Now is not the time for higher taxes
Dec. 16, 2008, Fredericton – A proposal to increase New
Brunswick’s harmonized sales tax (HST) from 13 to 15 per cent could not come at
a worse time, says the Canadian Restaurant and Foodservices Association (CRFA).
“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
Nationally, the CRFA is forecasting foodservice industry
sales to fall by 1.4 per cent in 2009.
Adjusted for menu inflation of 3.2 per cent, real foodservice sales will
slip by 4.6 per cent– 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, which is an important source of jobs for
people in communities across the province, the CRFA is calling on the
government to reduce the overall tax burden for all New Brunswickers.