200,000 sign petition against HST ‘broken promises’

Anger about the BC Budget has exploded from the Canadian Restaurant and Foodservices Association. CFRA Western Canada Vice President, Mark von Schellwitz has taken aim at the BC government about broken promises to the industry. Nearly 200,000 signatures have been gathered on a petition opposing the new restaurant meals tax that will result from the implementation of the HST but the government has ignored the concerns of these business owners, their employees and their customers.

“The province broke a promise they made in writing to our industry during the last election that, they would not introduce the HST or change taxation on food without consultation”, said Mr. von Schellwitz. “Then, last September’s budget included a promise to work with the restaurant industry to mitigate the negative impact of the HST. Today they have broken another one by offering nothing in the budget to lessen the impact on the industry.”

The CFRA says that the BC government has always taxed food fairly, but the new HST adds another 7% to restaurant meals, while most of the food sold in grocery stores, which are increasingly competing with restaurants, remains tax free.

“We know from the GST experience in 1991 that the sticker shock of a new 7% tax on restaurant meals will chase more customers to tax-free alternatives in grocery stores and change some consumer habits forever”, he said.

Some statistics mentioned by the CFRA are worth taking a look at:

• The restaurant and foodservice industry is the 4th largest employer in British Columbia, providing 163,000 direct jobs across the province.

• A drop in sales led to the loss of 10,500 jobs in the restaurant industry last year.

• CRFA estimates that the sudden price hike caused by the HST will cut restaurant sales in BC by $750 million per year, which averages out to $50,000 per year for the average restaurant owner.

• In 1991, when the GST was introduced, real foodservice industry sales dropped by 10.6% and average unit volume declined by 22.7%. An Ernst and Young report attributed 75% of the sales decline to the impact of the GST.

• Over the same period, the gross domestic product fell by only 2%.

• Implementation of the GST led to a permanent decline in the restaurant industry’s share of the food dollar.

So far, the BC government has refused to act on any of the industry’s recommendations.