Businesses in N.B. expect benefits and drawbacks from sales-tax holiday

Shoppers in New Brunswick can look forward to saving 15 per cent on their holiday shopping when it comes to items such as books and puzzles, children's clothing, toys and video games.

But many local business owners are struggling to adapt to the change, which was only announced in late November and goes into effect today.

"We didn't have enough time really to have a very proper in depth research about what's happening," said Celeste Nel, owner of Once Upon a Child in Moncton.

The list posted by Ottawa has a lot of caveats. For example, children's sports equipment like body suits and ski jackets are tax-exempt, but ski boots and wet suits aren't. Toys or games marketed for adults don't count either, even if they're being purchased for a child.

"It's a first for everybody and some companies have much more to do than others depending on what their store looks like," Nel said.

Because Once Upon a Child mainly sells children's items, the majority of its products fall under the tax holiday. But some larger ticket items they stock don't count.

"I think currently only car seats are really covered, which is great because it's an expensive thing for most parents to purchase," she said. "However, I feel having a baby is still quite an expensive thing for people.

"I do feel that some of the baby equipment would have been nice for new parents starting out, to include that for them, like bassinets or strollers."

While the federal government's decision to drop the sales tax for two months isn't costing businesses directly, there will be indirect costs associated with changing point-of-sale systems, the equipment a store uses when customers pay. There will also be additional accounting, businesses say.

"It's going to cost them more money to administer — some of them $1,000 or to $2,000 — to reprogram their point-of-sales terminals," said Frédéric Gionet, a Moncton-based senior policy analyst with the Canadian Federation of Independent Business.

The federation surveyed 3,500 of its members and found only four per cent who responded had positive feelings about the tax holiday.

"Every small business needs to sit down and interpret what the Canadian Revenue Agency wanted them to do," he said.

"So they're quite frustrated and they don't believe that's going to add anything more to their sales."

Businesses have had a few weeks to try to interpret the new regulations, but Gionet worries customers will have even more difficulties when they come into effect.