GST drop: much ado about next to nothing

If you’re a cash register technician, now is your time to shine. But Mark Peters hasn’t been “rushed off his feet.

If you’re a cash register technician, now is your time to shine.

But Mark Peters hasn’t been “rushed off his feet.”

The GST is dropping one per cent on Saturday and the Office Supply Centre technician thought more businesses would be calling to deal with the change in advance.

Not the case.

“We haven’t had that many calls yet,” said Peters Tuesday.

“Lots of businesses have moved to computers, but I also know we have sold a lot of cash registers.”

And these registers are hard to reprogram without professional help, he said.

“Often the programming manuals are written in such a way that even I have to call Vancouver or Toronto and say, ‘What does this mean in English?’” said Peters.

But reprogramming cash registers is only part of the problem.

Many businesses aren’t clear on what is happening on July 1st.

“I got a call from a business in Dawson City last week, asking what was happening,” said Yukon MP Larry Bagnell from Vancouver.

Bagnell called Revenue Canada and was informed the federal government was not issuing any official notice on the GST change.

It was in the budget, he was told.

“So, businesses just have to figure out through osmosis from the budget, that they have to reduce their GST,” said Bagnell.

“I found it odd we haven’t been contacted about it, or sent an official piece of paper that states the GST is officially changed,” said Your Dollar Store With More manager Doug Robertson.

“It’s very odd, especially for something that was so ballyhooed, for them not to send out any official notice.”

Robertson phoned Revenue Canada, which directed him to a website and confirmed the GST reduction was, in fact, happening on Canada Day.

People have been very quiet about it, agreed Whitehorse Chamber of Commerce president Rick Karp.

“Being a business owner, I still don’t know what to do myself,” he said.

Karp planned to look at his business’ computer system Tuesday night.

“I’m sure there is a program on the computer where it says, data control — GST rate and you put six in place of the seven,” he said.

“All we have to do is log onto our main computer by remote early Saturday morning, and change the seven to a six — it’ll take 10 seconds,” said Yukon retailer Chris Sorg.

“When the budget came out, we put it on our calendars; we’re organized.”

“Although there has been nothing official, I would expect that people’s accountants have sent them notice,” said Yukon Chamber of Commerce president and CEO Sandy Babcock.

But the change happens Saturday, on the Canada Day long weekend, which puzzles some business owners.

“I don’t know why they want us to change over on Canada’s major holiday,” said Robertson, who plans to reprogram his three cash registers that morning.

“I think we’ll be busy Friday,” added Peters.

“Because we’re not open Saturday.”

So far Peters has only had calls from 30 businesses.

That’s not a very big number, when you remember this is affecting every business in the territory, he said.

The companies that hire other companies to do their cash registers will be all lined-up with people trying to madly change the cash registers, because there has been no notice to businesses, said Bagnell.

They will have to change all their internal programs, software and accounting programs and cash registers, stuff like that, said Babcock.

And there will be a cost to business to make the necessary changes, she added.

“I think there will be a lot of confusion, especially for small businesses, because they have to change all their systems to adjust for it,” said Babcock.

If people make a deal on something, especially something big like a car or a house on Friday, but don’t pay till Monday, when the GST has dropped, then that’s going to cause some confusion, said Karp.

“In the short term it has its challenges,” agreed Babcock.

“But in the long term, a reduction in taxes is always good.”

Bagnell doesn’t agree.

There’s not a major economist in the county that thinks the GST reduction is a good idea, he said.

The GST is a consumption tax.

“So, only the people who have enough money to spend money are going to save money on the GST cut,” said Bagnell.

“It’s very inefficient.”

On July 1st, when the GST drops, Ottawa is also increasing income tax rates.

For lower and middle-income people, income tax rates are rising from 12 to 12.5 per cent.

So, the government could just as easily have given people the income tax break, instead of dropping the GST and it wouldn’t have caused all this grief for businesses, said Bagnell.

“If you didn’t have the money to spend, you’re not going to get it,” he said.

“It would have been a lot better just to give it to people as income tax.”

The intent, with the GST reduction, is to stimulate the economy, said Babcock. And for retail business that is always a good thing.

It’s a good thing for business, agreed Karp.

“But I was wish it was going from seven per cent to five per cent like they originally promised.”

It’s going to drop again within a year, said Peters.

“And then we’re going to have to go through all this again.”

On Monday, Karp is going to keep an eye on his taxed purchases, just in case some businesses have forgotten to change their tills.

“I’m going to look and see what I am being charged for GST, because it’s top of mind,” he said.