Key Takeaways:
- On Wednesday, Saskatchewan gyms and events learned that their customers would have to pay a 6% provincial sales tax on admission and memberships.
- According to the Canadian Federation of Independent Business (CFIB), the average Saskatchewan small business has $95,188 in COVID-19 debt.
- Gym owners are concerned about losing customers as summer approaches, and registration is expected to peak.
During the provincial budget announcement, Saskatchewan gyms and events learned that their customers will now pay a 6% provincial sales tax on admission and memberships on Wednesday.
“I was a little taken aback,” said Justin Mondor, owner of Regina’s Brickhouse Gym.
However, the 1% small business tax eliminated in October 2020 will be reinstated starting in July. Before the early reduction in the COVID-19 pandemic, the tax was set at 2%. The government claims the move will save Saskatchewan’s small businesses $51.5 million.
On the other hand, small business owners aren’t entirely focused on the ostensible cost savings.
Also read: The Saskatchewan budget for 2022-23 fills the animal protection void by the Saskatoon SPCA
“Many of our members are also small business owners, so they may need to cut costs if they’re having trouble.” That’s what people have been doing throughout COVID,” Mondor explained.
“When money becomes a problem, they cut off whatever they can.” Unfortunately, one of the first things to go is a gym membership.”
The Canadian Federation of Independent Business (CFIB) estimates that the average Saskatchewan small business has $95,188 in COVID-19 debt.
These tax changes have added to the inflation and supply chain problems businesses were already dealing with as they tried to recover from the pandemic.
“The timing could not be any more inconvenient.” Everyone is just trying to get back to work and earn some money, but all of these additional fees will add up. “And then there’s the price of gas,” Mondor added.
“Customers are slow to return,” said Annie Dormuth, CFIB Saskatchewan Provincial Affairs Director. “Sixty percent of Saskatchewan small businesses report that one of the purposes they have not returned to normal sales is just because customers are slow to return.”
“Adding 6% tax now, when everything is more expensive, could deter customers and consumers from participating in these activities, which need our support now more than ever.”
Gym owners are concerned about losing customers when registration is expected to peak as summer approaches.
“You always hope that there will be an encouragement to get active into fitness, and now we have something that will be an external discouragement of joining or continuing at a gym,” Mondor said.
” Governments should be doing everything they can to encourage consumers to go to the gym, which has been closed for two years here, and return to these in-person events,” said Dormuth.
According to the government, tax is needed to help with the backlog of surgeries in the healthcare system.
“If I asked a Saskatchewan resident… would you be willing to pay this for the two concerts and the Rider ticket for anyone to address the very critical surgical wait-list,” Finance Minister Donna Harpauer stated, “because we all know someone — if not that someone, we know someone in our family whose quality of life isn’t what it should be since they need a knee or hip replacement — I think Saskatchewan people might support that.”
Some propose a tax break for people who work to improve their physical and mental health, which would help the healthcare system.
“If anything, it might be nice to see some tax benefit where we can all claim this back on our year-end income tax filings instead of incurring another fee,” Mondor said.
The new PST regime goes into effect in October.
Source: Global News
