How Kitchener businesses are navigating the 'tax holiday'

Businesses adjust to 'sales tax holiday' CTV's Jeff Pickel finds out how the first weekend went for businesses included - and excluded - from the HST holiday.

The ‘tax holiday’ officially came into effect over the weekend but many customers, and even business owners, are having trouble figuring out the best way to take advantage of the potential savings.

The federal government’s HST break began on Saturday and can be applied to prepared foods, restaurant meals, some snacks, beer, wine, cider, some pre-mixed beverages, children’s clothing, some children’s toys, Christmas trees and several other items.

But for many, determining what is included and what is exempt has been no easy task.

“I have 65,000 different items and some are going to be tax free and some aren’t,” Cheryl Flood, owner of Hobby and Toy Central in Kitchener, told CTV on Friday.

After putting in many long days sifting through her merchandise, Flood said the first weekend went better than she expected.

“The pressure is off and we really understand the rules a lot better. Maybe not perfectly,” she admitted. “The staff is starting to feel more comfortable. They’re turning around and asking, ‘Is this taxable? Is it not taxable?’ [We’re] making the adjustments day-to-day and the customers were fabulous.”

Sales were sluggish for Flood ahead of the weekend.

“We felt the lack of sales prior to it. People were holding off because they wanted to get the sale price,” she explained. “But honestly, we did amazingly well.”

However, some business owners didn’t have the same rosy outlook.

“Essentially beer and wine, because they’re under 22 per cent, they are exempt from HST. Anything over 22 per cent is not exempt from HST. So any of our cocktails, any of our mixed drinks, our flights, don’t quality for the HST exemption,” Brandon Court, owner of The Civil in downtown Kitchener, said.

Court didn’t want to be left out of the tax holiday spirit, and so instead decided to offer cocktails at a reduced price.

“[Customers] shouldn’t be punished for having excellent taste,” he said. “That’s what we want to do. [We] want to make sure that our clientele who primarily are drinking cocktails… they’re getting the same kind of discount that some of those drinking beer are getting.”

Even though he may not be seeing the same benefit as other business owners, Court is happy if it gets more people out and enjoying time with friends.

“My opinion on it is if it helps Canadians, it’s a good thing. Was it rolled out perfectly? No,” he said. “If it puts more money in Canadians’ pockets, let’s them go to restaurants more frequently, then we’re happy to see that.”

The tax break will continue until Feb. 15, 2025.