Windsor businesses brace for 'tax holiday' implementation

Businesses in Windsor are entering a period of uncertainty as the holiday tax break goes into effect on Dec. 14.

The federal government announced a two-month pause of the federal goods and services tax (GST) for a slew of items to provide relief for consumers.

In Ontario, where the provincial and federal sales taxes are lumped together into a harmonized sales tax (HST), the HST will be temporarily removed.

At the Whiskeyjack Boutique in Windsor, co-owner Allison Mistakidis said the tax break comes at an already busy time of year.

Mistakidis learned about so-called tax “holiday” from social media rather than a government source.

“First reaction was, what does this mean for our store? Because some products fall in that category, some do not,” Mistakidis said.

“So, it was an initial scary moment because we didn't know how we would figure that out.”

Whiskeyjack Boutique Co-Owner Allison Mistakidis estimates more than 30 per cent of her inventory will be exempt from sales tax due to the federal government's temporary tax break. She is seen in Windsor, Ont. on Dec. 9, 2024. (Robert Lothian/CTV News Windsor)

The break will continue until Feb. 15.

The list of exempt items includes children’s toys, children’s clothes, books and candies. At Whiskeyjack, Mistakidis estimates about 30 to 40 per cent of their inventory will have the tax removed.

“There's still some communication lacking because a lot of the categories, I could take a product, and I have to decide for myself, like does this qualify as a snack or a food item?”

The change requires businesses to alter their systems to remove the tax from purchases.

Due to her experience, she said changing her operating systems will not be costly but noted it could be a “struggle” for business owners who have older systems.

Mistakidis is “hopeful” that the added work will result in more foot traffic through her store.

“We do get quite a few last-minute people, so they'll benefit, but whether it would spur someone who hadn't shopped here before, I'm not 100 per cent sure,” she said.

At Nico Taverna, Head Chef and Owner Nick Politi said he was thrilled to learn restaurants were included in the tax break.

Nick Politi, the Owner of Nico Taverna in Windsor, Ont., said the tax break is a "welcome experiment" for the restaurant industry. It is seen in Dec. 9, 2024. (Robert Lothian/CTV News Windsor)

“I would love it if there was never any HST or GST on restaurant food. That would make our lives a lot easier,” Politi told CTV News.

Politi said the idea is a “welcome experiment” to try and spur more business and boost consumer confidence.

As for the changes needed to prepare for the tax holiday, he said they will be minimal.

“I think there'll be a little bit more work on bookkeepers and my accountants, if there's any more work, it's more for them,” he said.

Politi hopes the initiative will push customers to look at dining out as a 13 per cent discount for two months.

“I think it'll inspire people to go out and give them an incentive to say, ‘Hey, why not?’ It's like it's a sale, right?”

At the Windsor-Essex Regional Chamber of Commerce, Interim President and CEO Tony Haddad feels there’s a sense of cautious optimism amongst business owners.

“I think they're hopeful that the tax holiday or the exemptions are going to provide some appeal to consumers to maybe spend a little more than they would have otherwise,” Haddad said.

Haddad said there are questions about the changes needed for businesses to conduct the transactions.

The Liberal Government and its tax break have been scrutinized for a lack of planning to propose the plans with time for businesses to prepare.

Haddad agreed the move felt rushed, but said only time will tell if it was successful. He does expect the added changes will put additional strain on business owners.

“That'll certainly add to the stress level, but I'm sure that the expectation is that they will increase sales and generate a greater amount of activity and greater revenues that can hopefully pacify some of the stresses,” Haddad said.

As for Mistakidis, despite being confident all of Whiskeyjack’s items are categorized correctly, she’s hopeful the government will support businesses who make honest mistakes.

“So, I feel like as long as I've done my best job to figure that out, that hopefully they'll be easy on us,” Mistakidis said.