Questions swirl around temporary tax cut, timing
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There is a range of opinions among small business owners and customers in Ottawa regarding the upcoming two-month federal sales tax break on certain products. Prime Minister Justin Trudeau recently announced a series of measures aimed at easing affordability pressures, including temporarily pausing taxes on prepared food, restaurant meals, certain alcoholic beverages, books, and children’s toys and clothing from December 14 to February 15.
While some believe that this tax break will provide much-needed relief, others are skeptical about its impact, especially in light of the challenges faced in recent years due to COVID-19 and inflation. Mika Weaver, the owner of Singing Pebble Books, expressed concern about the timing of the tax break, as it coincides with the busiest time of the year for her business. She has decided to offer customers a discount in an effort to encourage them to shop before the tax drop.
One student, Alana Rous from the University of Ottawa, shared her struggles with affordability and suggested that the time period for the tax break could be extended to provide more assistance to individuals like herself. The government estimates that an Ontario family spending $2,000 on eligible goods during the two-month period could save around $260, while a similar basket of purchases in Quebec would result in savings of about $100.
The tax holiday is expected to cost the federal government approximately $1.6 billion in lost revenue. In addition to the tax break, the government plans to send $250 cheques to around 18.7 million people who worked in 2023 and earned $150,000 or less, at an estimated cost of $4.68 billion.
Despite the financial implications, some individuals like Martin Contal believe that the tax break may not significantly impact their spending habits but could create a perception of reduced prices. On the other hand, Henry Assad, the owner of Happy Goat Coffee Company, is optimistic about the benefits of the tax break for his business and customers, particularly in light of rising coffee prices.
Overall, the reactions to the upcoming tax break in Ottawa are mixed, with some anticipating relief and others questioning the duration and extent of its impact. As businesses and consumers prepare for the implementation of these measures, there is a sense of uncertainty about how it will ultimately affect the local economy.