'Ridiculous': Calgary retailers prepare for GST holiday this week

Federal GST holiday set to start this weekend The federal GST holiday will start soon, but it's no vacation for retailers sorting out which items are exempt and which are not.

A temporary federal tax break set to start this weekend is causing confusion for Calgary retailers – and it's also coming at a cost.

The parliamentary budget officer says the GST holiday could cost upwards of $2.7 billion if provinces with a harmonized sales tax ask for compensation.

It's also coming at a cost to retailers who are attempting to implement the tax break by either updating their systems or bringing in extra staff to categorize items.

Set to start this Saturday, the GST holiday will see the tax of at least five per cent removed from dozens of items, including food, beer, wine and cider, and kids diapers, clothes, shoes and toys.

Children's board games, toys and models are part of the GST holiday, for instance, but only if "intended for children under 14 years old," the government's guidelines state.

Some retailers say it's confusing to know what falls under the tax-free umbrella and what doesn't.

"It's impossible for us to go through all our inventory item by item," said Gordon Johansen, the owner of The Sentry Box in Calgary. He says his store sells board games, card games, books, miniature figurines and more.

There are more than 50,000 items for sale in his shop, Johansen explained.

"Let's just say I have a separate opinion about the efficacy of this whole system. And just dumping it on the retailers with no compensation for the extra time it costs is ridiculous," he said.

The Calgary Chamber of Commerce compared the sorting of GST-free items to going through a naughty and nice list.

"It's a good news, bad news story because, on the one hand, it should attract more customers and guests to an establishment to purchase goods and services. But on the other hand, it also creates a bit of a headache for the businesses because they have to account for the different items that are being bought," said Deborah Yedlin, the president and CEO of the Chamber.

It's also being implemented right in the middle of a time that is already busy for many retailers, Yedlin adds.

"It's like eating a chocolate bar. It tastes good for five minutes, and then afterwards you're thinking, 'Okay, why did I do that?'" she added.

An effort from the federal NDP to make the GST holiday permanent failed in a vote on Monday. The tax break is set to run until February 15.

With files from the Canadian Press