Boxing Day shoppers take advantage of tax holiday amid cost of living crisis

TORONTO — Shoppers flocked to malls on Thursday to take advantage of Boxing Day deals made more enticing by the federal government’s GST holiday, but some say the lower prices aren’t enough to keep up with the country’s cost of living.

For two months, a slew of items including children’s toys, video games and consoles, snacks, wine and restaurant food are GST- or HST-free, depending on the province. The tax break has incentivized some consumers to take advantage of Boxing Day sales at their local retailers.

Nakul Singal said he came to Fairview Mall in Toronto on Thursday morning with his partner to hunt for deals.

“Every year, we generally get good deals,” said Singal, who added he’d been waiting for Boxing Day to get new earphones. “It’s good to shop around during this time.”

He added that while the tax break has helped his family with food prices, he would like the government to do more to help Canadians with the high costs of living, especially housing.

“I hope that they could stop inflation,” he said. “We are struggling right now.”

The vice-president of federal government relations for the Retail Council of Canada, Matt Poirier, told The Canadian Press last week that Boxing Day in particular is expected to get a boost amid the temporary break.

However, he said businesses, including ones with older payment systems, have faced hurdles trying to implement the tax break on short notice and even figuring out which items qualify.

An RBC Economics report from earlier this month showed retail spending slowed in November, with holiday spending slightly below 2023 levels over the Black Friday weekend. Spending on hobbies, toys and games scaled back notably after Nov. 21, wrote RBC economist Carrie Freestone — the day the tax break was announced.

“Typically, spending on popular children’s gifts builds as the holiday season approaches,” wrote Freestone.

But even with November’s decline, Canada is likely on track for a slight uptick in per-person retail spending in the fourth quarter for the first time since mid-2022, she wrote.

Joey Comia-Orellano, an assistant store manager at a GameStop in north Toronto, said the store has seen an influx of customers since the tax break was announced. Shoppers have been eager to benefit from the tax holiday, he said.

“We’ve been getting shoppers before Boxing Day,” he said.

Comia-Orellano added that he expects the store to get busier on Thursday as consumers look to save with Boxing Day deals combined with the tax break.

“I did notice a lot of people buying more games, a lot of controllers, and definitely a lot of consoles, too,” he said.

Meanwhile, Raj Jeetu, another shopper at Fairview Mall on Thursday, said while he has already taken advantage of the tax break at restaurants multiple times, he’s skeptical of what it will do for Canadians in the long-term.

“I don’t know if it’ll help much. I guess the prices really need to come down,” he said.

For Comia-Orellano, one thing he has heard from customers is that while the tax break and Boxing Day deals might not help with the overall affordability crisis, it’s still worthwhile for savings.

“It’s necessary, it gets hard around the holidays,” he said. “This is almost like a small break for people when it comes to taxes, so not necessarily making things a little bit more affordable.”

Some malls were also busy in Vancouver on Boxing Day.

The Vancouver International Airport warned travellers and shoppers to expect heavy traffic and delays.

It said on Thursday that they are seeing “high volumes” of vehicle traffic near the airport as shoppers are flooding the nearby McArthurGlen outlet mall for cheap deals.

This report by The Canadian Press was first published Dec. 26, 2024.

Rianna Lim, The Canadian Press