Restaurant industry welcomes federal budget tax relief, access to credit
Jan. 28, 2009, Ottawa – Tax relief for consumers and businesses, along with
better access to credit for restaurant owners, was welcome news for Canada’s
foodservice industry in yesterday’s federal budget.
The foodservice industry,
which employs more than one million Canadians and generates just under four per
cent of the country’s gross domestic product, is expecting a 4.6 per cent real
decline in sales in 2009 due to the slowing economy, according to a forecast by
the 33,000-member Canadian Restaurant and Foodservices Association (CRFA).
“Putting more disposable
income in the hands of consumers, reducing the tax burden on small business
owners, and allowing credit-worthy restaurant businesses to access much-needed
lending are positive moves for our industry,” says CRFA’s Vice President Labour
and Taxation, Justin Taylor.
CRFA strongly supports the
following budget measures:
- The increase in the Basic Personal Income Tax
exemption and the Working Income Tax Benefit, which will increase
disposable income for low-income Canadians and help restaurants by
encouraging more people to enter and remain in the workforce.
- The steps the government has taken to increase
access to credit for restaurants by increasing the maximum loan guarantee
under the Canada Small Business Financing Program and by increasing
lending through the Business Development Bank of Canada.
- Increasing the small business tax rate threshold
from $400,000 to $500,000. This
allows more small businesses to take advantage of a lower income tax rate.
- The steps the government has taken to ensure
unemployed Canadians have access to the EI benefits they need without
increasing costs for employers. CRFA is concerned, however, that increased
costs to the program caused by rising unemployment will lead to higher EI
premium rates in 2011 once the premium rate freeze is over.
- The federal government’s continued support for
apprenticeship programs through increased tax credits for businesses that
hire apprentices through the Red Seal program.
Restaurant owners are disappointed
the government did not act to rein in rising credit card fees.
“While the government has
taken steps to protect consumers from predatory practices of credit card
companies, they must remember that businesses are consumers of these financial
products as well, and must take steps to ensure that fees charged to businesses
are fair, transparent, and predictable,” says Taylor.
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