Guy Quenneville
Northern News Services
Published Monday, January 7, 2008

WHALE COVE - For the Harper government, it seems the second time is indeed the charm.

The further reduction of the goods and services tax (GST) to five per cent, announced in October and effective now, is far better timed than the last reduction, which took effect in the summer of 2006, according to some Northern businesspeople.

The Conservative government reduced the GST to five per cent from six per cent, but because the change comes at the beginning of the year, forward-thinking businesses stand to benefit when it comes to placing orders on merchandise for the next sealift season.

"Absolutely," said Duncan Walker, who began managing the Issatik Eskimo Co-op in Whale Cove two weeks ago but formerly managed the Co-op in Resolute.

"It's happening before we get our resupply. Usually, resupply orders have to be in by late winter - late February or early March. We have a lot more prior notice this time around."

Being able to use sealift shipping is much more convenient - and cheaper - than the other alternative.

"Flying stuff in - the rates for that are a lot higher than bringing them in by sealift," said Walker.

The extra notice about the GST reduction also gives Walker more time to figure out how to best accommodate the needs of his community for bigger items more likely to shipped by sealift.

"Items heavier in weight that have a longer shelf life: Canned goods, soda pop, big ticket items like snow machines and four-wheelers. Things that are very heavy," he said.

Customers will feel the effect of the GST cut as well, due to the relatively cheap cost of sealifts.

Walker said he and other store managers will be able to reduce prices.

"Just a little bit. Even a few cents in the North is a huge benefit for some people here, because things are pretty pricey here, even though we're under the food mail program," he said.

Gordon Bligh, a business consultant in Cambridge Bay, agreed the timing of the GST reduction was much better this time around, but he doesn't think the tax reduction will make people any more likely to purchase big ticket items.

"The difference in prices will be negligible," he said.