Restaurant industry: Now is not the time for higher taxes
FOR IMMEDIATE RELEASE
Dec. 16, 2008
“There are two words that sum up the situation for New Brunswick restaurants right now: economic uncertainty,” says Luc Erjavec, CRFA’s Vice President for Atlantic Canada. “Customers are cutting back on spending and restaurants are starting to feel the pinch. To increase the HST now – a move that would increase the cost of restaurant meals compared to grocery stores purchases – just doesn’t make sense.”
Nationally, CRFA is forecasting foodservice industry sales to fall by 1.4% in 2009. Adjusted for menu inflation of 3.2%, real foodservice sales will slip by 4.6% – the largest decline since 1991.
“We’re pleased to see that cuts to personal income tax and corporate tax rates are being considered, but consumers need to know that it’s not a zero-sum game if the proposed HST hike is passed. Individual savings will be eaten up by higher costs every time a consumer buys products or services from local retailers.”
This is especially true at New Brunswick restaurants, where the HST applies to all restaurant meals while the same foods purchased from grocery stores are tax-free. Instead of a tax hike that will shift the tax burden to small businesses and their customers and disproportionately harm foodservice – an important source of jobs for people in communities across the province – CRFA is calling on the government to reduce the overall tax burden for all New Brunswickers.
New Brunswick’s $1-billion foodservice industry represents 4.2% of the provincial economy and employs 24,600 people, or nearly 7% of the provincial workforce.
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