Postal strike, tax freeze are big problems for small business, says owner

As the Canada Post strike nears its third week, and a two-month federal tax break is about to begin, a small business owner in Newfoundland and Labrador says she's struggling while facing those two challenges.

Caitlin Noseworthy, owner of Saltwater Designs, says there's a lot of uncertainty around the GST/HST tax freeze that kicks in on Dec. 14. She says she anticipates it will be an administrative burden to change the prices on her merchandise.

"We don't have much time. We have hundreds, if not thousands, of products. Like different variations, different sizes, and things like that. And updating our inventory system in the middle of our … busiest season is not ideal," Noseworthy told CBC Radio's On the Go.

"We're probably going to have to work overtime to get all of this stuff sorted and make sure it's all ready to go in time."

Noseworthy is also worried about how the change could hurt her business. saying this isn't the time of year for discounts. She says many people will already have some of their Christmas shopping done before Dec. 14 and it could put her business in a difficult position.

"Are we going to have people coming in the store asking for, like, a refund or if they can get store credits because they had purchased, you know, two weeks ago and now they could save the tax?" she said.

Already hurting

Louis-Philippe Gauthier, Atlantic vice-president of the Canadian Federation of Independent Business, says his organization is already hearing from members who are having items returned to them ahead of the tax break.

"The customers are saying outright, 'I'll be back after the 14th,'" said Gauthier.

He said the tax break is coming into effect during a time when businesses say they are already hurting over a lack of demand.

"In other words, people are watching their money, they're not spending as much. So for some businesses, it is still affecting them," he said.

According to a survey among members, only four per cent of business owners say they think the tax freeze will result in strong sales.

Gauthier said there are some guidelines on what's affected by the break, but his organization is asking the federal government for further clarifications.

The organization's survey also showed members are worried about who is going to benefit from the break.

"The data was clear, 71 per cent said that in their minds this is going to be more helpful for big businesses than small retailers. The majority of our members are against it," said Gauthier.

Business owners expect adapting to the change is also going to cost them money, from changing websites, point of sale terminals and then reverting back in February, he added.

"And the number that the members provided was around $1,000 per business," said Gauthier

His organization is asking the federal government to give business owners some type of tax credit to help cover the anticipated administrative and programming costs.

Postal strike deters sales

Noseworthy said the ongoing Canada Post strike has also negatively impacted her business, and that she's been using alternatives like UPS and it's proving to be expensive. For instance, to ship four mugs to Postville through UPS would cost $98, she said.

While some customers are understanding over shipping difficulties, others have been hit hard.

"We have customers who are like, 'Well, this is going to ruin my Christmas,'" said Noseworthy.

She said she has seen a sharp decline in online shopping on the store's website.

Instead, she said, customers are going to the big retailers who can provide free shipping, which is something she can't do.

Gauthier said his organization estimates the strike has cost small businesses close to $1 billion.

"It's really not a pleasant time of the year, unfortunately, for a lot of businesses," he said.

He added his organization is asking the federal government to force Canada Post and the union back to the negotiating table to resolve the strike.

"At this point, back to work legislation would be in order."

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