Members of the Canadian Restaurant and Foodservices Association (CRFA) met with Finance Minister Colin Hansen on Wednesday to discuss the impact of the pending harmonized sales tax, which some in the industry fear will cost them business.
The tax, which merges local PST with the federal GST, will have consumers paying more for goods that were previously exempt from the provincial sales tax -- including restaurant meals, real estate, haircuts and movie tickets.
"It's going to hurt us," CRFA vice president Mark von Schellwitz said. "When the price of something goes up, the demand goes down."
A survey conducted by the CRFA was presented at Wednesday's meeting, which suggested a grim view of HST within the industry. The results showed:
- 91 per cent of restaurant operators think HST will hurt their business
- 71 per cent said they will have to cut back on staff or staff hours
- 36 per cent said they won't open up new restaurants
- 21 per cent said they will have to reduce their hours of operation
- Six per cent said they may be forced to close
B.C. Premier Gordon Campbell defends his decision to combine the taxes, saying the 12 per cent tax will be the lowest in Canada, and will save businesses millions of dollars per year - particularly in the construction, forestry and mining sectors.
But Shellwitz says the restaurant industry is as important to B.C. as any other, and Campbell's government needs to help keep it afloat.
"We're a bigger employer than the mining industry, the forestry industry, the fishing industry," Schellwitz said. "So we'd like to see a commitment in the budget."
The CRFA boasts 173,000 restaurant employees in the province, including 80,000 under the age of 25.
Financial assistance from the government would help in the short term, Schellwitz said, but more needs to be done.
"There is no silver bullet solution in terms of something the government can do," he said. "Except to reverse the original HST policy."
The HST is set to take effect in summer 2010.
With files from The Canadian Press
