Just 5% of small businesses saw a sales boost from the GST/HST holiday
As the two-month GST/HST holiday comes to an end, only 5% of small businesses saw stronger sales compared to the same period last year, finds new data by the Canadian Federation of Independent Business (CFIB). Among those, only 4% of businesses in retail and 15% hospitality saw an increase in their sales.
“By all accounts the government’s GST holiday was a flop for small businesses,” said Dan Kelly, CFIB president. “For many retailers it was an administrative nightmare to get point-of-sale machines compliant just before Christmas, let alone sort out which LEGO sets the holiday applied to, or how many items in a gift basket had to be tax-free for it to qualify.”
Most (66%) small firms impacted by the tax break said their sales stayed about the same but also faced a number of challenges including reprogramming point-of-sale systems and the associated costs, additional administrative workload, training staff and managing customer inquiries.
On top of the administrative headache and confusing sets of rules, both the Canada Revenue Agency (CRA) and Finance Canada were providing conflicting information as to whether participation in the GST/HST holiday was mandatory. In fact, just last month, the GST holiday was nominated for CFIB’s Paperweight Award – one of the worst examples of red tape across the country – as part of its 16th annual Red Tape Awareness Week.
“The past few months have been incredibly challenging and filled with uncertainty for many small firms. As they transition their systems back to the original amount of GST, we urge the CRA to be lenient and waive taxes owed, penalties, and interest for good faith errors made during the rushed implementation period. The government should also provide affected businesses with a $1,000 credit in their GST/HST accounts to offset programming and administrative costs they incurred back in December,” Kelly said.
Methodology
Final results for the Your Voice – January 2025 survey. The online survey was conducted Jan.9-31, number of respondents = 2,345. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of at most +/- 2.02%, 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 100,000 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.
SOURCE Canadian Federation of Independent Business
