"HST impact ranges during first week"

Richard Tchamourian and other Nanaimo businesses weigh in on the effect of the harmonized sales tax during the first week of its implementation.

Chris Hamlyn/The News Bulletin
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By Chris Hamlyn - Nanaimo News Bulletin
Published: July 08, 2010 8:00 AM
Updated: July 08, 2010 10:09 AM

One week into the harmonized sales tax in B.C. and Nanaimo businesses owners are noticing a range of customer reaction and a definite impact on the bottom line.

The HST was implemented July 1, combining the five per cent GST and seven per cent PST.

Gerald Wong, co-owner of Mrs. Riches Restaurant, estimates business was down close to one-third in the first two days of the HST.

“We anticipated a bit of a drop in demand,” he said. “It has bounced back, but it is still down.”

Wong said he hasn’t heard of many complaints from customers about the tax nor have tips decreased, but he has noticed more customers are looking for a deal.

“Our specials have become more popular since the tax came in,” he said.

Carolyn Hancox-Barr, owner of Northridge Health Performance Centre, said her front-line staff are fielding complaints about the HST.

“People are definitely grumbling and are frustrated, but at the same time, they know it’s not us,” she said. “They’re frustrated with the government.”

Northridge memberships were previously PST exempt. With the HST, members are seeing a seven-per cent increase.

Hancox-Barr acknowledges the increase is a big hit for her customers, but said there is nothing she can do.

“What we can do is make sure customers get the most for their dollar,” she said. “We have a staff retreat coming up and the whole focus is going to be on increasing customer satisfaction.”

The B.C. government’s argument in favour of the HST is the tax will save business owners money and result in lower prices for consumers.

That is the case at the Longwood Brew Pub, as publican Barry Ladell passes HST savings on rather than absorbing extra profit.

The 12-per cent HST replaces the GST and a provincial liquor tax totalling 15 per cent, resulting in a three-per cent savings.

“People are pretty much taking the tax in stride, but one thing they’re really enjoying is the price of beer has gone down,” said Ladell. “By giving the customers a break when we can, it helps subsidize the little bit of extra percentage they have to pay on their food bill.”

Ladell said he will have to wait a month or two to really see what impact the HST will have on business – a sentiment echoed by Richard Tchamourian, owner of Rich1 Beauty Salon and School.

“Right now, customers aren’t complaining about the HST, but I look at the receipts and I’m pretty amazed at the amount being collected,” he said. “I think it’s going to take two to four months for people to recognize what’s going on and how it is hitting them in the pocketbook.”

Tchamourian saw recent signs of the recession coming to an end, but anticipates customers will cut back on spending for a period of time because of the HST.

“It’s up to me as a business owner to prepare myself for that and find other means to keep the customer coming back,” he said.

Hancox-Barr said she finds the HST frustrating and sees little benefit.

“The government keeps saying the HST is going to actually increase business and we just can’t figure out how that’s going to happen,” she said. “There are only so many dollars to go around.”

"A BOUQUET OF SWEET PEAS to
Richard and all his fabulous staff at
Rich 1 Beauty for taking such great
care with my two daughters, building
up their self-esteem by showing
them beauty comes from the inside
also."