Canadian Pizza Magazine

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HST takes a bite out of B.C. restaurant profits


August 4, 2010
By Canadian Pizza



August 4, 2010, Vancouver – The B.C. restaurant industry’s worst fears about the HST
have been realized.

In a province-wide survey by the Canadian Restaurant
and Foodservices Association (CRFA), 72 per cent of respondents said the HST on
restaurant meals has had a negative impact on business since it took effect
July 1.



On average, respondents
reported a 10 per cent decline in sales compared to the same period last year.

“There’s no question the
HST is hurting B.C. restaurants of all types, from fine dining to take-out,”
says Garth Whyte, CRFA president and CEO.  “On behalf of our members, we
will continue to press Premier Campbell for action.  With numbers like
these, we urgently need government to work with us to mitigate the negative
impact of tax harmonization.”

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The CRFA survey found that:

·       only three per cent of respondents
report the HST is having a positive impact on their business;

·       72 per cent say the HST is having a
negative impact;

·       53 per cent say their customers are
spending less;

·       56 per cent have fewer customers;

·       47 per cent have been forced to cut
back on staff/staff hours to adjust to the HST; and

·       26 per cent have had to offer more
deals and promotions to mitigate the HST fallout.

Since HST was first
announced more than one year ago, CRFA has warned government that the new tax
would result in significantly lower sales for British Columbia’s fourth-largest
private-sector employer.

“The HST has dramatically
tipped the playing field against restaurant operators.  Their customers
are spending less or diverting their spending to tax-free alternatives in
grocery stores,” says Mark von Schellwitz, CRFA’s vice president, Western
Canada.  “It’s time for government to step up and take action to help our
members deal with a very tough transition to this new tax.”

Despite receiving more than
200,000 signed petitions from restaurant industry owners, staff, and customers
opposing a new meal tax, government has thus far not addressed their concerns.

The CRFA survey was
conducted online between July 26 and 31, 2010.  The findings represent 802
B.C. restaurants.