P.E.I. businesses hope HST break brings more than confusion at the cash register

Some businesses on P.E.I. say the federal government's pause on requiring the HST to be charged has had little effect on sales, but the true test will come in the six weeks ahead as the shopping season slows down.

Barry Balderston, co-owner of Owls Hollow Toys & Games in Charlottetown, said the tax pause made a "hectic" holiday season even more hectic. That wasn't just because people were shopping more; many were also unclear exactly what was supposed to be taxed and what wasn't.

"It was just a hectic time of year for it to happen. That was our biggest problem — but it did help us some. Business is up some, and people were pretty glad to get the break."  

Last month, the House of Commons passed legislation from the minority Liberal government to remove the federal sales tax (as well as the provincial portion from provinces including P.E.I. that have a harmonized sales tax or HST) from Dec. 14 to Feb. 15 on items such as children' s toys, books, restaurant meals and takeout food.

Sandra Doherty said she hasn't changed her shopping habits much because of the tax break, but it has enticed her to frequent more restaurants.

"I find I'm eating out a little more, and plan to eat out some more," she said.

In January and February, it's a nice time to eat out, when there's not much else happening. So it's making a difference.— Sandra Doherty

"I'm thinking it's a little more economical, and in January and February, it's a nice time to eat out, when there's not much else happening. So it's making a difference."

Some restaurant owners CBC News spoke with said they have not noticed a boost in business since the HST break came into effect.

"It's always a little bit busier at Christmastime, and that's definitely been happening," said Ryan Abdallah, owner of Cedar's Eatery in Charlottetown. "But in order to try to compare it to another time, it's still early and hard to tell."

He's hoping the tax holiday will lead to a boost in January and February, but he questions how much a difference a short pause like this can really make.

"I'd like to think it'd be nice for the government to do things that do bring more people out, and maybe even more sustainable or long-term, instead of just a two-month break."

How much of a holiday is the HST break? On P.E.I., it depends who you ask

2 months ago

Duration 2:32

Islanders have been getting a 15 per cent break on some items for a couple of weeks now, part of the federal government's two-month sales tax pause. CBC's Steve Bruce visited with some local stores, restaurants and customers to see how much of an impact the tax holiday is having on P.E.I.

Nicole MacNeill, a cashier at Owls Hollow, is just trying to make sense of what gets taxed and what doesn't. Yarn and crayons are taxed, for example, but an art kit is not. They've been doing separate transactions depending on the tax status of items.

"It's challenging because not all our things are tax-free in this store …. Sometimes there's always that grey area, but we make our best judgment."