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GST cut too late

David Ryan
Northern News Services

Yellowknife (May 08/06) - Stephen Harper's cutting the goods and services tax (GST) to six per cent in the federal budget won't affect many Northern businesses until next year.

The one per cent reduction takes affect July 1, which is too late for most businesses looking to get supplies on this year's sealift and barges, said Gordon Bligh, a Cambridge Bay business consultant.

"The impact may not be felt in the North until next year," he said.

While the lower rate isn't going to hurt companies, it won't necessarily help them either, added Bligh.

"It's not going to make or break you," he said.

The change certainly didn't raise any flags at the Fort McPherson Tent and Canvas Company or with manager Erwin Kamenz.

"Most of my sales take place in March, April and May."

Larger items sold to resorts as well as hunters and trappers go out in the spring, so Kamenz can't see his operation or its customers benefiting much this year from lower sales tax.

"It will help a little more next year," he said.

The one per cent cut is insignificant when you compare it to the cost of living and running a business in the North, said Brad Amirault, general manager of the Pitsiulak Co-op in Chesterfield Inlet.

"It's pretty small potatoes," said Amirault.

Shoppers will not be any more inclined to purchase a big ticket item in the $1,000-range because of the cut, he said.

"If they had knocked a couple of more percentage points off, it may have made a difference," said Amirault.

Overall, Kamenz thinks the federal budget will have the same affect on Nunavut and NWT businesses as in years past.

"It's going into one hand, but it is taking in another," he said.