Restaurant industry calls for action in upcoming Ontario budget
FOR IMMEDIATE RELEASE
Feb. 6, 2009
TORONTO – With restaurant revenues expected to fall by $575-million this year, and steep job losses in Ontario, the Canadian Restaurant and Foodservices Association (CRFA) is calling for action in the upcoming provincial budget to help restaurant owners weather the storm.
The outlook for Ontario’s restaurant industry is the worst since 1991:
- Foodservice sales are expected to fall across the country in 2009, but Ontario will lead the decline with an expected 6.3 per cent drop in real sales, according to the latest CRFA forecast.
- A mandated wage hike of 8.6 per cent in 2009 due to the minimum wage increase that will take effect March 31 will cost the restaurant industry another $252-million a year.
- The average Ontario restaurant operator survives on a pre-tax profit margin of just 2.9 per cent of sales, the lowest in Canada according to Statscan.
“We are not asking for bail-outs or subsidies, but we are asking the Ontario government to take action in the upcoming budget to mitigate the impact of these unprecedented challenges,” says Stephanie Jones, CRFA Vice President Ontario. “The restaurant industry relies on disposable income, so clearly we’ll be operating in a much more challenging environment given the employment numbers released today by Statistics Canada.”
Among the recommendations in CRFA’s pre-budget submission to the province:
- Freeze minimum wage for students and tipped employees at 2008 levels.
- No harmonization of the GST and PST unless the flaws in the GST are fixed. A harmonized sales tax would erase a provincial sales tax exemption on restaurant meals under $4.00.
- Increase the PST exemption on restaurant meals to $8.00. Two provinces – British Columbia and Saskatchewan – exempt restaurant meals entirely from the PST, providing a more level playing field with tax-free food from grocery stores.
- Give Ontario’s bars and restaurants true wholesale pricing on beer, wine and spirits.
- Reduce the provincial liquor tax from 10 per cent to 9 per cent.
“The restaurant industry is a huge contributor to employment, tax revenues, investment and tourism in Ontario,” says Jones. “But our ability to sustain that contribution is going to be seriously compromised unless we see some relief in the provincial budget.”
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