Good news, bad news budget for Alberta’s restaurant and foodservice businesses

Edmonton – Restaurants Canada and Alberta’s struggling hospitality industry were hoping the recently released provincial budget would include measures to stimulate consumer spending and encourage job creation during an economic downturn.

The Alberta government delivered a deficit budget which includes a number of tax increases, including a five per cent liquor tax increase on top of the 10 per cent liquor tax increase last spring, Restaurants Canada said in a news release. On the plus side, the government introduced a job creation grant program as an incentive for employers to hire employees during a declining labour market.

“Restaurateurs, bar owners and other foodservice operators in Alberta are struggling with rising food, liquor and labour costs combined with a slowdown in consumer spending. Adding another five per cent liquor tax on top of the 10 per cent increase last spring is going to make this balancing act even harder,” said Mark von Schellwitz, the association’s vice-president for Western Canada.

The Alberta government has recognized the labour market downturn with a new job creation incentive program that will provide a grant of up to $5,000 per new hire beginning 2016.

“While the new program is welcome, it does not change business realities. If costs continue to rise while revenues continue to fall, it will be very difficult for employers to take advantage of the new job creation incentive,” von Schellwitz said.

The new Alberta government continues to reject the idea of introducing a sales tax, which comes as welcome news to hospitality operators, the release said.

Alberta’s $10-billion restaurant and foodservice industry is one of the largest private-sector employers in the province. It directly employs close to 150,000 Albertans in every community across the province and created 6,600 jobs in 2014.