TORONTO – The one-point cut to the goods and services
tax announced in the May 2 federal budget is welcome news for Canadian
consumers and the small business owners that operate the majority of
bar and restaurant businesses in Canada, according to the 31,000-member
Canadian Restaurant and Foodservices Association (CRFA).
TORONTO – The one-point cut to the goods and services tax announced in the May 2 federal budget is welcome news for Canadian consumers and the small business owners that operate the majority of bar and restaurant businesses in Canada, according to the 31,000-member Canadian Restaurant and Foodservices Association (CRFA).
“A cut to the GST is tax relief that’s hard-wired into the economy," said Michael Ferrabee, executive vice-president of government affairs with the CRFA. “The July 1 reduction in the GST to six per cent will provide visible and much-needed tax relief for Canadian consumers on virtually every purchase they make, putting money directly into their pockets.”
A GST cut will also help thousands of small business owners whose customers pay largely by credit card. These businesses pay credit card companies a transaction fee of anywhere from 1.6 per cent to 3.5 per cent of the purchase charged to the credit card, including GST, imposing a significant financial penalty on business owners to collect the federal government’s tax. The seven per cent GST costs the foodservice industry alone an estimated $18 million a year in extra credit card fees.
“A reduction in the GST is an important step toward easing an unfair financial burden on business owners who collect the tax,” said Ferrabee.
The CRFA has asked the federal government to fulfill its commitment to further cut the GST to five per cent as quickly as possible.
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