The GST holiday is over. The debate on its effectiveness remains

Vancouver resident Tara Garofano says she made a dinner reservation on Valentine's Day — not for romance, but to take advantage of the final hours of the federal government's temporary Goods and Services Tax (GST) holiday.

"It was really nice to save an extra bit of money," she told CBC News.

The two-month GST/Harmonized Sales Tax (HST) exemption, which began on Dec. 14, was promoted as a way to ease cost-of-living pressures by eliminating the tax on some essential goods and holiday items, including groceries, restaurant meals, books, games, children's toys, and clothing. 

"It would be nice if this is something they could permanently do, especially with everything going on with the States and tariffs," Garofano added.

But with the exemption now over, reactions remain mixed.  Some experts say it wasn't worth the extra work it put on businesses, although some numbers suggest that spending increased slightly over the last few months. 

Restaurants Canada had previously pushed for a permanent GST exemption on restaurant meals, arguing it would provide long-term relief for the struggling industry.

Mark von Schellwitz, the organization's vice president for Western Canada, said the holiday gave some businesses a modest boost.

Data from OpenTable, a restaurant reservations platform, suggests dining out in B.C. increased by 12 per cent during a two-week period last December compared to the same time in 2023.

However, Vancouver resident Aaron O'Connor said the tax break had little impact on his spending.

"I think it just didn't make much of a difference … because it's only five per cent and only on certain products that people don't really pay attention to," he said.

Lindsay Meredith, professor emeritus at Simon Fraser University's Beedie School of Business, called the tax holiday a political move rather than a sound economic strategy.

"It was a vote grabber," he said. "Small businesses got a little boost … they didn't have to pay some tax, so they could charge the same price, and suddenly they were doing a little better. But medium and large businesses, not so much."

Meredith also noted that the cost of implementing the tax break may have outweighed its benefits.

"[Businesses] had to rejig and retool their whole digital system and tax structure and cash registers…so when you subtract all those out-of-pocket costs, this wasn't such a big rosy gift as it might have seemed at the outset."