10 days for government to clarify the tax treatment of supplies for model airplanes, and even that is dependent on who the model plane is designed for,” Kelly added. “Despite the best efforts of the CRA, business owners will be left to make educated guesses on thousands and thousands of items.”

CFIB’s special counter sign is designed to ask consumers to be patient and understanding with small businesses that are doing their best to implement the change. CFIB is calling on consumers to:

1.  Avoid asking for a price-adjustment to remove the sales tax from goods purchased before the holiday or returning/repurchasing items to avoid the tax. Returning and repurchasing items on a credit card may require the retailer to pay 1-2% payment processing fees up to three times.
2.  Avoid arguing with a clerk over whether an item is taxable or not, especially if an item is marketed to adults but purchased for a child.
3.  Avoid expecting a clerk to be a tax expert, override the point-of-sale system or call the manager/owner before finalizing a purchase.
4.  Take up any complaints or questions with Members of Parliament, rather than small business owners. 

CFIB’s recent survey found that only 4% of small businesses expect to see stronger sales as a result of the temporary GST/HST holiday. Three quarters of those affected by the changes said it will be costly and complicated to implement the holiday, while two-thirds (65%) said there’s not enough time to do it. 

CFIB continues calling on the government to give affected businesses a minimum $1,000 credit in their GST/HST accounts to cover administrative costs and to order the Canada Revenue Agency to forgive taxes owed, penalties and interests for any good faith errors made.

As the federal government is struggling to provide more than basic information on the tax holiday, CFIB has created a special website for small businesses with a detailed Q&A on dozens of commonly asked implementation questions.

For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
Public.affairs@cfib.ca

Methodology 
Preliminary results for the Flash Survey: Impact of Canada Post strike and GST/HST exemption. The online survey is active since November 26, 2024, number of respondents = 3,591. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of at most +/- 1.6%, 19 times out of 20.

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.