May 1, 2015, St. John’s – Newfoundland and Labrador’s budget raises the HST to 15 per cent – the highest sales tax in the country – which unfairly penalizes the province’s job-rich restaurant industry, Restaurants Canada said in a news release.
Raising the HST will mean lower restaurant sales, fewer visitors to the province, a greater incentive for Newfoundlanders to travel outside the province, fewer job opportunities for Newfoundlanders and an unfair tax system, which gives grocery stores a greater competitive edge over restaurants.
“Increasing the HST is the exact opposite of what the province’s restaurant industry needs to get back on its feet,” says Luc Erjavec, Restaurants Canada’s vice-president Atlantic, in the release. “Restaurant sales growth is already amongst the slowest in the country, and slapping on a government-imposed price increase on restaurant meals will only make it worse. The restaurant industry employs more than 15,000 Newfoundlanders, and this will all have an impact on those job opportunities.”
Restaurants Canada urges the government to exercise fiscal prudence and make tough choices to control spending. In terms of revenue generation, Restaurants Canada suggests that government consider selling off the Newfoundland Liquor Corporation (NLC).
“Experience has shown that selling NLC’s retails assets would safeguard provincial revenues, stimulate economic development, and improve service to important job-creators like the restaurant industry, while maintaining firm regulatory control over alcohol products,” says Erjavec.
Newfoundland’s $1-billion restaurant industry is one of the largest private-sector employers in the province. The province’s restaurant industry created 1,000 jobs in 2014 alone.
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