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Sunshine spurs big weekend spending before HST-free prices

Tom Woywitka of Bikes on the Drive helps Michelle Kangro as she browses for a new bicycle in Vancouver on April 1, 2013. Starting today the purchase of bicycles only include GST.

Rafal Gerszak/The Globe and Mail

On the weekend, a thousand dollar bike, with HST attached, cost $1,120. On Monday, without the HST, the price dropped to $1,050. Yet for those who crowded into Bikes on the Drive in Vancouver over the Easter holiday, no price could have been attached to the perfect weather.

Customers seemed to care not a whit they would save seven per cent on the purchase of a new bike, just by waiting until HST-free Monday.

The sentiment was: No way, how often is the weather like this in Van, man?

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"We saw a huge increase in bike sales all weekend," said Tom Woywitka, marketing manager of the popular cycle shop on Commercial Drive.

"Once people saw the forecast, they didn't figure it was worth saving a few bucks," said Mr. Woywitka. "We told them about not having to pay HST, if they came back this week, but they wanted to get on their bikes right away and enjoy the weekend."

The 12-per-cent HST came to an end at midnight Sunday, voted out by referendum, after being applied to almost all consumer goods and services in B.C. for 21 months. The province has now reverted to its old, twin tax regime of a five-per-cent federal tax (GST) and a seven-per-cent provincial tax (PST).

While the total levy on most articles remains the same, bicycles are one of the big winners. New bikes are exempt from PST.

Bikes on the Drive did recognize that their weekend customers spurned imminent tax savings by buying pre-April 1, so they voluntarily shaved the price or threw in a $50 helmet with each new bike.

"We gave everyone something," said shop owner Fabio Meisami. "Otherwise, it wouldn't have been fair."

There were grounds for celebration among coffee lovers, as well. They, too, savoured a seven-per-cent drop in the price of their favourite java, along with all consumers of restaurant meals, snacks and non-alcoholic beverages.

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Along the Drive's famous coffee row, however, the demise of the hated HST, which once evoked so much rancour it drove premier Gordon Campbell from office, produced little exultation on Monday, as patrons blinked in the rare, early April sunshine.

Said his pal Tony: "Sure, you save some on a cup of coffee, but at the end of the month, who notices? When a nickel is in your hand, the whole world wants it."

The situation was more complicated down the street at the Caffe Napoli, where, under an arrangement no one could quite explain, prices are "averaged," so there was no noticeable change in the price of espresso. "But it's 25 cents cheaper here than anywhere else on the Drive," said Marco Visconte. "It's also the best."

His coffee mate, another philosopher who gave his name as "Myself," said he also paid the same price as Sunday. "But otherwise, good stuff [the HST is gone]. Thumbs up."

More appreciative, perhaps, were restaurant patrons, who were dinged a lot more by the HST than the coffee folks. Mark von Schellwitz, western vice-president of the Canadian Restaurant and Food Services Association, says the industry grew just 1.4 per cent in B.C., since the 12-per-cent tax came in, compared with an 11-per-cent growth in the rest of Canada.

Overall, Mr. von Schellwitz estimated B.C. eateries lost more than a billion dollars in sales, because of the HST.

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Certainly, those soaking up rays and chowing down on the outdoor patio at Famosa Pizzeria on Commercial Drive were more than pleased to be paying a five-per-cent tax on their pizza, instead of 12 per cent.

"It's wonderful," said Cathy Brighton, as her two daughters nodded in agreement. "The food is good, and we're paying less."

Meanwhile, back at the bike shop, there was a problem. One thing the HST did was simplify matters. One tax, few exemptions. Easy.

Now, it's back to the old days of occasional bafflement, trying to assess what's taxed and what isn't.The tax on new bikes is five per cent, the tax on bicycle repairs is five per cent, but the tax on parts is 12 per cent, unless the parts are bought at the same time as a bike. Then the tax is five per cent.

On Day One, the shop computer broke down. "I guess we'll have to reboot," said Mr. Woywitka.

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