Peter Moussa works at his booth at the Distillery Christmas Village in Toronto, where he’s selling hand blown Christmas ornaments, on Nov 21.A sales-tax break coming in mid-December could help to stimulate holiday shopping among inflation-weary consumers, but will also create logistical headaches for retailers, industry representatives say.
Mr. Mammas has noticed customers cutting back on some purchases, for example by bringing their own lunches to work or opting to eat at home. He expects that a reduction on restaurant bills will provide the relief that could persuade people to step out more often. The period in January after the holidays also tends to be the quietest for retail sales, and the industry will be watching closely to see whether tax-free shopping will provide an incentive to shoppers.
Mr. Sands added that his members welcomed the news overall, saying the change would be particularly helpful over the holidays on items related to entertaining, such as beer and wine, snack mixes and food platters. He also said the change could lead to a larger conversation about whether certain food items should be permanently tax-exempt, as are other groceries.
“We would rather see a reduction in the small-business corporate tax rate, or employment insurance rates, and certainly a freeze of the carbon tax. Those would have a bigger economic impact on the economy and small business,” Mr. Kelly said.