'It's another Hail Mary pass by the Trudeau government': Experts and B.C. businesses react as GST holiday begins

B.C. businesses have been left scrambling to make the federal government's decision to slash GST for the holidays a reality.

On Saturday, Ottawa began a two-month pause on the five per cent goods and services tax in an attempt to ease Canadians' affordability concerns.

The Canadian Federation of Independent Businesses told CTV News on Tuesday morning that the initiative has been “messy,” as owners have been forced to determine which items apply under the guidelines.

According to CFIB, prepared foods such as vegetable trays, chips, granola bars and restaurant meals are exempt from GST. Children's clothing, car seats, diapers and some toys are also exempt.

“When you think about gift stores, hobby stores and toy stores, those are the ones that have the most challenge in trying to discern which ones are out,” said Dan Kely, the president of CFIB.

“We've got weird new categories that businesses have never had to worry about before, like dolls for play being non-tax, dolls for collecting being taxed.”

Tumbleweed Toys in Kamloops is one of the Canadian stores that has chosen to participate in helping customers during the Christmas season, but it comes at a price.

The store's owner, Vanessa Gammel, says staff have been working tirelessly to ensure the rules and regulations of the GST holiday are followed. She explained that the store has an inventory of over 26,000 different items, some of which qualify and some of which don't.

“It would take us probably weeks or months, eight hours a day, to go through all the inventory. So we weren't able to get it done on time,” said Gemmel about reprogramming the store's system.

In the meantime, the store is forced to process each transaction and change items manually during the Christmas rush.

“We've been finding that most of (customers) don't care now. They feel bad that we've been put in this position,” said Gammel. “There's even been a few people that are like, ‘Oh, I don't even care if you take (GST) off or not’”

The GST relief comes as Chrystia Freeland resigned from being the country's finance minister on Monday.

The latest round of frustration between Freeland’s and Prime Minister Justin Trudeau’s offices was reportedly connected to disagreements over measures such as the two-month GST pause, among other fiscal decisions.

In Freeland’s resignation letter, she wrote, in reference to combatting and having necessary reserves for a possible tariff war with the United States, “that means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.”

University of the Fraser Valley political scientist Hamish Telford called the GST holiday savings one of those gimmicks and says it was in Freeland’s Fall economic update.

“It's another Hail Mary pass by the Trudeau government that's failed to connect,” said Telford.

The GST savings will be in effect until Feb. 15, 2025.