Upcoming GST break creates headaches for small businesses during holiday season

An upcoming federal tax break has led to frustration among some Toronto small businesses who says its created confusion and hours of extra work during their busiest time of the year. 

Christina Kotiadis said the GST holiday has created a logistical nightmare her small business, Lemon & Lavender, a gift store located in Toronto's Bloor West Village. 

A new mother with a four-month-old son, Kotiadis said she's supposed to be on maternity leave but had to come back to work to edit the barcodes for more than 30,000 products in her inventory. 

"Unfortunately, this has taken a lot of time away from my son as I've had to basically edit products with him in one hand or pass him off to somebody else in order for me to get this into fruition in time," she said. 

"Because we do have a deadline and I have to meet that deadline. This isn't an optional policy, this is a mandate."

If approved in the Senate, the GST exemption will start on Dec. 14 and will run through Feb. 15, 2025. 

Under the exemption, essentially all foods in Canada will be tax-free. 

It also applies to:

The federal government has said the tax holiday is meant help alleviate some of the economic pressures Canadians have been experiencing in the post-COVID era. 

Kotiadis said the wording of the exemptions is confusing and has made it difficult to determine whether or not some products should be tax-free or not. 

For example, Kotiadis said some toys are meant to be for children, while others are collectors items for adults. 

"I fear that there will be a lot of confusion both in the store at the desk between the consumer and us," she said. 

"And I think that that's going to open us up to a lot of scrutiny that we didn't even put on ourselves."

The impending tax holiday is creating similar headaches for Megan Munro, owner of Caribou Gifts.