Canada's temporary GST/HST holiday, running from December 14, 2024, to February 15, 2025, sounds like a great way to help Canadians save money during the holidays.  Any strategy that helps with the affordability challenge that Canadian workers and consumers are faced with every day, is a good strategy.   But behind the headlines, there’s a bigger story no one’s covering — and that is the unintended impact across the supply chain.

Most media coverage has focused on how onerous and costly this will be for retailers – which is real. But it isn’t widely known that this temporary initiative will have a ripple effect further up the supply chain — where all suppliers, manufacturers, wholesalers and importers of these products will also have to manually update and in some cases even re-program their systems to handle the temporary removal of GST/HST for 2 months.

Since the goal of this temporary policy is to give consumers a break at the cash register, many suppliers are not even aware of the costly changes they are required to make in a matter of days.  This temporary change will impact suppliers of all sizes.  But many of these smaller medium size suppliers don’t have the tools or resources to quickly rework their invoices during the GST holiday.  These additional costs – due to the temporary nature of this change – may ultimately lead to higher costs for consumers post the holiday relief period.  This is counter-intuitive to what we are trying to achieve.

How can we deliver on the intent of this policy, which is to save Canadians money?

Two solutions to consider:

• Since it is a temporary policy, allow all upstream manufacturers and suppliers of these products to continue invoicing as per usual, and then reconcile with government when the two-month period has ended
• Or, even better, let’s make this change a permanent change offering Canadians a long-term sustainable solution to the affordability challenges they face on the products that rely on every day.  Sustainable solutions that save Canadian workers and consumers money are solutions that grocery manufacturers and retailers will support every day!

This op-ed was originally published on LinkedIn.