The temporary GST break is causing some confusion on alcoholic beverages that qualify for the break and others that do not.--NEWS FILE PHOTO
bmiller@medicinehatnews.com
As customers at Medicine Hat restaurants enjoy a five per cent GST break from bills on meals and beverages with an alcohol content of less than 20 per cent until February, owners shared mixed feelings around the federally imposed tax holiday.
Ross Beach, owner of Rossco’s Pub, says the temporary break has caused a little confusion for patrons at the bar due to restrictions on what drinks qualify for the break. Mixed drinks including spirits and liqueurs, for example a vodka and soda, do not qualify for the GST break, while beers and most wines do.
“The majority of all your GST that is added is on all your alcohol above 20 per cent (alcohol content), while your schnapps and that kind of stuff is only 10 per cent,” says Beach. “High balls are all 40 per cent so they get GST added, but if somebody orders a schnapps or just a simple liqueur they don’t get charged GST on it, so it’s confusing for the customer.”
The temporary GST holiday came into effect last Saturday, and restaurants and bars that made large food and beverage orders had to pay GST for products they will not be able to collect from.
“The week leading up to Saturday, everybody’s already had their inventory and GST paid on it, and as of Saturday all previous inventory has been charged GST on it,” explains Beach, who predicts restaurants and bars will be placing large orders on products before the temporary break ends on Feb. 15, 2025.
Smaller restaurants that utilize point-of-sale systems to handle transactions face costly changes to their system to change the pricing of all items, including Eat’s on 8th, which has simply decided to leave prices normal and make the changes to the financial books afterward.
“It’s too much effort for me to go through, I have to change my POS system, which is about $300 one way, and then in February I’d have to pay another $300 to get them back,” explains owner Jay Schall, who shared disappointment with the temporary break.
“(It’s) just made us their accountants is all (the government has) done, and that just costs us more money,” says Schall. “It’s not the smartest thing that could have ever happened, if (they) wanted to do something like that, (they) should have just scrapped the GST on everything.”
Whiskey District owner Andy Micheal told the News he views the GST holiday as a five per cent discount they can offer their customer base, and hopes it will encourage more locals to support restaurants and bars within the community.
“We feel that there are hard times out there for a lot of people,” says Micheal. “If that five per cent makes the difference for somebody to go out or stay in, we’re hoping that might get a few more people in our seats.
“The way that I see it, it’s basically a five-per-cent-off coupon for all customers, and that’s what we’re trying to facilitate.”
However, Micheal admits changing the menu was “fairly labour intensive” and required the restaurant to change the price of every item in its system. He says they use a point-of-sale system called ‘Touch Bistro.’
“Unfortunately, we weren’t about to go select all (menu items) in a certain category and do it as a group, so we did have to go through every single menu item, and it did take several hours.”
But Micheal says the extra work is worth it if it helps make customers’ bills a little more affordable.
“It’s a little bit of work for us to do but at the end of the day, we just want to see our customers get that five per cent discount, and I think it’s worth it.”
Shoppers will also receive a temporary GST break on children’s clothing, footwear, diapers, toys and car seats, as well as video games, books, puzzles and Christmas decorative trees until Feb. 15. More details can be found online at canada.ca/gst-hst-break.
