The recent GST holiday, implemented just before the winter season, did not deliver the boost many B.C. businesses were hoping for, with several small enterprises reporting minimal sales growth despite the temporary tax relief.
Daniel Edler, the owner of 49 Below Ice Cream in Victoria, was among the business owners who saw little impact from the holiday. “I didn’t see customers pouring in just to save a little bit of GST,” Edler commented, noting that, while ice cream isn’t a top seller in winter, his sales did not see a noticeable uptick.
According to a report from the Canadian Federation of Independent Business (CFIB) released on February 11, only five percent of small businesses across Canada experienced a sales increase this January compared to the previous year. The same report highlighted that many businesses faced challenges in adjusting to the holiday’s rules, as they had to adjust pricing across various product categories.
Edler’s experience reflects the broader trend in B.C., where data from Moneris Solutions Corp. revealed a two-percent decrease in overall spending year-over-year between December 14, 2024, and January 15, 2025. Spending per transaction also dropped by two percent, and the number of transactions decreased by one percent during this period.
However, not all sectors were affected equally by the GST relief. Businesses in the children’s apparel sector saw an uptick in sales. Winnie Hsu, owner of Little Treasures Kids on Granville Island, reported that the tax break helped drive sales, particularly in children’s clothing, which benefitted from increased foot traffic during the holiday season. She emphasized that the timing of the GST break was helpful, aligning with the busy shopping period.
Hsu pointed out that even small savings were valuable for families, stating, “When you spend a few hundred dollars, any type of savings right now are a benefit to families.” Although she noted that the tax holiday acted more as an added perk than a primary motivator for shoppers, the holiday did influence buying patterns when customers were reminded of the tax savings.
The Moneris data also showed that nationwide, children’s clothing stores saw an eight-percent increase in transactions compared to the previous year. In light of these trends, Hsu suggested that frequent or permanent tax relief could further benefit families, especially since many children’s items are already exempt from PST.
The CFIB’s online survey, conducted between January 9-31, gathered responses from 2,345 small businesses, with a margin of error of 2.02 percent, 19 times out of 20.
While the GST holiday provided some relief for specific sectors, its overall effect on B.C. businesses has been less impactful than anticipated.
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