GST holiday a bust for B.C. retailers

For many shoppers, the lure of saving five per cent on certain purchases hasn't enticed them to buy more over the past couple weeks.

“It really wasn’t on my radar,” said one shopper in downtown Victoria on Monday.

“Absolutely not,” said another.

From Dec. 14 through Feb. 15, the federal government has offered a so-called "GST holiday" for a select number of items, including beer, cider, wine and some pre-mixed coolers with less than seven per cent alcohol.

“The savings people are getting on their alcohol isn't really drawing them in,” said Andrew Morris at The Strath Ale Wine & Spirits Merchants.

Also exempt are some children’s toys – including stuffies – and all puzzles. At Oscar & Libby’s novelty and gift store, the tax break is small enough that it has made no difference to business, said the store's owner Terri Hustins, who owns four locations for the store across Victoria.

“I really don’t think it generated any extra revenue,” said Hustins.

Various snack foods and restaurant meals are also captured by the exemptions, but many restaurants found it hard to know what was exempt and how to implement the changes to their systems – making the tax holiday more of a headache than a help.

“There’s also a training cost, because in some cases if you were having a martini it would have GST, if you're having a glass of wine it wouldn't,” said Ian Tostenson, the CEO of the BC Restaurant and Foodservices Association.

Adding to the frustration for the retail sector, the temporary hassle is poorly timed, says Jeff Bray, the head of the Downtown Victoria Business Association.

“Funny enough, it’s maybe the worst time to do it, because it's already a busy shopping season,” said Bray on Monday.

“It would be much better to do it February and March when things are slower.”

So, while consumers are saving several bucks for another six weeks and the federal government is losing out on plenty of tax revenue, for most retailers this will be a holiday season to forget.