A temporary pause on charging the federal sales tax on many items has retailers excited, even though they say preparing for the relief will mean a lot of extra work in a short period of time.
Associations representing thousands of the country’s retailers and restaurants said Thursday that omitting GST charges on toys, groceries, books and more for two months will be a quick process for some, but time consuming for others.
“Every retailer is going to be different because everyone’s system is different, but it can range from being a simple fix to being quite laborious,” said Matt Poirier, vice-president of federal government relations for the Retail Council of Canada.
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Businesses will likely begin by trawling through their lists of products to determine which ones will need to have the tax removed between Dec. 14 and Feb. 15.
The federal government’s list of qualifying goods is lengthy and wide ranging as it includes diapers and kids clothes, but also items such as newspapers, plush dolls, English muffins and bottled water.
Some stores may only sell a few of the qualifying items while others may have an expansive inventory that spans several categories.
Once they’ve identified what qualifies, Poirier said retailers will have to set up their point-of-sale software to cope with the changes.
Lightspeed Commerce Inc., a Montreal-based company which sells point-of-sale software, said it will be up to merchants to make changes to their systems, but the work will be “relatively straightforward” because the company’s software already allows shops to adjust tax rates on individual or grouped items.
Businesses will have to be ready to flip the switch in roughly three weeks — and then prepare to reverse the changes two months later.
“It’s short notice and it’s not a lot of lead time,” Poirier said. “It will be a headache for some, but the upside will be more sales in the long run.”
While the period won’t cover much of the holiday shopping nor Black Friday, it will include the start of the year, when retailers and restaurants typically see business slow.
“There’s less people going to restaurants at that point, so the timing is actually very good,” said Max Roy, Restaurants Canada’s vice-president of federal and Quebec affairs.
The organization estimates the move will result in a five per cent increase in sales, which he felt made the work restaurants will have to do to prepare for the cut worth it.
Several businesses he talked to said the changes would be “very doable,” but Roy acknowledged “the size of the restaurant makes a big difference here.”
“For bigger chains, it means that their tech team will have to look at all items and go one by one and fix this for all restaurants,” he said.
“For smaller members, this means that they will probably have to go and make the change and it should take them a couple of hours to, to make it happen.”
