Ontario’s rejection of tax harmonization good news for consumers
FOR IMMEDIATE RELEASE
March 26, 2008
TORONTO – With the Mar. 25 budget the Ontario government continued to resist Ottawa’s push for sales tax harmonization, and that’s good news for restaurant operators and their customers.
“In recent statements, Minister Flaherty fails to point out what Minister Duncan and the Ontario government have recognized – that harmonization would significantly shift the tax burden from business to consumers, eliminating the provincial sales tax exemption on numerous items, including restaurant meals under $4.00,” says Elaine Flis, Ontario Vice President with the Canadian Restaurant and Foodservices Association (CRFA), which opposes sales tax harmonization unless flaws in the GST are fixed.
The GST was a recipe for disaster for restaurateurs. It created an unfair playing field by taxing some food products but not others, based solely on where they are purchased. You can buy a carton of milk at a convenience store tax free, but you’ll pay GST when you buy the same item at a cafeteria. You can buy ready-to-heat pizza at a grocery store tax free but you’ll pay GST when you buy pizza from a restaurant.
On restaurant purchases alone, harmonization would cost Ontario consumers $250 million a year in new taxes.
Ontario is home to 34,700 restaurants, bars and caterers. The province’s $22-billion restaurant industry employs nearly 405,000 Ontarians and accounts for 3.7% of provincial GDP.
CRFA is one of the largest business associations in Canada, representing restaurants, bars, caterers and other foodservice providers.
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