Shoppers flocked to malls on Thursday to take advantage of Boxing Day deals made even more tempting by the federal government’s GST holiday, but some say the lower prices are not enough to keep up with the cost of living of the country to keep pace.

For two months, numerous 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 created an incentive for some consumers to take advantage of holiday sales at their local retailers.

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

“Generally we get good deals every year,” said Singal, who added that he waited for Boxing Day to get new headphones. “It’s good to look around during this time.”

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

“I hope they can stop inflation,” he said. “We’re having problems right now.”

Vice-president of federal government relations at the Retail Council of Canada, Matt Poirier, told The Canadian Press last week that Boxing Day in particular is expected to see a boost because of the temporary pause.

But he said businesses, including those with older payment systems, faced hurdles trying to implement the tax break in the short term and even figuring out which items would qualify.

A report from RBC Economics earlier this month showed that retail spending slowed in November, with holiday spending over the Black Friday weekend slightly below 2023 levels. Spending on hobbies, toys and games fell significantly after November 21, wrote RBC economist Carrie Freestone – the day the tax break was announced.

“Typically, spending on popular children’s gifts increases as the holidays approach,” Freestone wrote.

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

Joey Comia-Orellano, assistant store manager at GameStop in north Toronto, said the store has seen an influx of customers since the tax break was announced. Buyers were eager to take advantage of the tax exemption, he said.

Trending now

• Former OpenAI engineer who raised legal concerns about the technology he helped develop has died

• Donald Trump says he pushed Wayne Gretzky to run for prime minister

“We’ve already secured buyers before Boxing Day,” he said.

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

“I noticed a lot of people were buying more games, a lot of controllers and definitely a lot of consoles,” he said.

Meanwhile, Raj Jeetu, another shopper at Fairview Mall, said Thursday that while he has taken advantage of the restaurant tax break several times, he is skeptical about what it will mean for Canadians in the long term.

“I don’t know if it helps much. I think prices really need to come down,” he said.

For Comia-Orellano, he’s heard from customers that while the tax breaks and Boxing Day deals don’t help address the overall affordability crisis, they’re still worth saving.

“It is necessary, around the holidays it will be difficult,” he said. “It’s almost like a little tax break for people, so it doesn’t necessarily make things a little bit more affordable.”

&Copy 2024 The Canadian Press