The Conservatives are the first party to produce a full-fledged policy platform for Canada's Federal election. We have several weeks to go, but the Tories have already managed to float a proposal that must even now be a front-runner for the dubious honour of being the most bone-headed idea of the campaign.
The Tories want to have a one-month sales tax "holiday" for the month of December. Party leader Erin O'Toole says this would "give Canada's families a break and...help Canada's small retailers to get back on their feet". Amazingly, Canada's small retailers are less than impressed. Their spokesmen, Dan Kelly of the Canadian Federation of Independent Business (CFIB) calls the idea "gimmicky" and worries that it might simply "shift consumer demand from one month to another without boosting it overall". I don't often find myself in agreement with Dan Kelly, but he's surely right about that.
The more broad-based Retail Council of Canada also sees the problem. Announcing a December tax holiday would very likely prompt consumers to delay purchases they would otherwise consider making in the fall: "The last thing retailers are looking for is to flatten their sales in the fall. In that sense, the lag is a drag on sales."
The Retail Council includes larger retailers than those represented by the CFIB. Some of those retailers, the Amazons and Walmarts of the world, would undoubtedly be bigger beneficiaries of this half-baked idea than the small businesses that O'Toole supposedly wants to help -- but they're still not in favour of it.
And then, of course, there's the cost. The centrepiece of the Tory election platform is the need to restore fiscal balance within a decade. Spending a month's sales tax revenue on a scheme that is highly unlikely to benefit the overall economy is a strange way to start that process.
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